Monday, 15 June 2015

Employment information in China

Employment information in China

·    Paid Annual Leave

Years served in the company
Days of annual leave
1 full year, less than 10 years
5 days
10 full years, less than 20 years
10 days
>20 years
15 days
Statutory national holidays and rest days are not included in annual leave.

·    Rest Days
The employer must ensure that its workers have at least one day off a week with a maximum of 44 working hours per week.

·    Sickness Allowance
Sick leave is required to be paid for all employees. Sick leave is paid at 60-100% of daily wages, depending on the seniority of the employee.

          ·    Severance Payment
An employee shall be given compensation based on the number of years he has worked for the employer and at the rate of one month's wage for each full year he worked and for no more than 12 years of his work.
         ·      Termination
An employee may dissolve the labour contract if he notifies the employer in writing 30 days in advance. During the probation period, an employee may dissolve the labour contract if he notifies the employer 3 days in advance.

·    Minimum Wage
Regulations on the Minimum Required Wage are set by each provincial government. Foreign employers are expected to pay much more than the minimum, roughly double the minimum or more.

·    Social Security Insurance
Each agency must provide the five benefits legally required, at the rates set by the local or provincial government. All foreign employees who work in China for longer than six months must be included in the social security system as well.

The legally required benefits are 1) retirement pension, 2) medical fund, 3) unemployment insurance, 4) disability insurance, 5) maternity fund.

For salaries higher than RMB 11,688, the social securities figure is 47% x RMB 11,688.

For salaries lower than RMB 11,688, the social securities figure is 47% x Actual Salary.

·    Salaries Tax
Local employees are taxed on the basis of the balance of their monthly income after deducting their social benefits contribution, a standard deduction of RMB 3,500, and then applying the progressive tax rate.

Foreign Employees:
(i) foreigners that have lived in China for less than 90 days (183 days for citizens of countries that have signed a treaty on the avoidance of double taxation with China) will have to pay Individual Income Tax.

(ii) foreigners that lived in China for more than 90 days (183 days) but less than a year: income for work in China from all sources is taxable. However, for senior executives, they are liable for their full income derived from Chinese sources from the first day in the country.

Through our China WFOE (offices in Shanghai, Beijing and Guangzhou), Primasia provides one-stop China set-up and supporting services, including payroll, tax, accounting and licence renewal. If you need further assistance, please contact US


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