What are the statutory contributions for employees and employers in China?
Employee Income Tax
The Chinese tax system applies a progressive tax structure. For the tax year 2021, the tax rates for residents are as follows:
| Monthly Taxable Income | Tax Rate |
| CNY 3,000 | 3% |
| CNY 3,001 – CNY 12,000 | 10% |
| CNY 12,001 – CNY 25,000 | 20% |
| CNY 25,001 – CNY 35,000 | 25% |
| CNY 35,001 – CNY 55,000 | 30% |
| CNY 55,001 – CNY 80,000 | 35% |
| over CNY 80,000 | 45% |
Employer Payroll Contributions
Employers are required to contribute to their employees’ social insurance accounts, including pension insurance, medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance. The contribution rates vary depending on the location and the employee’s salary, but they generally range from 20% to 30%.
What is the minimum wage in China?
China sets different minimum wage rates depending on the province and areas of the nation where employees work. You may refer to this table.
What is the payroll cycle in China?
The standard payroll cycle in China is monthly. The standard salary date typically falls on the 10th day of the following month; however, this may vary by employer.
How long is the working hours in China?
Full time employees customarily work 40 hours per week. If they are required to work outside of these hours, they are entitled to overtime pay. Overtime in China is limited to 36 hours per month and is set at a higher pay rate.
How many leaves are employees entitled to?
- Standard paid time off — full-time employees in China are entitled to at least 5 days of paid annual leave per year on the condition that they complete a year of service. The amount of paid annual leave accrues gradually over time.
- Compulsory annual public holidays — there are 7 national public holidays in China.
- Minimum paid sick leave — full-time employees in China are entitled to paid sick leaves; however, the amount of leave and pay may vary depending on the employer and length of contract. Employees who have completed 10 years of service are entitled to 3 months of paid sick leave while employees with 20 years of work history and 15 years with their current employer are entitled to unlimited paid sick leave.
What are the public holidays in China?
Here is the list of public holidays in China for 2023:
| Date | Name |
| 1 Jan | New Year’s Day |
| 2 Jan | New Year’s Holiday |
| 21 Jan | Spring Festival Holiday |
| 22 Jan | Spring Festival |
| 23 Jan | Spring Festival Holiday |
| 24 Jan | Spring Festival Holiday |
| 25 Jan | Spring Festival Holiday |
| 26 Jan | Spring Festival Holiday |
| 27 Jan | Spring Festival Holiday |
| 5 Apr | Ching Ming Festival |
| 1 May | Labor Day (in lieu) |
| 2 May | Labor Day Holiday |
| 3 May | Labor Day Holiday |
| 22 Jun | Dragon Boat Festival |
| 23 Jun | Dragon Boat Festival Holiday |
| 24 Jun | Dragon Boat Festival Holiday |
| 29 Sep | Mid-Autumn festival |
| 1 Oct | National Day |
| 2 Oct | National Day Holiday |
| 3 Oct | National Day Holiday |
| 4 Oct | National Day Holiday |
| 5 Oct | National Day Holiday |
| 6 Oct | National Day Holiday |
How long is the maternity and paternity leave in China?
- Statutory maternity leave — female employees in China are entitled to at least 98 days of paid maternity leave, which may be extended for certain situations.
- Statutory paternity leave — male employees in China are entitled to 7 days of paid paternity leave.
- Statutory parental leave — employees in China may be entitled to 3 years of unpaid parental leave to care for their child.
What rights do employees have upon leaving employment due to certain conditions?
Employers can terminate employees for valid reasons such as poor performance or misconduct, but this must be done through a fair process. When an employee’s service with a company is terminated for certain reasons, they are entitled to certain rights and benefits, including:
- Notice period — the minimum notice period for termination varies based on the length of service, ranging from 1 to 6 months.
- Severance pay — employees with at least two years of service are entitled to severance pay, which is calculated based on the length of service and their average monthly wage.
- Probation period — employees are entitled to 6 months of probation period at the maximum.
What is the type of visa for employees in China?
In order to be granted an employment visa in China, the applicant must have a valid job offer from a Chinese employer while the employer obtains their work and residence permit. In addition, the applicant must meet the health and character requirements to qualify for the visa.
China offers a variety of employment visas, including:
- Z Visa — for foreigners coming to work in China, with a duration of stay of 90 days.
- M Visa — for foreigners invited to China for commercial purposes, with a duration of stay of 30-60 days.
- R Visa — for skilled professionals whose qualifications are in urgently needed in China, with a duration of stay for 30 months
- S1 Visa — for parents, spouses, children under 18 and parents-in-law of foreigners who work or study in China and other personal affairs, with a duration of stay of more than 180 days.
- S2 Visa — for family members of foreigners who work or study in China with a duration of stay up to 180 days.
- F Visa — for study exchanges, study, travel, or other (non-commercial) activities with a duration of stay of 30-90 days.
Standard VAT Rate
The standard VAT rate in China is 13%.