China Payroll Guide: Rules, Formula, Deductions and Employer Obligations

Last updated: November 2, 2026

Payroll in China is not simply the transfer of an agreed salary to an employee’s bank account.

Employers must connect the employee’s labor contract, attendance, overtime, variable compensation, social insurance, housing provident fund, individual income tax, leave, lawful deductions, and payroll records in one controlled monthly process.

The basic gross-to-net calculation is relatively straightforward. The real difficulty is using the correct employee data, locally applicable contribution settings, tax treatment, and employment documents every month.

This China payroll guide explains the calculation process, employer obligations, statutory deductions, total employment cost, foreign-employee issues, monthly controls, and common compliance mistakes.

Companies that already have a legal employing entity in China but need support managing monthly payroll calculations, statutory filings, and contributions can review HROne’s China payroll outsourcing services.

Expert review: This guide has been reviewed by HROne’s China payroll and compliance team based on current payroll, individual income tax, social insurance, and housing provident fund requirements. Last reviewed: September 2026.

China Payroll at a Glance

A compliant payroll process usually involves:

• Confirming gross salary and variable compensation
• Reviewing attendance, leave, and overtime
• Calculating employee social-insurance contributions
• Calculating the employee’s housing-fund contribution
• Calculating individual income tax
• Processing other lawful deductions
• Determining net salary
• Calculating employer statutory contributions
• Paying salary on the agreed date
• Filing and remitting tax and statutory contributions
• Issuing a clear payslip
• Reconciling payroll with bank payments and authority records
• Retaining supporting evidence

A reliable payroll calendar should map the applicable China payroll deadlines for calculation, filing, and payment.
The legal framework is primarily national, but social-insurance rates, contribution bases, housing-fund settings, filing procedures, and some payroll practices are administered locally.

An employer should therefore avoid using one unverified payroll template for every Chinese city.

The Core China Payroll Formula

China payroll should be viewed from two perspectives: the employee’s net pay and the employer’s total cost. For regional budgeting, compare China vs Southeast Asia labor costs using total employer cost rather than base salary alone.

Employee Gross-to-Net Formula

A simplified employee calculation is:

Gross salary
− employee social-insurance contributions
− employee housing-fund contribution
− individual income tax
− other lawful deductions
= net salary

Gross salary may include:

• Basic contractual salary
• Fixed allowances
• Commission
• Performance bonuses
• Attendance adjustments
• Overtime
• Shift payments
• Other taxable or non-taxable items, depending on their treatment

Every payroll item should have a clear contractual, policy, attendance, or approval basis.

Employer-Cost Formula

The employer’s total cost is normally higher than the employee’s gross salary:

Gross salary
+ employer social-insurance contributions
+ employer housing-fund contribution
+ employer-provided benefits
+ payroll and employment administration costs
= estimated total employment cost

Foreign employers frequently underestimate China hiring costs because they budget only for gross salary.

HROne’s China labor cost calculator can be used for an initial cost estimate, but final calculations should use the employee’s actual city, compensation, and contribution settings.

Example: How a China Payroll Calculation Works

For the detailed calculation method, see how to calculate payroll in China. The example below makes the inputs explicit so readers can distinguish salary deductions from employer-only costs.

Shanghai Worked Example: RMB 30,000 Monthly Salary (Month 1 vs Month 12)

Assume an eligible resident employee earns RMB 30,000 gross monthly, with approved social-insurance and housing-fund bases of RMB 30,000, ordinary housing-fund contributions at 7% per side, Class I work-injury contributions at 0.2%, and no supplementary fund. The employee declares RMB 2,000 of eligible special additional deductions each month and has no bonus, other taxable income or other deductions. These are illustration inputs, not the settings for every employer.

The Shanghai HRSS 2026 social-insurance base notice sets RMB 7,546–37,731 from July 1, 2026; RMB 30,000 falls within it. HRSS employer rates, employee rates, the 2026 medical-contribution notice and work-injury schedule support the insurance assumptions. The Shanghai 2026 housing-fund notice permits ordinary contributions of 5%–7% per side and a base of RMB 2,740–37,731; this example selects 7%.

This tax illustration holds salary, deductions and contribution inputs constant across twelve salary months with the same employer; it is not a claim that every January–December 2026 payroll uses unchanged contribution settings. Real payroll must apply effective-date changes and actual tax status. The STA cumulative withholding method and rate table explain why take-home pay can fall as cumulative taxable income crosses a bracket even when salary stays the same.

Step 1: Confirm the Employment and Payroll Structure

Before calculating payroll, determine who legally employs the worker.

Employer Has a Chinese Entity

A company with an appropriate mainland China entity may employ the worker directly and administer payroll internally or through an external payroll provider.

The Chinese entity remains responsible for the employment relationship even when a payroll provider performs the calculations and filings.

Employer Does Not Have a Chinese Entity

An overseas company without an appropriate local employing entity cannot treat payroll as a standalone calculation issue. The company must first establish a legally appropriate employment structure for the worker.

Payroll treatment should then follow the legal employer, employee work location, tax status, statutory-registration requirements, and applicable employment arrangement.

For companies hiring through an EOR arrangement, HROne’s China EOR service is a service option to consider alongside the payroll processes discussed here.

Do not relabel a managed employee as an independent contractor simply to make cross-border payments. Confirm genuine independence, the service deliverables and relevant tax/documentation requirements before choosing contractor payroll in China.

Step 2: Align Payroll with the Labor Contract

Payroll should begin with a valid written labor contract and supporting company policies.

The contract should clearly address matters such as:

• Employer and employee identity
• Job title and duties
• Work location
• Contract term
• Probation, if applicable
• Working-hours system
• Base salary
• Salary-payment date
• Variable compensation
• Social insurance
• Housing provident fund
• Benefits
• Leave
• Contract modification and termination

The salary stated in the labor contract should be consistent with the employer’s payroll setup. If the company uses a salary package containing base pay, allowances, bonuses, or commissions, the supporting rules should explain how each element is earned and calculated.

Employers should avoid maintaining one salary in the employment contract, another in the offer letter, and a third in payroll without documentation explaining the difference.

For the supporting files employers should maintain, see HROne’s China HR documentation guide.

Step 3: Calculate Gross Salary

Gross salary is the employee’s compensation before employee statutory deductions and individual income tax.

A monthly calculation may include:

Contractual monthly salary
+ earned commission
+ bonus
+ taxable allowances
+ overtime
+ other earned compensation
− supported absence or attendance adjustments
= gross payroll amount

The exact treatment depends on the employee’s contract, applicable policy, working-hours arrangement, attendance records, and the nature of each payment.

Fixed Salary

The payroll system should reflect the fixed salary stated in the labor contract or a valid written amendment.

If the employee’s salary changes, the employer should document:

• New salary
• Effective date
• Reason for the change
• Required approval
• Employee acknowledgment or agreement
• Effect on statutory contribution bases
• Effect on bonus or benefit calculations

Bonuses and Commission

Commission and bonus calculations should be supported by written rules.

A fixed extra-month payment should be documented separately from a discretionary bonus; see our guide to 13th month pay in China for contract, calculation and tax considerations.

The payroll team should receive:

• Applicable calculation period
• Performance result
• Approved amount
• Payment date
• Tax treatment
• Any clawback or adjustment
• Approval record

Discretionary wording does not eliminate the need for consistent administration. A repeated or formula-based payment can become the subject of an employment dispute if the employer cannot explain its calculation.

Equity awards require separate treatment from ordinary cash bonuses. For RSUs, stock options, and other share-based incentives, see HROne’s equity compensation in China guide for IIT calculations, payroll reporting, and SAFE requirements.

Allowances and Reimbursements

Allowances and business-expense reimbursements should not be treated as interchangeable.

A recurring cash allowance may form part of taxable compensation. A properly supported business reimbursement may receive different treatment depending on the expense, documentation, and applicable tax rules.

Payroll and finance teams should agree on:

• Eligible expense
• Approval limit
• Required invoice or receipt
• Reimbursement deadline
• Payment channel
• Tax treatment
• Record-retention responsibility

Step 4: Include Attendance, Leave and Overtime

Payroll accuracy depends on accurate time and attendance records.

Before payroll closes, HR should provide:

• Working days
• Recorded attendance
• Approved leave
• Unapproved absence
• Overtime hours
• Rest-day work
• Statutory-holiday work
• Shift information
• Late arrivals or early departures, where relevant
• New-hire and termination dates

Employers should not make salary deductions simply because a manager requests them. Every deduction should have a lawful and documented basis.

For daily and hourly wage calculations, including mid-month joining, leaving, and unpaid leave deductions, see HROne’s China 21.75 salary divisor guide.

Under the standard working-hours system, statutory minimum overtime pay is generally 150% for ordinary working-day overtime, 200% for rest-day work where compensatory rest is not arranged, and 300% for statutory-holiday work. Confirm the applicable wage base, approved working-hour system and evidence; compensatory leave does not replace statutory-holiday premium pay. See overtime pay in China for the detailed rules.

Step 5: Calculate Social Insurance

China’s social-insurance system generally includes:

1. Basic pension insurance
2. Basic medical insurance
3. Unemployment insurance
4. Work-related injury insurance
5. Maternity insurance

Employers and employees normally contribute to specified programs. Work-related injury and maternity contributions are generally borne by the employer, although local administration and program integration can differ.

The central calculation is:

Employee contribution = applicable contribution base × employee rate

Employer contribution = applicable contribution base × employer rate

Contribution Base

The contribution base is not always the employee’s current monthly gross salary.

Local authorities normally establish a contribution floor and ceiling. The employee’s applicable salary figure is restricted by those limits:

• If the applicable salary is below the local floor, use the floor.
• If it is between the floor and ceiling, use the prescribed salary amount.
• If it exceeds the ceiling, use the ceiling.

The method for determining the employee’s salary reference and the date of annual adjustment can differ by city.

Employers should not automatically contribute at the minimum base when an employee’s actual prescribed base is higher.

For the complete employer process, see HROne’s China social insurance guide.

Step 6: Calculate the Housing Provident Fund

The housing provident fund is normally processed with payroll but is legally separate from the five social insurances.

Employers and employees generally make contributions using a locally prescribed base and contribution rate.

The payroll team should verify:

• Employee registration
• Employer and employee rates
• Contribution base
• Local floor and ceiling
• Effective adjustment period
• Employee account details
• Filing and payment result

Social insurance and housing fund may use different authority systems, rules, or adjustment schedules. They should be separately reconciled even when they appear together on the payslip.

Step 7: Calculate Individual Income Tax

Employers paying salary are generally responsible for withholding and remitting individual income tax.

China’s official Individual Income Tax Law provides that organizations and individuals paying taxable income are withholding agents.

For resident individuals, salary forms part of comprehensive income and is generally subject to cumulative withholding during the year.

Resident-Employee Cumulative Calculation

A simplified cumulative formula is:

Cumulative taxable income
= cumulative gross taxable income
− cumulative standard deduction
− cumulative special deductions
− cumulative special additional deductions
− other lawful cumulative deductions

Then:

Cumulative tax payable
= cumulative taxable income × applicable rate − quick deduction

Finally:

Current-month tax withholding
= cumulative tax payable − tax already withheld in earlier months

The standard deduction for a resident individual is RMB 60,000 per tax year, commonly applied cumulatively at RMB 5,000 for each applicable month.

Resident Comprehensive-Income Rates

These brackets apply to taxable comprehensive income after applicable deductions, not directly to gross salary.

Special Deductions

Potential deductions include qualifying employee contributions to:

• Basic pension insurance
• Basic medical insurance
• Unemployment insurance
• Housing provident fund

Special Additional Deductions

Qualifying resident taxpayers may also claim deductions for specified expenditures, including:

• Children’s education
• Continuing education
• Medical treatment for serious illness
• Housing-loan interest
• Housing rent
• Support for elderly dependents
• Care of children under three

The employee must provide the required information. Employers should not invent, estimate, or change deduction details without proper support.

Non-Resident Employees

A non-resident individual’s salary treatment differs from the cumulative resident calculation. Under the IIT Law, monthly salary taxable income is generally calculated after a RMB 5,000 monthly deduction, with the applicable schedule and any treaty or sourcing considerations.

Foreign employees require a fact-specific review because tax residence, days in China, work location, payment source, cost-bearing entity, overseas salary, bonus, equity compensation, and tax-treaty provisions can all affect the result.

For a deeper explanation, see HROne’s China individual income tax guide.

Monthly IIT Filing and Payment

The IIT Law provides that withheld tax should generally be paid to the state treasury and the withholding return submitted within the first 15 days of the following month.

A monthly control process should confirm:

• Every employee is included
• Tax identification details are correct
• Employee status is correct
• Gross taxable income is complete
• Statutory deductions match payroll
• Special additional deductions are supported
• Prior-month cumulative data is correct
• Current-month withholding matches payroll
• The return was accepted
• Payment was completed
• Corrections were documented

For the wider employer filing process, see HROne’s China IIT compliance guide.

Holiday and weekend adjustments follow the applicable tax calendar, not an automatic extension chosen by the employer. For example, the STA’s 2026 filing-deadline notice moves the November deadline to November 16, 2026 because November 15 is a Sunday. Check the relevant month and any approved local adjustment; the ordinary statutory rule remains filing and remittance by the following month’s 15th. The China Individual Income Tax Law reference provides the legal framework.

Step 8: Determine Net Salary

Once employee deductions and IIT have been calculated:

Net salary = gross salary − employee statutory contributions − IIT − other lawful deductions

Before approving payment, payroll should compare:

• Net salary with the payroll register
• Payroll register with the bank-payment file
• Employee bank details with the approved master data
• Current salary with the contract or salary amendment
• Unusual month-over-month changes
• Negative or zero net payments
• Duplicate employees or payments
• New-hire and terminated-employee status

A person preparing the payroll file should not be the only person authorizing the bank payment.

Step 9: Calculate Employer Contributions and Total Cost

Employer-side contributions do not reduce employee net salary. They are additional employer costs.

For each employee, the company should separately track:

• Gross salary
• Employer pension contribution
• Employer medical contribution
• Employer unemployment contribution
• Work-injury contribution
• Maternity contribution, where separately administered
• Employer housing-fund contribution
• Supplementary benefits
• Commercial insurance
• Other employer-paid items

This produces a more reliable cost figure for hiring approvals, budgets, and accounting.

HROne’s China payroll tax guide explains the relationship between IIT withholding, employee deductions, employer contributions, filing, payment, and payroll evidence.

City-Level Payroll Differences

China does not use one universal social-insurance or housing-fund configuration.

The following can vary by city:

• Contribution rates
• Contribution floors and ceilings
• Work-injury rate
• Housing-fund rate
• Contribution-base adjustment date
• Registration platform
• Filing process
• Payment deadline
• Required employee documents
• Treatment of certain foreign employees

A multi-city employer should maintain a controlled location table showing:

• City
• Registered employee
• Applicable base
• Employee rates
• Employer rates
• Housing-fund settings
• Effective date
• Source of the rule
• Last verification date
• Next expected review

Using a Shanghai setting for an employee registered in Shenzhen—or applying one national percentage to all employees—can produce both underpayments and overpayments.

For the 2026 adjustment period, Beijing’s published social-insurance base is RMB 7,270–36,348 from July; Shanghai’s is RMB 7,546–37,731 from July 1. Guangdong’s enterprise pension range for Guangzhou and Shenzhen becomes RMB 5,521–27,603 from July 1, 2026. These are not interchangeable bases for every insurance branch or housing-fund account. See the social insurance contribution base by city table and its city notices before applying payroll settings.

Sources: Beijing HRSS, Shanghai HRSS and Guangdong’s 2026 pension notice.

Payroll for Foreign Employees

Foreign-employee payroll uses the same basic gross-to-net structure but normally requires additional controls.

The employer should coordinate:

• Legal employing entity
• Work permit
• Work-type residence permit
• Payroll start date
• Tax registration
• Tax-residence analysis
• Days in and outside China
• China and overseas compensation
• Social-insurance registration
• Any bilateral social-security exemption
• Relocation benefits
• Housing or schooling benefits
• Annual tax reconciliation
• Assignment termination

The official Guide to Working and Living in China as Business Expatriates explains work authorization, social insurance, and individual income tax for foreign workers.

Split Payroll

Some expatriates receive part of their compensation in China and part outside China.

A split payment does not automatically mean that only the Chinese payroll amount is reportable or taxable in China. The employer should review:

• Where work is performed
• Who bears the cost
• Employee tax residence
• Overseas salary and bonus
• Equity compensation
• Assignment agreement
• Applicable tax treaty
• Chinese reporting requirements

The China payroll team needs complete compensation information even when another group company makes part of the payment.

For expatriates receiving compensation through both Chinese and overseas payrolls, a China shadow payroll workflow can help reconcile the separate payments, assess applicable IIT, and document the reporting process without creating an additional salary transfer.

Social-Security Agreements

Employees from certain countries may qualify for an exemption from specified Chinese social-insurance contributions under a bilateral agreement.

An exemption is not automatic. The employee may need a valid coverage certificate, and the local authority may need to accept the application.

Payroll should retain:

• Coverage certificate
• Chinese application
• Authority confirmation
• Exempted programs
• Effective date
• Expiry date
• Renewal record

New-Hire Payroll Process

Before the employee’s first payroll, confirm:

1. Signed labor contract
2. Employment start date
3. Legal name and identification
4. Bank information
5. Salary and payment date
6. Work city
7. Working-hours system
8. Tax registration
9. Social-insurance registration
10. Housing-fund registration
11. Deduction information
12. Benefits
13. Commission or bonus eligibility
14. Attendance setup
15. Work authorization for foreign employees
16. Payroll-data consent and access controls

The first payroll should receive additional review because registration failures, incomplete deductions, and incorrect effective dates often appear during onboarding.

Monthly Payroll Workflow

A reliable monthly process can be organized as follows.

1. Open the Payroll Period

Confirm the payroll calendar, data cutoff, payment date, filing deadlines, approvers, and funding date.

2. Collect Inputs

Collect new hires, departures, attendance, leave, overtime, salary changes, bonuses, commissions, allowances, deductions, expense reimbursements, and employee-data changes.

3. Validate Inputs

Compare every input with its supporting contract, policy, attendance record, or approval.

4. Run the Calculation

Calculate gross salary, employee contributions, taxable income, IIT, net pay, employer contributions, and total cost.

5. Review Exceptions

Investigate major salary movements, manual changes, missing bank details, negative net pay, unusually high deductions, duplicate payments, and rejected authority records.

6. Obtain Approval

HR, finance, and the authorized business approver should complete their assigned reviews.

7. Pay Employees

Release the approved bank-payment file using controlled payment access.

8. File and Remit

Submit IIT, social-insurance, and housing-fund filings and complete payment by the applicable deadlines.

9. Issue Payslips

Provide employees with an understandable record of earnings, deductions, tax, and net salary.

10. Reconcile and Close

Reconcile the payroll register, bank payment, tax filing, statutory filing, accounting entries, and provider invoice.

Payroll Cutoffs, Late Changes and Retroactive Adjustments

A controlled payroll process should have a clearly defined monthly cutoff for salary changes, attendance, leave, overtime, bonuses, commissions, new hires, terminations, and other payroll inputs.

Changes received after the cutoff should not simply be added to the payroll file without review. The payroll team should determine whether the change can still be processed in the current payroll cycle or whether it should be carried forward as a documented adjustment in the next cycle.

Common late payroll changes include:

• Salary increases approved after payroll calculation
• Late attendance or overtime records
• Bonuses or commissions approved after the cutoff
• Incorrect employee bank information
• Changes to an employee’s termination date
• Late notification of unpaid leave or absence
• Corrections to social-insurance or housing-fund information
• Changes affecting individual income tax withholding

For every late or retroactive adjustment, payroll should retain a clear record of:

• The original payroll amount
• The corrected amount
• The reason for the adjustment
• The payroll period affected
• The person who requested and approved the change
• Whether a tax or statutory filing also requires correction
• Whether the adjustment will affect the employee’s current or next net payment

Companies should also avoid making undocumented manual changes directly in the payroll file. Late adjustments should follow the same approval and reconciliation controls as the original payroll calculation.

Payslip Contents

A clear payslip should normally show:

• Employee name or identifier
• Pay period
• Base salary
• Variable earnings
• Overtime
• Allowances
• Gross salary
• Employee social-insurance deductions
• Employee housing-fund deduction
• Individual income tax
• Other deductions
• Net salary
• Employer contributions, if shown separately

The payslip should match the payroll register and the amount transferred to the employee.

Payroll Corrections

Errors should be corrected through a controlled process.

The correction record should explain:

• What was wrong
• Which employee and period were affected
• Why the error occurred
• Correct gross, deduction, tax, and net amounts
• Whether authority filings require amendment
• Whether the employee is owed money
• Whether an overpayment must be recovered
• Who approved the correction
• How recurrence will be prevented

Do not silently offset a significant prior-month error against current salary without checking the legal basis and communicating with the employee.

Year-End and Annual Reconciliation

Resident individuals’ comprehensive income is calculated annually, even though employers withhold tax during the year.

The State Taxation Administration’s annual reconciliation measures explain how annual comprehensive income, deductions, prepaid tax, refunds, and additional tax are reconciled.

Employers may need to help employees:

• Verify income records
• Confirm tax already withheld
• Correct employer reporting errors
• Confirm deduction information
• Obtain payroll documents
• Understand whether reconciliation is required
• Address multiple income sources
• Complete departure-related tax work

The employer should not promise that every employee will receive a refund. Reconciliation can produce a refund, no change, or additional tax.

Termination and Final Payroll

Final payroll requires coordination between HR, payroll, finance, legal, and the employee’s manager.

Potential items include:

• Salary through the termination date
• Unused statutory annual leave
• Approved expenses
• Earned commission
• Contractual or statutory bonus
• Severance
• Payment in lieu of notice
• Lawful deductions
• Social-insurance contribution
• Housing-fund contribution
• Individual income tax
• Final payslip
• Certificate and offboarding documents

The tax treatment of salary, bonus, severance, and other termination payments should be reviewed separately.

Payroll should not be closed until the employer has confirmed the legal termination date, payment obligations, approved deductions, and required statutory filings.

Payroll Data Protection

Payroll records contain personal information and may include sensitive personal information, particularly financial-account, medical-health and certain identity data. Payroll access, vendor processing, retention, transfer and incident controls should be managed separately from salary calculations.

For the detailed PIPL requirements affecting employee salary and payroll records, see HROne’s payroll data privacy guide for China.

In-House vs Outsourced China Payroll

Compare China payroll services with your current staffing and approval process. Ask for an itemized quote covering employee count, cities, payroll complexity, reporting, setup and optional services; review HROne payroll pricing for the available pricing information. Confirm the applicable terms in the agreed quote.

Common China Payroll Mistakes

Employers should watch for the following problems:

• Paying salary without a documented employment structure
• Using a contract salary that does not match payroll
• Applying one social-insurance rate nationwide
• Contributing at an unsupported minimum base
• Treating housing fund as the same as social insurance
• Applying a flat IIT percentage to gross salary
• Ignoring the cumulative resident withholding method
• Omitting overseas compensation for foreign employees
• Using unsupported tax-free allowances
• Failing to include overtime
• Making deductions without a lawful basis
• Paying terminated employees after the final month
• Missing authority rejections
• Failing to reconcile payroll with bank payments
• Keeping no approval trail
• Sending payroll data through uncontrolled channels

Internal Payroll Audit Checklist

Employment Setup

• Does every employee have a valid written contract?
• Does payroll match the contract and approved amendments?
• Is the correct legal entity paying the employee?

Employee Master Data

• Are identity and bank details correct?
• Are city, tax, and statutory registrations complete?
• Are changes independently reviewed?

Earnings

• Are salary, bonus, commission, overtime, and allowances supported?
• Are payroll cutoffs consistently applied?
• Are manual entries documented?

Statutory Deductions

• Are the correct city rates and bases used?
• Are social insurance and housing fund separately reconciled?
• Are annual base changes implemented?

Individual Income Tax

• Is resident or non-resident status correctly configured?
• Is cumulative withholding accurate?
• Are employee deductions supported?
• Do filings match payroll?

Payment and Reconciliation

• Was payroll independently approved?
• Does the bank file equal the approved net-pay total?
• Were tax and statutory payments accepted?
• Do payroll totals match accounting?

Foreign Employees

• Is all China and overseas compensation considered?
• Are work authorization and payroll dates aligned?
• Are social-security exemptions documented?
• Are travel days and tax-residence facts monitored?

Data Protection

• Is access restricted?
• Are transfer channels controlled?
• Are provider permissions reviewed?
• Is retention documented?

Frequently Asked Questions

How is payroll calculated in China?

Payroll normally starts with gross salary. Employee social-insurance contributions, housing-fund contributions, IIT, and other lawful deductions are subtracted to determine net salary.

Is gross salary the employer’s total cost?

No. The employer normally pays additional social-insurance and housing-fund contributions, as well as benefits and administration costs.

What is the standard IIT deduction?

For resident comprehensive income, the statutory deduction is RMB 60,000 per tax year, commonly reflected cumulatively at RMB 5,000 per applicable month. Other qualifying deductions may also apply.

Does every Chinese city use the same payroll rates?

No. Social-insurance and housing-fund rates, bases, and procedures can differ by city.

When must employers file withheld IIT?

Under the IIT Law, withheld tax and the related return should generally be submitted within the first 15 days of the following month.

Are foreign employees included in Chinese payroll?

Foreign employees working in China generally require compliant payroll and tax reporting. Their treatment may also depend on tax residence, overseas compensation, social insurance, and treaty provisions.

Can an employee waive social insurance?

A private agreement normally cannot override mandatory social-insurance obligations.

Must employers issue payslips?

Employers should provide a clear record explaining earnings, deductions, IIT, and net salary. Payslips are also an important payroll control and dispute record.

How much does payroll outsourcing cost in China?

Pricing depends on employee count, work cities, compensation complexity, reporting requirements, implementation and the agreed service scope. A quote may use a recurring per-employee or account charge with separate setup and optional-service items. Compare like-for-like inclusions, funding and correction responsibilities rather than a headline fee. See HROne payroll pricing and request a quote for the actual workforce; no fixed price is assumed.

Conclusion

China payroll is a monthly employment-compliance process, not merely a salary calculation.

Employers must align payroll with the labor contract, attendance, overtime, local statutory contributions, IIT withholding, bank payments, accounting, and employee records.

The most reliable payroll process uses documented inputs, city-specific settings, independent approval, authority reconciliation, and controlled handling of employee data.

Companies that already employ staff through a Chinese legal entity but need support with monthly payroll calculation, statutory filings, payslips, and payroll administration can learn more about HROne’s China payroll services.