China
Introduction
General overview & country facts, as well as labour regulations.
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Employment Terms
All you need to know about salary & bonuses, working hours & overtime, probation period, notice period & severance pay, as well as all leave types.
COUNTRY PLAYBOOK
China
Everything you need to know about payroll, benefits & hiring top talent in China
Currency
Renminbi (CNY)
Salary payment frequency
Monthly
Capital
Beijing
Time Zone
GMT + 8:00
Official Languages
Mandarin Chinese
Is English spoken?
No
Quick Links
Introduction
General Overview & Economic Facts
- China (Zhōngguó), officially known as the People’s Republic of China (Zhōnghuá Rénmín Gònghéguó), is a country in East Asia
- It spans an area of approximately 9.6 million km2 (3,700,000 mi2) and has a population of over 1.4 billion
- China has the second largest economy by nominal GDP, the largest in terms of PPP and the world’s second wealthiest country by total wealth
- China has a fast-growing major economy and is the world’s largest manufacturer and exporter
- China ranks 85th of the HDI (2019)
Why Employ In China?
- The main exports from China are computers, integrated circuits, textiles, clothes and mobile phones
- 11.48 % of the population is between the ages of 15 and 24 years, with 46.81% of the population being between the ages of 25 and 54. China has a fairly youthful population, making it a favourable country to employ young, energetic employees
Overview Of The Labour Law
- Chinese labour law is not codified in a single piece of legislation and is found in numerous sources including the Labour Law of the People’s Republic of China, the Labour Contract Law of the People’s Republic of China and the Chinese Constitution
- The Labour Contract Law provides more detailed guidelines regarding employment agreements in addition to the rights and responsibilities of employers and employees
- The labour laws safeguard the interests of the employers and employees to provide a safe and secure working environment
Fun Country Facts
- Ice cream was discovered in China some 4,000 years ago. Milk, rice mixture and snow were combined to create the yummy dessert
- In China, every year is represented by one of 12 animals
- The Chinese New Year celebration lasts for 15 days
Why Use Playroll Services For China?
- Employing in China requires companies to have their own legal entity in the country as well as to manage payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in China
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Unemployment Insurance Fund
Calculated on a maximum salary of CNY 28,017.00 per month
0.50%
(Shanghai)
Pension Fund
Calculated on a maximum salary of CNY 28,017.00 per month
16.00%
(Shanghai)
Medical
Calculated on a maximum salary of CNY 28,017.00 per month
9.50%
(Shanghai)
Work-related Injury Insurance
Calculated on a maximum salary of CNY 28,017.00 per month
0.16 – 1.52%
(Shanghai)
Maternity Insurance
Calculated on a maximum salary of CNY 28,017.00 per month
1.00%
(Shanghai)
Housing Fund
Calculated on a maximum salary of CNY 28,017.00 per month
7.00%
(Shanghai)
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Unemployment Insurance Fund
Calculated on a maximum salary of CNY 28,017.00 per month
0.50%
(Shanghai)
Pension Fund
Calculated on a maximum salary of CNY 28,017.00 per month
8.00%
(Shanghai)
Medical
Calculated on a maximum salary of CNY 28,017.00 per month
2.00%
(Shanghai)
Housing Fund
Calculated on a maximum salary of CNY 28,017.00 per month
7.00%
(Shanghai)
Income Tax
Income Tax is ‘Pay As You Earn’
Income bracket per annum
5,000.00 – 36,000.00
3.00%
36,000.00 – 144,000.00
10.00%
144,000.00 – 300,000.00
20.00%
300,000.00 – 420,000.00
25.00%
420,000.00 – 660,000.00
30.00%
660,000.00 – 960,000.00
35.00%
960,000.00 or more
45.00%
Employment Terms
General
Minimum Wage
- CNY 2,590.00 per month (Shanghai)
Working Hours
- Maximum of 8 hours per pay and 40 hours per week
- There are no specific legal requirements concerning rest breaks during a working day. It is common to give employees a 1 hour lunch break. Some employers offer a lunch break period of 2 hours from 12pm until 2pm
- Typical working hours start at 08h00 and end by 18h00, Monday to Friday
Overtime
- Maximum of 3 overtime hours per day and 36 overtime hours per month
Notice Period
- 30 days’ notice
- 3 days’ notice during the probation period
Severance Pay
- 1 month’s salary for each year of service
Probation Period
- There is no statutory probation period
- Optional probation periods may be a maximum of:
– 1 month if the employment contract is 3 months to 1 year
– 2 months if the employment contract is between 1 and 3 years
– 6 months if the employment contract is an indefinite term contract
Bonus
- There is no statutory bonus
- 13th salaries, contractual and discretionary bonuses are all common
Public Holidays
Public holidays 2022
- 1 Jan to 3 Jan- New Year Holiday
- 31 Jan to 6 Feb- Spring Festival
- 3 Apr to 5 Apr- Ching Ming Festival
- 30 Apr to 4 May- Labour Day Holiday
- 3 Jun to 5 Jun- Dragon Boat Festival
- 10 Sep to 12 Sep- Mid-Autumn Festival
- 1 Oct to 7 Oct- National Day Holiday
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by employer
- Employed between 1 and 10 years- 5 days
- Employed between 10 and 20 years- 10 days
- Employed for 20 or more years- 15 days
Sick Leave
- Paid leave
- Paid by employer
- Maximum of 3 months in the first year of employment
- 1 month of sick leave shall be increased for every subsequent full year of employment, to a maximum of 24 months
Maternity Leave
- Paid leave
- Paid by Social Security or the employer
- 98 days
Paternity Leave
- Paid leave
- Paid by employer
- 15 days (most regions)
Family Visit Leave
- Optional leave
- Usually unpaid
- Common to provide:
– 30 days for visiting of a spouse
– 20 days for visiting parents (single employees)
– 5 days for visiting parents (married employees)
Funeral Leave
- Paid leave
- Paid by employer
- Minimum of 1 day, maximum of 3 days
Marriage Leave
- Paid leave
- Paid by employer
- Minimum of 3 days. It is common to offer 10 days
Start hiring in China today!