Employer of Record in China

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

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.

Employment Contract Requirements

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:

• Identification of both parties
• Starting date and duration of employment
• Workplace location and designated working hours
• Job description, position, duties, and responsibilities
• Base salary (including compensation and benefits)
• Total allocated holidays
• Provision of social insurance
• Occupational safety and workplace protection measures
• Adherence to additional legal requisites
• Probation periods, confidentiality, and the provision of training (if applicable)

Onboarding Process

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.

Probation Period in China

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.

In China, the typical working hours constitute 8 hours per day and 40 hours per week for most employees aged 18 and above.

Overtime work is only permitted under specific conditions, such as emergencies or production needs, and is capped at 3 hours per day and 36 hours per month. Managerial and senior professional employees are generally exempt from these limits.

Overtime compensation in China is regulated by law, with premium pay rates designed to fairly remunerate employees for extended work hours. Weekday overtime must be paid at 150% of the regular hourly wage, weekend overtime without compensatory leave at 200%, and work on statutory public holidays at 300%. Employers must also observe additional pay requirements for night shifts and weekend work.

As of 2025, China's minimum wage varies significantly across regions, with major cities like Beijing and Shanghai leading in higher wages due to the cost of living. As of 2025, some notable examples of minimum wage include:

• ‍Shanghai: ¥2,690 per month (approximately $373 USD)
• ‍Beijing: ¥2,420 per month (approximately $335 USD)
• ‍Shandong (e.g., Jinan, Qingdao): ¥2,200 per month (approximately $305 USD)
• ‍Wuhan: ¥2,210 per month (approximately $306 USD)
• ‍Guangxi: ¥1,690 per month (approximately $234 USD)

The minimum wage is adjusted regularly by local governments to account for inflation and regional economic conditions.

Global expansion shouldn't mean losing time to paperwork or dealing with complicated, country-specific HR systems. An Employer of Record helps you keep your focus on talent by handling the operational side of employment in China. That includes onboarding, contract management, payroll processing, and statutory compliance, all aligned with local laws and best practices. The EOR guarantees that employees are legally employed and properly supported from day one.

This streamlined setup allows you to prioritize recruiting the best people and integrating them into your company culture. Your team stays lean, and you avoid getting caught up in the details of local processes or shifting regulations. For founders, global hiring managers, or HR teams working across borders, an EOR multiplies your impact, reducing admin time, preventing errors, and helping ensure that new hires have a smooth experience from the get-go.

Managing payroll in China requires careful navigation of a complex regulatory landscape that varies by location. Employers must handle the "Five Insurances and One Fund" system, which includes pension, medical, unemployment, work injury, and maternity insurance, plus the housing provident fund. With employer contributions typically ranging from 31–42% of salary and strict compliance requirements, accurate payroll processing is essential.

Monthly submissions to various authorities, progressive individual income tax withholding, and proper documentation are all critical components of Chinese payroll management. Payroll deductions and employer contributions must be remitted to the relevant authorities by the 15th of the following month, with social insurance and housing fund payments due by the end of the month.

Using payroll management software can help employers consolidate payroll data, ensure accurate calculations, and stay compliant with China's frequently changing regulations, ultimately reducing the risk of penalties and administrative challenges.

Hiring in China means taking on local payroll obligations, which often include unique tax rates, contribution rules, and strict documentation. If you're not familiar with the system, or don't have a local entity, it’s easy to make mistakes. That’s where an Employer of Record ccomes in. The EOR manages payroll for your team on your behalf, ensuring every process is accurate, timely, and legally compliant.

Key Ways an EOR Supports Payroll in China:

• Full Legal Compliance: Ensures all payments, deductions, and filings meet country-specific requirements.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Statutory Benefit Contributions: Pays into required social programs and manages country-mandated benefits.
• Employee Documentation: Generates compliant contracts and manages hiring and termination paperwork.
• Local Currency Payouts: Delivers salaries in local currency, avoiding delays or exchange rate issues for employees.

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 commercial and trade activities, 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. As of 2025, all non-national citizens require a Right-to-Work check to be employed legally in China, and employers typically need to assist foreign employees throughout the work permit application process.

Mandatory Leave Entitlement in China

The annual leave entitlement in China is 5 days for a full time worker who has worked for 1-10 years. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In China

China observes the following 7 national holidays spread across several days:

Paid Time Off in China

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.

Maternity Leave In China

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 provinces, with local governments providing additional days beyond the national minimum:

• Beijing: 158 days
• Shanghai: 158 days
• Chengdu: 158 days
• Guangzhou: 178 days

Paternity Leave In China

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:

• Beijing: 15 days
• Shanghai: 10 days
• Chengdu: 15 days
• Guangzhou: 15 days

Sick Leave In China

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:

• Less than 5 years: 3 months sick leave
• 5-10 years of service: 6-9 months sick leave
• 10-15 years of service: 12-18 months sick leave
• 15-20 years of service: 18 months sick leave
• More than 20 years: 24 months sick leave

Parental Leave In China

Parents in China are provided with Childcare Leave, with the duration varying based on the specific provinces:

• Beijing & Shanghai: 5 days of leave yearly until the child turns 3
• Chengdu: No additional parental leave mandated
• Guangzhou: 10 days of leave yearly until the child turns 3

Bereavement Leave

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.

Marriage Leave

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.

When hiring across multiple countries, maintaining consistency in how you deliver employee benefits quickly gets tricky. Each country, including China, has its own legal rules, cultural norms, and contribution systems. An Employer of Record helps you strike the right balance between global structure and local compliance. They take over the complexity of delivering benefits that are aligned with China’s legal requirements and competitive with local market expectations.

From ensuring statutory benefits are in place to managing local onboarding timelines and enrollment systems, the EOR provides a seamless experience for both employer and employee. This makes it easier to grow your team across borders without reinventing your benefits process in each new location. You stay in control of your overall benefits strategy, while the EOR takes care of executing it in a way that works legally and culturally in China. It’s a smarter way to scale benefits globally without losing local relevance.

Termination Process in China

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:

• Employee resignation (with notice)
• Mutual consent
• Employer-initiated termination (based on probationary period, objective reasons, disciplinary measures, or job unsuitability)
• Contract expiration

Notice Period in China

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 of notice (one month's salary). Similarly, employees are obligated to provide their employers with a 30-day notice in written form before resigning. If the employer decides to terminate the employment during the probation period, they must give the employee at least 3 days' notice.

Severance in China

In China, mandatory severance pay depends upon eligibility and is contingent on the employee's tenure:

• Less than 6 months: half a month's salary
• More than 6 months: one month's salary for each year of service (capped at three times the minimum wage and not exceeding 12 months). Partial years of service over six months are rounded up to one year, while partial years less than six months are counted as half a year.
• The maximum number of years service considered is 12 years.