China Mandatory Benefits & Social Security Policies

Hiring an employee in China may generally increase 35-40 percent more than employee’s gross salary because of the mandatory benefits.

Mandatory benefits shall be contributed by both employer and employees in China and it consists of social insurances (including Medical Insurance, Pension, Unemployment Insurance, Maternity Insurance, and Work Related Injury Insurance) and housing fund.

The mandatory benefit contribution policies are very complicated, in China, each province, cities have their own contribution policies and bases. As a HR, especially the foreign company HR, shall be very clear about the policies where their company has the presence and be very careful about the policy updates and changes.

Example: HROne Labor Cost Calculation in Shanghai

The following is a simple example about an employee’s mandatory benefits contribution details based on the policy in Shanghai.

Monthly Gross Salary (in RMB) 10,000
City ShangHai
Do you have a union (Y/N) No
Do you need the Employer Liability Insurance (Y/N) No
Chinese Employee (Y/N) Yes

The following is the Employer Contribution details for the basic gross salary RMB 10,000 in Shanghai.

The following is the Employee Contribution details for the basic gross salary RMB 10,000 in Shanghai.

All the data here are collected and translated by HROne – China Payroll Solutions. HROne welcome reproduced, but please indicate source.

 

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HROne – China Payroll & HR Outsourcing Solutions

To know more about:

China Payroll Service Detail

China Benefits Administration Service

China Employee Leasing/Talent Dispatch Service