China is the world’s most populous country located in Southeast Asia. It spans 5 time zones and borders 14 countries, and has the world's largest economy by GDP. China is currently the world’s #1 manufacturer and exporter and has the fastest-growing major economy.

Types of Contracts

• Fixed Term - can be renewed 2 times
• Indefinite
• Part-time contracts can not be more than 4 hours per day / 20 hours per week.

Job Title Restrictions

It’s not possible to hire employees under C-level job titles (CEO, CFO etc.), or the General Manager title under the Employer of Record (EOR) model.

Working Hours

The statutory maximum working hours are 8 hours per day, 40 hours per week.

Overtime

Overtime should be paid at the following rates for working outside of normal working hours:

• Weekdays: an additional 50%
• Weekends or rest days, if no time off is given instead: an additional 100%, or additional rest day
• Public holidays: an additional 200%

Minimum Wage

The minimum wage in China is different for each region, but hovers around CNY 2,590 per month.

Probation Period

Probation periods are not mandatory in China, with maximum lengths ranging from 1 to 6 months, depending on the contract length:

• 3 years / Indefinite Contracts: 6 months
• 2 years: 2 months
• 1 year: 1 month

During probation, employees should be paid 80% of their salary at a minimum; in practice, most companies pay 100%.

Taxes & Local Employment Costs

Taxation in China is very complex and varies according to province, city, type of income, and employee personal circumstances.

Employee Taxes & Contributions

Employees pay Income Tax according to different income types; see here for more information including tax bands and percentages.

Additionally, employees contribute to the following social securities, whose values vary by province and city:

• Pension
• Medical Insurance
• Maternity Insurance
• Unemployment Insurance
• Housing Fund

Employer Taxes & Contributions

Employers are required to pay towards the following social security areas, the values of which vary by province and city:

• Pension
• Medical Insurance
• Maternity Insurance
• Unemployment Insurance
• Housing Fund

In addition, employers may be required to pay towards the following for compliance purposes:

• Disability Fund
• Employer Liability Insurance
• Union Fee

Annual Leave

Employees are entitled to a minimum number of annual leave days, based on their accumulated working years with all employers:

• 0 to 1 years: 0 days (though in practice, most employers give an entitlement in the first year)
• 1 to 10 years: 5 days
• 10 to 20 years: 10 days
• 20+ years: 15 days

Sick Leave

Employees who need to take sick leave should obtain a Certificate of Sickness from the medical organization of the employers or appointed hospitals. The medical practitioner issuing the certificate will recommend a duration of leave for treatment, with the following maximums based on length of service for severe illnesses:

• 0 to 1 years: up to 3 months
• 1 to 21 years: up to 3 months + 1 month per year of service (max of 24 months)
• Above 21 years: up to 24 months

The amount of pay the employee receives during sick leave is subject to the following:

• Length of service
• Length of sick leave
• Average monthly salary for the prior year in the employee’s working city
• Minimum wage in the employee’s working city
• Employee’s Social Security & housing contributions

The pay ranges from 60-100% of the employee’s salary, capped by the sum of the city’s minimum wage and the employee’s social security & housing contributions.

Maternity Leave

The statutory entitlement to maternity varies on a per-city basis. The national minimum maternity leave in China is 98 days, but additional entitlements are granted by the majority of cities and provinces, ranging from a total of 98 days to 1 year.

For example, Shanghai employees are entitled to 158 days of maternity leave.

Employee compensation while on maternity leave varies by city, mainly following one of the 2 examples below:

1. Beijing: Employees are entitled to have their standard salary paid by their employers, who apply to the local government for the maternity subsidy, which covers a portion of the salary.
2. Shanghai: Employees apply directly to the local government for the maternity subsidy. However, the employer should pay the difference between the subsidy amount and the employee’s salary, as it is often higher than the subsidy amount.

Employees who are late in their pregnancy are eligible for an additional 30 days of late pregnancy leave in addition to the state-mandated maternity leave. Spouses are entitled to three days of late pregnancy paternity leave.

Paternity Leave

There are no national regulations governing paternity leave in China. However, some cities and provinces entitle employees to paternity leave, ranging from 10 to 30 days in length.

Wedding/Marriage Leave

Employees who have recently married in China are eligible for compensated marriage leave.

The number of days varies based on the city, ranging from a minimum up 3 days, up to 30 days in some cities for late marriages.

To be entitled to the leave, employees must meet the following criteria:

• Men over 22 years old, or women over 20 years old
• Late marriage is defined as a man’s first marriage when he is at least 25 years old, or a woman’s first marriage when she is at least 23 years old

Bereavement Leave

Employees are entitled to 1 to 3 days of bereavement leave when their parent, spouse or child dies; in practice, employers are generally expected to provide the full 3 days.

Additionally, some local city policies (e.g. Shanghai) entitle employees to bereavement leave when their parent-in-law dies.

Public Holidays

There are 8 public holidays in 2023; see here for a complete list of Chinese public holidays.

Employees are fully paid during public holidays; if the employer requires them to work, employees should be paid 300% of their standard daily wage.

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Benefits

Summary

Employers in China can typically offer the following benefits:

• Private Medical Insurance
• Medical Check
• Employee gifts (traditional gifts, cakes etc. given on special occasions such as birthdays and festivals)

Notice Period

During probation, the notice period is 3 days. After probation, the notice period is 30 days. Payment in lieu of notice is possible.

Statutory Payments

Employees in China whose employment is terminated are entitled to a severance payment of one month’s salary per year of service. For any incomplete years, the first 6 months count for half a month’s salary, and between 6 and 12 months count as a full year (1 month’s salary).

Severance pay is capped at 3 times the local average monthly salary for the employer’s location and at 12 years of service (12 months of pay)

If an employer is found to have wrongfully terminated an employee, the maximum possible severance payment increases to 2 month’s salary per year of service. If an employee is terminated, the employer must pay out any unused leave in the employee’s final salary.

If an employee resigns, any unused leave will not be paid out.

It’s customary to pay a 13th-month and sometimes also 14th-month salary in China, paid out during the time of the Lunar New Year or Spring Holiday. While it is not legally required, it will commonly be stipulated in the employment contract.