The Easy Guide to the Housing Fund in China


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The Housing Fund is a sort of social insurance in China that differs from other types of welfare in terms of how it is controlled and handled.

The contributions to the housing fund are made by both employer and employees and these vary from city to city in China.

Understanding more about how it works is the key to avoid problems when contributing to it and to make sure that the company’s business is 100% compliant with Chinese law.

What is the housing fund in China?

In China, different cities have different laws and regulations regarding social securities and housing funds.

All Chinese employees and employers are required to contribute the mandatory social insurance and other social benefits such as housing funds and social security funds on a monthly basis.

In 1999, Housing Fund was established, for the purpose of helping Chinese employees save money in terms of buying their own properties. By doing so, social stability and security have been guaranteed in China. Together with other types of social welfare programs, Housing Fund is legislated by the government at a national level, but all the local governments have the authority to set up the contribution rates on their own.

Differences between the housing fund and the other mandatory insurances

The ministry of human resources and social security regulated the welfare and social security system, and there are five social insurance items in the welfare program: maternity, medical, pension, work-related injury, and unemployment insurances.

When it comes to the Chinese welfare system, the Housing Fund is generally administrated respectively by the Ministry of Housing or other local Housing Funds offices, but always included inside the system. The core difference between the Housing Fund and other social schemes is that there is no social pool for the Housing Fund because all the amount will go to the employee’s personal account. Moreover, the credits can only be withdrawn for specific situations, such as the down payment, construction, purchase, renovation of the property, and paying back a mortgage.

Housing fund contributions

Example: Base and Rate of Publicly Accumulated Housing Fund in Shanghai


The rate of publicly accumulated housing fund payment for employee and employer and employer is 7% respectively.


Contribution Base= on the previous year’s monthly average salary of the employee.

Employees who start new work from January 1st, 2015 shall calculate the housing fund contribution base in accordance with the employee’s second-month salary or the actual monthly average salary since the employee starts new work.

Employees who joined from January 1st, 2015 shall calculate the housing fund contribution base in accordance with the month salary after joining or the actual average salary.

For 2015 (July 1, 2015-June 30, 2016), the upper limit of the publicly accumulated housing fund contribution base is RMB 2,290, the upper limit of small private businesses and their employees and freelancers is RMB 3,924.

For 2015(July 1, 2015-June 30, 2016), the lower limit of publicly accumulated housing fund contribution base is RMB 254, the lower limits of small private business and its employees and freelancers is according to this standard.

The amount of publicly accumulated housing fund monthly payment= contribution Base x (rate of publicly accumulated housing fund payment of employee+ rate of publicly accumulated housing fund payment of employer).

How to register the housing fund account for your employees

Typically, registering with the Housing Fund Bureau entails the following steps:

  • Establishing a Housing Fund Bureau account. Companies are normally required to produce the company’s business license as well as an ID document for the legal representative of the company.
  • In most cases, applications are accepted right away. For payments to the housing fund, the company will be given a unique account number.
  • To automate contribution payments, companies must execute a contract with the Housing Fund Bureau, the firm, and an appropriate bank. The first payment, like social insurance, must be made with a cheque provided by the firm.

Within 30 days of their inception, new businesses must register with the local Housing Fund Bureau to be able to contribute to the Housing Fund. When new employees are hired, the employer must register them with the Housing Fund Bureau within 30 days after their first day on the job. Some cities like Shanghai or Beijing allow companies to update the details online. But in other cities, a member of the HR department has to go to the local bureau to update all the information.

We can help you with this process to make it easier for you and to guarantee that everything is compliant.

A fine between 10,000 RMB and 50,000 RMB is imposed if the employer fails to open the Housing Fund account for the employee.

Can employees withdraw their housing fund?

Employees can withdraw their housing fund but only when they have to use it to pay to buy a house in China. When an employee requests a withdrawal from his or her own Housing Fund, the employer must validate the request and give a withdrawal certificate.

The employee next submits his or her withdrawal application to the Housing Fund Bureau, which will approve or reject it within three days of receipt. Withdrawals from the Housing Fund, however, are subject to a wide range of local laws.

How HROne can be beneficial to your business

HROne’s service can handle the complete employee benefits for your company in compliance with the local policies and also can take care of the visa for your company’s expats employees. We can directly hire employees for a company not having a legal entity in China by our specialized Employee Leasing / Talent dispatching services.

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