Social Security Contributions in China

Employers hiring in China will find a fairly complex social security system with many different contribution rates that vary between cities and regions. 

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Employers hiring in China will find a fairly complex social security system with many different contribution rates that vary between cities and regions. Companies that are used to a standard national system of contribution rates may find it difficult to adjust to all of the calculations required.

The contribution rates for employers can be high, so foreign employers will need detailed information and guidance prior to hiring to assess the overall cost of compensation.

What does China’s social security system include?

China’s social security system covers five different types of benefits and a housing fund.  Employees do not contribute to all of these, and rates vary between regions so the rates listed are a range of percentages applied depending on work location.

  • Pension: Employee retirement fund

Employer rate: 14-16%        Employee rate: 8%

  • Medical: Reimburses medical expenses at approved hospitals

Employer rate: 10%              Employee rate: 2%

  • Unemployment: Up to 12-24 months of benefits in case of redundancy

Employer rate: .5-.8%           Employee rate: .2-.5%

  • Maternity: Insurance to cover wages during maternity leave

Employer rate: .8-1%           Employee rate: 0

  • Work-related Injury: Cost of treatment for occupational injury

Employer rate: .14-1.9%      Employee rate: 0

  • Housing fund (residents only): Savings for house purchase

Employer rate: 5-12%          Employee Rate: 5-12%

This is a generous list of social benefits and explains why the employer’s contribution rate can be almost 30% of salary.  Foreign employers may be shocked at this amount, for example if they are based in the US where the employer's social security contribution is only 7.5%...read more

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Tim Burgess

Director, Shield GEO Services Ltd

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