China Payroll
Complete Guide of China Social Security

Complete Guide of China Social Security

In China, owning a business does not automatically permit you to hire employees. Every employer in China must follow a set of rules and regulations when hiring local or foreign workers. Certain obligations must be done and affirmed for employee welfare if you hire staff in China.

China Payroll helps big and small business owners to understand updated pension insurance, medical insurance, unemployment insurance, and other social security contribution items in 1st and 2nd tier cities in China.

Other tier 1 and 2 cities

Changsha Chengdu
Chongqing Dongguan
Foshan Nanjing
Taiyuan Tianjin
Wenzhou Xi’an

There are five mandated insurance schemes (pension fund, medical insurance, industrial injury insurance, unemployment insurance, and maternity insurance) as well as a housing fund (only applicable to Chinese employees).

Pension Insurance

After retirement, an individual can get a pension based on the amount accumulated in his or her individual fund.

Individuals must generally contribute for at least 15 years before getting a pension in China. Men are 55 years old, women are 50 years old (blue-collar labor), men are 60 years old, and women are 55 years old in some industries (white-collar work). The quantity of retirement benefits is determined by municipal laws. These ages may soon alter due to China’s population difficulties.

Medical Insurance

In the event of illness or non-occupational harm, medical insurance may cover a portion of the treatment costs.

In China, both the company and the employees are required to pay medical insurance on a monthly basis. Medical expenses will be reimbursed to designated hospitals by the medical insurance fund. The patient will no longer be required to pay for treatment upfront and then wait for reimbursement. Only therapy accepted and managed by government-approved hospitals and clinics (excluding “foreign clinics”) is covered by medical insurance.

Maternity Insurance

This insurance reimburses the employee while she is on maternity leave.

In China, only employers are required to pay maternity insurance on a monthly basis. During maternity leave, insurance funds will make monthly payouts to women based on their average income. This means that if she works for a company where other women make more than she does, she will be able to earn more money while on maternity leave. The female employee’s employer must pay three months’ worth of monthly wages, and related medical treatments must adhere to China’s family planning policy. Male employees may be eligible for benefits in some instances.

Unemployment Insurance

Unemployment compensation are available in China for a maximum of 24 months if an employee is laid off.

In China, employers are required to pay into the unemployment insurance fund. Employees in certain areas, on the other hand, are just compelled to increase their monthly contributions. If an unemployed person makes more than 12 months of donations, they are entitled to unemployment compensation for up to 12 to 24 months (depending on the conditions).

Work-related Injury Insurance

In China, if an industrial injury or disease occurs, the work-related injury fund pays the expense of treatment. Employees will also be compensated if they work in particular weather conditions.

Only employers must pay work-related injury insurance on a monthly basis. In some jurisdictions, the needed monthly amount varies depending on the industry. Occupational diseases and injuries are frequently covered by insurance. The therapy will be covered by the work injury insurance fund. Individuals will still be paid a portion of their salaries, but it will be less than full wages. Even if the company does not contribute the required amount, the individual can still seek treatment and pay for it through the insurance fund. The fund manager will then be responsible for tracking down the employer in order to receive full reimbursement.

Housing Fund

Housing funds are provided by companies and employees in China to ensure that employees save for housing, which is generally done through social insurance. According to the Housing Fund Management Regulations (Housing Provident Fund Management Regulations), the rate of employee and employer contributions in the country is determined by the local government and must not be less than 5% of the company’s average wage. In Beijing, for example, both the employer and the employee contribute 12 percent. In Shanghai, both the employer and employee contribution rates are 7%.

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