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Capital City
Beijing
Currency
Renminbi
(
¥
)
Timezone
GMT +8
Payroll Frequency
monthly
Tax Year
1 January - 31 December
Employer Tax
31.31% - 42.72%
Languages
Chinese
Capital City
Beijing
Currency
Renminbi
(
¥
)
Timezone
GMT +8
Payroll Frequency
monthly
Tax Year
1 January - 31 December
Employer Tax
31.31% - 42.72%
Languages
Chinese
Given its status as the second-largest global economy and home to the world's largest population, China offers companies an extensive and advantageous market with abundant opportunities, particularly in manufacturing, IT, and software sectors.
China's workforce experiences consistent growth, fueled by a rising number of college graduates each year. With over 640,000 individuals obtaining master's and doctoral degrees from Chinese educational institutions, international companies have access to a substantial pool of skilled talent.
China has made significant strides in business-friendly policies, as reflected in its 31st position on the World Bank's Ease of Doing Business ranking for the years 2019-2020. This marks a substantial improvement for the country, positioning it among the most improved markets globally for conducting business.
The nation's economic landscape benefits from an expanding network of trade and investment agreements. China is actively engaged in 23 free trade agreements with 26 countries or regions, fostering bilateral and multilateral cooperation and strengthening its position in global commerce.
Businesses can only operate smoothly in China if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in China below, to avoid any compliance issues.
By law, employers must provide employees with a written employment agreement within the first month of starting work. Part-time employees follow different regulations, and while fixed-term contracts are allowed, indefinite terms require completion of a mutually agreed-upon assignment. The contract must include the following information:
We can help you get a new employee started in China quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.
In China, the typical working hours constitute 8 hours per day and 40 hours per week, with a maximum weekly limit of 45 working hours.
Under China's labour laws, employees receive 1.5 times their regular salary for work beyond the 8-hour workday, with Saturday and Sunday work compensated at double the standard rate. However, employees are limited to 3 hours of overtime on weekdays and a maximum of 36 hours per month.
The probationary period for indefinite contracts in China can extend to 6 months, while for fixed-term contracts, it ranges from 1 to 2 months, depending on the length of service.
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1 January - 31 December is the 12-month accounting period that businesses in China use for financial and tax reporting purposes.
The payroll cycle in China is usually monthly, with employees being paid on the last working day.
The minimum wage for employees in China is typically 14.38 CNY - 15.13 CNY per hour, amounting to ~2,300 CNY - 2,420 CNY per month for a typical 40 hour work week.
Although not mandatory, is a common practice in China to provide employees with a 13-month or even a 14-month salary, disbursed during the Lunar New Year or Spring Holiday, as stipulated in the employment contract.
Employer payroll contributions are generally estimated at an additional 31.31% - 42.72% on top of the employee salary in China.
In China , the typical estimation for employee payroll contributions cost is around 15.2% - 22.5%%.
The individual income tax is computed using progressive rates in China, where the tax rates rises as the gross annual income increases.
In private companies, male employees typically retire at the age of 60, while female employees retire at the age of 55. Employers are obligated to enrol their employees in mandatory pension insurance (基本养老保险), with funding provided by both parties. The employer contribution rates vary by location, with Shanghai and Beijing having employers contribute 16% and employees contributing 8%.
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In China, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications, paying fees, and meeting specific eligibility criteria. The key visa types include the Z Visa for long-term employment, the R Visa for highly skilled professionals, the M Visa for short-term business visits, the F Visa for non-commercial visits, and the S Visa for family members of foreign employees. Employers must ensure compliance with local labor regulations when sponsoring foreign employees and navigate challenges such as document preparation and timely renewal of permits.
The annual leave entitlement in China is 5 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.
China observes the following 7 national holidays spread across several days:
Paid leave in China, as specified in the employment contract, varies with years of service. Employees receive 5 days for the first to tenth year, 10 days for 10-20 years of service, and a maximum of 15 days for over 20 years of service.
Pregnant employees in China receive 98 days of maternity leave, starting 15 days before the expected delivery date, paid by the relevant Social Security Bureau. The payment is based on either the average monthly salary or three times the minimum wage, whichever is greater. Maternity leave entitlements vary across the following provinces:
In China, fathers typically receive 15 days of paid paternity leave, although this can vary depending on the location. The paternity leave entitlements differ in the following cities:
In China, employees have the right to paid sick leave, with durations extending up to 180 days. The payment rates and responsible parties vary based on the employee's tenure and location. Common sick leave entitlements are:
Parents in China are provided with Childcare Leave, with the duration varying based on the specific provinces:
In China, if an employee experiences the death of an immediate family member, they are eligible for up to 3 days of leave, contingent on the terms of the employment contract and the region.
If an employee gets married in China, they are entitled to a leave of 3 to 10 days, depending on the terms outlined in the employment contract and the region.
Termination procedures in China vary based on the province and region. Employers are not permitted to carry out at-will terminations beyond the probation period; instead, terminations must be justified. To provide an example, the following are acceptable termination instances in Shanghai:
In China, standard notice periods are generally established at 30 days. In cases where notice is not given, employers may opt for payment in lieu. Similarly, employees are obligated to provide their employers with a 30-day notice before resigning. If the employer decides to terminate the employment during the probation period, they must give the employee at least 3 days' notice.
In China, mandatory severance pay depends upon eligibility and is contingent on the employee's tenure:
Disclaimer
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
ABOUT THE AUTHOR
Jesse Weisz
Jesse is an experienced R&D Analyst at Playroll, a leading Employer of Record (EOR) provider. With a strong background in data analysis and market research, Jesse specializes in identifying emerging trends and driving innovation in global HR solutions. She is an all-rounder, critical thinker and success-seeker (often inextricably linked to being a late-night tea drinker).
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