Employer of Record (EOR) in China
Expanding into China presents unique challenges due to its complex regulatory environment. Our Employer of Record (EOR) services in China simplify the process by ensuring compliance with local laws while handling employee onboarding, payroll, and taxes. With our support, you can focus on scaling your operations without the need to establish a legal entity in China.
Employment Benefits
Mandatory benefits
In China, employee benefits and statutory contributions are governed by national laws but can differ significantly by region, including provinces and cities. The primary benefits include social insurance, which covers pensions, medical insurance, unemployment insurance, work injury insurance, and maternity insurance, as well as the housing provident fund. The contribution rates for these benefits vary across different regions, as local governments have the authority to set their own rates within the framework established by the central government.
For instance, Shanghai :
| Pension Insurance
(Base pension, Individual account pension, transitional pension) |
Employers contribute to pension funds to secure employees’ retirement benefits, which is usually around 16% of the employee’s monthly salary. |
| Medical Insurance | This contribution ensures employees receive medical care and services when needed.
Employers contribute approximately 10.5% of the employee’s monthly salary for this benefit. |
| Unemployment Insurance | This provides financial support to employees who lose their jobs, and employers contribute about 0.5% of the employee’s monthly salary. |
| Work Injury Insurance | Covers medical expenses and compensation for employees injured at work.
The contribution rate for employers varies based on the industry but typically ranges from 0.16% to 1.52% of the employee’s monthly salary. |
| House Provident Fund | Employers contribute about 7% of the employee’s monthly salary to the Housing Provident Fund, which can be used for housing-related expenses, such as purchasing a home or paying for rent. |
Our Employer of Record (EOR) service in China can help you design a benefits package tailored to your industry and workforce requirements. We ensure that your benefits offerings are fully compliant with local regulations and meet the expectations of skilled professionals. By partnering with us, you can create a compelling benefits package that strengthens your employment offer and supports both employee well-being and career growth.
Additional perks and benefits
In China’s competitive job market, offering a comprehensive benefits package is crucial for attracting and retaining top talent. Employers typically provide additional benefits such as private health insurance, performance-based bonuses, housing allowances, flexible work arrangements, and opportunities for professional development, along with mandatory contributions to social insurance and housing funds.
These extra perks not only enhance employee satisfaction and productivity but also promote long-term loyalty, helping you build a dedicated and motivated workforce. By offering a well-rounded benefits package, you can strengthen your employment offer and create a supportive environment that encourages both personal and career growth.
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Working Hours and Leave Policies
Standard working hours
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Statutory working hours
China’s statutory working hours are structured to balance work and personal life.
- Standard working hours: The standard working hours are typically 8 hours per day, 5 days a week, totaling 40 hours per week.
- Rest days: Employees are entitled to at least one rest day per week.
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Overtime regulations
Overtime regulations are primarily governed by national labor laws, particularly the Labor Law of the People’s Republic of China and the Labor Contract Law. However, there are some regional variations in how these regulations are implemented or enforced, depending on local policies or interpretations.
Shanghai, in particular, overtime regulations include:
- Overtime is paid at 150% of the regular wage for regular hours and 200% for holidays.
- Employers cannot require employees to work excessive hours, ensuring a work-life balance.
- Employees must agree to work overtime, and employers must document their consent.
- Employees can file complaints if overtime pay is not compensated appropriately.
Leave entitlements
Leave entitlements in China ensure that employees can take time off for various reasons. Employees are entitled to annual leave, sick leave, maternity leave, paternity leave, and public holidays. Understanding these entitlements is crucial for both employers and employees.
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Annual leave:
Employees are entitled to 5 to 15 days of paid annual leave, depending on their length of service.
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Sick leave:
Employees can take sick leave, depending on the duration of their employment.
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Maternity leave:
Female employees are entitled to at least 98 days of maternity leave, with additional benefits in some regions.
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Paternity leave:
Male employees can take up to 15 days of paid paternity leave following the birth of a child.
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Public holiday leave:
Each year, China has 7 public holidays enjoyed by all citizens: New Year, the Spring Festival (Chinese New Year), the Qingming Festival, Labor Day, the Dragon Boat Festival, the Mid-Autumn Festival, and National Day. The Spring Festival is the biggest holiday in China. There are also holidays for certain groups of people which are Women’s Day , Youth Day, Children’s Day, Army Day.
In China, detailed local laws govern employee leave entitlements, making strict compliance essential for your business. At AYP, we manage leave entitlements accurately and in full compliance with China’s regulations. Let us manage the complexities of local compliance, so you can concentrate on growing your core business.
Visa and Work Permits
Employment visas
Employment visas in China are crucial for foreign workers seeking job opportunities. These visas ensure compliance with local regulations and enable foreign professionals to contribute to the economy.
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Z Visa (Work Visa)
The Z visa is specifically designed for foreign nationals who intend to work in China. Applicants must have a job offer from a Chinese employer and obtain a work permit before applying for this visa, which allows them to reside and work legally in the country.
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R Visa (Talent Visa)
The R visa is intended for highly skilled individuals or experts in specific fields, such as technology, science, or education. This visa provides a streamlined application process and longer validity periods, reflecting China’s effort to attract top talent to support its economic development.
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Residence Permit for Work
Z Visa holders must convert their visa into a residence permit at the local Public Security Bureau (PSB). The residence permit is usually valid for the length of the employment contract, up to a maximum of one year, and may be renewed.
Business visas
Business visas facilitate travel for foreign professionals engaged in business activities in China. These visas are essential for attending meetings, conferences, and negotiations.
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M Visa (Business Visa)
The M visa is designed for foreign nationals travelling to China for commercial and trade-related activities, such as attending meetings, conferences, or negotiating contracts. This visa typically allows for short-term stays and is suitable for individuals who do not intend to engage in long-term employment.
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F Visa (Non-Commercial Visit Visa)
The F visa is intended for individuals visiting China for non-commercial purposes, such as cultural exchanges, study tours, or short-term business trips. While it does not permit long-term work, it allows for activities related to business exploration or collaboration.
Other relevant visa types
In addition to employment and business visas, other relevant visas may be required for various purposes.
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Q1 Visa (Family Reunion Visa)
The Q1 visa is for foreign nationals visiting family members who are Chinese citizens or permanent residents. This visa allows for long-term stays and is typically valid for family reunification purposes.
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Q2 Visa (Family Reunion Visa – Short-Term)
Similar to the Q1 visa, the Q2 visa is for short-term family visits to Chinese citizens or permanent residents. It allows stays of up to 120 days.
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S1 Visa (Family Visa for Foreigners Working in China)
The S1 visa is for family members of foreigners working in China and allows them to stay for longer periods. It requires a residence permit for long-term stays.
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S2 Visa (Family Visa – Short-Term)
The S2 visa is for family members of foreigners working in China who wish to visit for a short period. It typically allows stays of up to 180 days.
Navigating China ‘s employment visa and work permit regulations can be challenging due to strict rules and detailed requirements. Our Employer of Record (EOR) service simplifies the visa application process, ensuring full compliance with China ’s immigration laws. We handle everything from documentation to approvals, allowing you to onboard international talent quickly and seamlessly without the usual complications. Avoid the stress and potential delays—partner with us to ensure a smooth, compliant visa process.
Termination and Offboarding Procedure
In China, the employment termination process is highly regulated, and companies must follow specific legal procedures. Unlike some other countries, the ‘at will’ employment policy does not apply in China, making it crucial for employers to be fully aware of the termination rules and regulations. Non-compliance can lead to severe consequences, including penalties, mandatory employee payments, and even employee reinstatement.
Employers must provide legitimate reasons for any termination. This includes offering a reasonable notice period and appropriate compensation to the affected employee.
There are three types of termination notices in China:
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With Cause
When the employee has committed a serious violation or breach of company policy.
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Without Cause
When the termination is not due to any fault of the employee.
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Fixed-Term Employment Contract
When the contract ends upon reaching the agreed term.
The standard notice period for terminating an employee is 30 days. However, if the termination occurs during the employee’s probation period, only a 3-day notice is required.
Proper offboarding is essential to ensure compliance which include ensuring all outstanding wages, bonuses, and benefits are paid according to legal requirements. By strictly adhering to these regulations, companies can minimize legal risks and ensure a smoother termination process.
Offboarding and termination in China require careful attention to local labor laws. AYP’s Employer of Record (EOR) services simplify these processes, ensuring smooth transitions and full compliance with China’s regulations. Let us take care of the legal intricacies so you can focus on your business.
Advantages of Using Employer of Record through AYP
Partnering with AYP’s Employer of Record (EOR) in China provides distinct advantages in managing the country’s intricate employment landscape. Our comprehensive service manages payroll, benefits, and tax compliance, alleviating the complexities and risks associated with direct hiring.
With AYP’s deep expertise in Chinese labor laws, your company can confidently navigate legal obligations related to employment contracts, termination procedures, and workplace regulations. This proactive approach reduces administrative burdens and shields you from potential legal disputes and compliance issues.
By entrusting AYP with these critical functions, you can focus on growing your business and achieving your strategic objectives. Let AYP be your trusted partner for a seamless and compliant employment experience in China.
Contact us today, and allow our experts to handle the complexities of employment on your behalf.
FAQs
What is Employer of Record China?
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What is the process of hiring EOR employees in China?
AYP’s onboarding process for employees in China includes:
- Conducting a thorough analysis of the client’s requirements
- Performing a cost simulation for employee hiring
- Assisting with obtaining necessary work permits
- Preparing employment contracts that comply with local regulations
- Enrolling employees in benefits programs
- Sending a welcome email to new hires
Hire compliantly in the China with no hidden cost
Local labor compliance, payroll management, onboarding, and expert advisory — all in one service