Mercans CountryIntel ® China Payroll And HR Insights
China is an advanced digital economy and a complex market. The regulatory environment may be subject to change and requires resources to stay up to date on what is required for your market segment and to ensure your business entry strategy is a good fit. That said, there are now more eCommerce consumers in China than in Europe and the US combined.Download PDF
As a unique marketplace, businesses that are considering making a market entry should obtain advice from diverse sources including local connections. The national and regional level industry policies should also be considered. There are a number of government, business and trade resources to access to assist a business considering this market.
Entity Registration and Incorporation Requirements
Setting up a new business or expanding an existing one in China is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.
Banks are open from Monday to Friday 9 am to 5 pm.
The standard working week is 40 hours per week usually worked from Monday to Friday
China’s labor laws stipulate that a standard work day is eight hours long with a maximum of 44 hours per week. Work beyond that requires extra pay for overtime. But this is not well enforced with the gruelling 996 culture (where people work 9 AM to 9 PM six days a week) carrying on. This has led to a move towards better labour protection as attitudes of young Chinese change.
Mining and ore processing, iron and steel, aluminium, coal, machinery, armaments, textiles and apparel
Dates & Numbers
Official State Name
People's Republic of China
International Dialing Code
In China, there is a wide range of social insurances which provide employees with benefits and these are deductions from pay that need to sit alongside income tax. For large enterprise companies who process global payroll, it is important to note that it is still the employer’s responsibility to ensure all obligations are met and that tax and social security are processed accurately.
It is acceptable to provide employees with online pay slips
Payroll reports must be kept for five years
5 -15 days
Between 3 - 24 months and for which it the leave must be paid no lower than 80% of the salary
98 days of paid maternity leave and 15 days of paid paternity leave
Maternity & Paternity Leave
On provision of 30 days’ prior notice
A 13th or 14th salary is paid at the end of the lunar year as per Chinese custom
10.60 - 21.00 RMB per hour
Not exceeding three hours more than the average work hour. In addition, the overtime rate is 1.5 times the normal rate
First 5 years: 21 days of basic salary. 5 years and above: 30 days of basic salary
Residents are generally subject to individual income tax (IIT) on their worldwide income. Non-residents are generally taxed in China on their China-source income only. Social security contributions to pension funds, medical funds etc are mandatory for Chinese employees.
There are nine categories of income, that is, employment income (wages and salaries); remuneration for labour services; author’s remuneration; royalties; business income; interest dividends and profit distribution; rental income; income from transfer of property; and incidental income.
Corporate Income Tax
Personal Income Tax
Foreign individuals who hold a China work permit for working in China are required to make social security contributions according to China Social Security Law. Rates and applicable caps are subject to local rules.
Social Security Rate
Social Security Rate for Employers
Social Security Rate for Employees
Employment law and regulations in China are derived from multiple sources including the Chinese Constitution, national laws, administrative laws, regulations enacted by the MOHRSS (Ministry of Human Resources and Social Security). Generally, there are strong obligations placed on employers to protect employees.
Generally, a written employment contract contains the terms which determine whether a worker is in an employment relationship. Where no written contract exists, the situation will be reviewed including whether the employer meets qualification requirements, whether the worker is engaged in paid services and the services are integral to the employers’s business.
There are generally three types of working hours systems, namely, standard working hours systems, comprehensively calculated working hours and flexible working hours. There are no special rules applicable to the working hours for part time employees.
Employees are entitled to public holidays with full pay. Employees who work continuously for over 12 months are entitled to statutory paid annual leave.
Under national laws and regulations (there are exceptions to this), the employer is not obligated
30 days prior notice
Minimum notice period for terminating an employee
Total number of public holidays
Working hours per week
Total number of days for Compassionate & Bereavement Leave
China has increasingly become a destination for migrants all over the world. To respond to an increasingly mobile population, China has strengthened its migration governance.
The residence permit is proof that a foreigner resides in China. Applications for the foreign residence permit need to be submitted to the local Public Security Bureau’s Exit-Entry Administration within 30 days of an individual’s date of entry. There are different permits that cater to specific work types, student status, foreign journalists, family reunions and private businesses.
Work Permit validity
Possess the professional skills and work required by their job
Have no criminal record
Have confirmed employment with an employer in China
Holds a valid passport or passport substitute
Holds an appropriate work visa
Build the best team and hire top talent compliantly in China. Get in touch with China payroll outsourcing & PEO specialists for a free consultation!