Overview

Capital
Currency
Yuan
Date Format
Yyyy-Mm-Dd

Taxes

Employer
16.00% - Pension
0.50% - Unemployment
0.16% - 1.52% - Work related injury
1.00% - Maternity
9.50% - Medical
Employee
8.00% - Pension
0.50% - Unemployment
2.00% - Medical

Minimum Wage

General

From April 1 2018, 2,420 CNY (382 USD) monthly.

Working Hours

General

Full time is considered 40 hours weekly.

Overtime

Overtime is paid ate a rate of 150% on regular workdays, 200% on rest days, and 300% on offical holidays.

VAT

General

Standard rate VAT is 16%

Mandatory Benefits

Pension Fund

Employer contributes 20% of the employee’s wages. Employee contributes 8% of regular wages. The salary ceiling for contributions is CNY 19,389.

Social Security

Employer contributes 39.66% of workers wages, and employees contribute 10.5% of thier salary. Disabled fund, paid once a year, increases from 78.61 CNY to approximately 312.12 CNY. The tax base of social security changes every year in July, expect adjustments in the total payment of social security (for items other than disabled fund).

Payroll

Payroll Cycle

Salaries are paid monthly with some companies paying in 13 instalments. Paydays are between the 10th to the 20th of the following month.

Termination

Termination Process

There are two types of termination procedures in China - termination upon expiration and early termination. 1. Termination upon expiration: employers may choose not to renew the employment contract after expiration. In this case, the employees are entitled to severance payment. In accordance with the Chinese Labor Code, employees can request an open-ended employment contract after the expiration of the second fixed-term contract and employer must accept it. However, it is common practice among the employers in Shanghai to offer a fixed-term contract after the expiration of the second fix term contract as long as the employee agrees. 2. Early termination through mutual agreement, allowing both parties to decide the date of termination and the amount of severance payment that the employee will receive. If the employer and employee could not reach a mutual agreement, then it is a unilateral termination. To terminate the contract unilaterally the employer must clearly prove the cause that is stated in the Labor Code.

Advance Notice

Employees must provide 30 days notice before terminating their contract.

Severance Pay

Severance payments are paid at one-month salary for each year the employee worked with the company.