Employer Payroll Tax
Employee Payroll Taxes
Minimum wage varies depending on the region. The highest minimum wage is in Shanghai at 2,480 CNY per month. This is roughly the double of the minimum salary paid in such provinces as Hunan, Hubei, and Liaoning. The minimum salary in such fourth-tier cities as Loudi is only 1,220 CNY.
Paydays are between the 10th to the 20th of the following month.
The standard workweek in China is 40 hours. Employees work 8 hours per day and 5 days per week.
Overtime is paid ate a rate of 150% on regular workdays, 200% on rest days, and 300% on offical holidays.
Social security is comprised of pension, medical insurance, unemployment, maternity, workplace injury, housing fund, and disability fund.
Employer contributes 40% of workers wages (capped at 24,633 CNY), and employees contribute approximately 10.5% of their salary.
Disabled fund is paid once a year. Companies whose workforce does not exceed 1.5% of employees with disabilities must pay approximately 1.5% of the social insurance tax base to the disability fund.
Employer contributes 20% of the employee’s wages. Employee contributes 8% of regular wages. The salary ceiling for contributions is CNY 19,389.
A female employee giving birth is entitled to 98 days of maternity leave. She can take up to 15 days out of 98 (14 weeks) as a prenatal period. If the employee experiences dystocia, she is given 15 more days after she has been dismissed from a hospital. In the case of multiple birth, the mother receives additional 15 days for every baby.
There is no statutory laws regarding paternity leave, however, there are regional regulations that provide paternity leave from 7-30 days. In Beijing, paternity leave averages 15 days, while in Shanghai, the average is 10 days.
Family Planning Leave:
Employees who have difficulty conceiving and need medical procedures to be impregnated are entitled to up to 30 days of family planning leave, depending on a doctor’s recommendation.
Family Visit Leave:
Employees are entitled to family visit leave, if their parents or spouse do not live together with them. The employee can take up to 30 days a year to visit a spouse. Up to 20 days a year are given to employees to visit their parents, provided they are single. Married employees receive up to 20 days per 4 years to visit their mothers and fathers.
Bereavement leave: When a member of the employee’s immediate family – parent, spouse, or child – passes away, the employer is entitled to 1-3 days of bereavement leave. During this leave, employees receive their regular daily payment.
Work related injury leave: Employees are entitled to up to 12 months of 100% paid work related injury leave, paid by the employee and social insurance will assist in paying for any medical treatment required. In some cases, this type of leave may be extended for an additional 12 months.
In China, it is difficult to terminate an employment contract unless by mutual agreement or if an employment contract expires.
Advance notice is 30 days for both the employee and employer.
In most cases, dismissed employees are entitled to severance payment.
Severance pay amount depends on the years of service of the employee in the company. The standard is one month of wages for one full year of service and is capped at 12 months of severance pay.
Standard rate VAT is 16%