Employer of Record and Payroll Services in China 
Mercans-owned legal entity
We have our own legal entity to protect your business from risk and provide you and your employees with a distinctive experience.
We have our own legal entity to protect your business from risk and provide you and your employees with a distinctive experience.
Services available
- Employer of record
- Contractor management
- Global payroll
- In-country payroll
Mercans offers complete payroll, PEO and HR services in China
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
Doing Business in China
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.
Banking
Banks are open from Monday to Friday 9 am to 5 pm.
Working Week
The standard working week is 40 hours per week usually worked from Monday to Friday
Labor Law
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.
Download PDF
Main Industries
Mining and ore processing, iron and steel, aluminium, coal, machinery, armaments, textiles and apparel
GDP Growth
4.90%
Dates & Numbers
yyyy-mm-dd
Official State Name
People's Republic of China
Population
1.402 billion
Capital
Beijing
Major Languages
Mandarin
Currency
Renminbi
Internet Domain
.cn
International Dialing Code
+86
-2°C
Payroll
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
Payslip
Payroll reports must be kept for five years
Reports
5 -15 days
Annual Leave
Between 3 - 24 months and for which it the leave must be paid no lower than 80% of the salary
Sick Leave
98 days of paid maternity leave and 15 days of paid paternity leave
Maternity & Paternity Leave
On provision of 30 days’ prior notice
Employee Termination
A 13th or 14th salary is paid at the end of the lunar year as per Chinese custom
13th Salary
10.60 - 21.00 RMB per hour
Minimum Wage
Not exceeding three hours more than the average work hour. In addition, the overtime rate is 1.5 times the normal rate
Overtime
First 5 years: 21 days of basic salary. 5 years and above: 30 days of basic salary
Severance Pay
Tax and Social Security
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.
Tax
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
Sales Tax
VAT
Social Security
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
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.
Employment Agreement
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.
Working condition
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.
Leaves
Employees are entitled to public holidays with full pay. Employees who work continuously for over 12 months are entitled to statutory paid annual leave.
Employment termination
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
7 Days
Total number of public holidays
40-42
Working hours per week
1-3 days
Total number of days for Compassionate & Bereavement Leave
Immigration
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.
Residency Permits
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
One year
Required Documents
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!
Download PDF