payroll-guides
Published on 05 Apr 2023
OS HRS takes care of your multi-country payroll with local regulatory expertise. From China, across Asia Pacific and beyond, we are the payroll partner of global leaders. Not sure where to start when it comes to multi-country payroll? Here’s our quick payroll guide for your China business operations.
Currency | CNY |
Payroll cycle | Monthly |
Employer taxes | 3% - 45% depending on income level |
Minimum wage | 1,540 CNY to 2,690 CNY per month, varies across different regions |
Working hours | 40 hours per week, maximum 44 hours per week, with overtime paid for additional hours (maximum 36 hours per month) |
Payroll in China involves a number of compliance requirements, including the calculation and withholding of taxes, social security contributions, and other deductions. Here are the steps to set up payroll in China:
Obtain a Business License: The first step in setting up payroll in China is to obtain a business license from the State Administration for Industry and Commerce (SAIC). This license is required for all businesses operating in China.
Register for a Taxpayer Identification Number (TIN): All businesses in China need a Taxpayer Identification Number (TIN), which is issued by the State Administration of Taxation (SAT). As an employer, you need to register for a TIN as well.
Decide on Payroll Frequency: The next step is to decide on the frequency of payroll processing. In China, payroll is typically processed on a monthly basis.
Collect Employee Information: To set up payroll, you need to collect employee information, such as name, address, national ID number, bank account details, and salary structure.
Calculate Salary and Deductions: Once you have collected employee information, you need to calculate salaries and deductions based on the salary structure. Deductions can include income tax, social insurance, and housing fund contributions.
Register for Social Insurance and Housing Fund: Social insurance and housing fund are mandatory in China, and as an employer, you are required to contribute a percentage of your employees' salaries to these funds. You need to register for these funds and make regular contributions on behalf of your employees.
Generate Payslips and Bank Transfer: After calculating salaries and deductions, you need to generate payslips for employees and transfer their salaries to their bank accounts.
File Monthly Returns: Finally, you need to file monthly returns with the SAT and local social insurance and housing fund authorities. These returns report the tax and other deductions made from employee salaries.
It is important to note that setting up payroll in China can be complex, and it is recommended to seek professional advice or engage a payroll outsourcing company like OS HRS to ensure compliance with local regulations.
What do you as an employer need to make in employer contributions?
Employer contributions vary by state in China, we share the contributions required in Beijing below:
16.00% | Employer Pension Note: maximum monthly salary base of 35,283 CNY |
9.80% | Employer Medical Insurance Note: maximum monthly salary base of 35,283 CNY |
0.50% | Employer Unemployment Insurance Note: maximum monthly salary base of 35,283 CNY |
0.20% to 0.60% | Employer Work-related Injury Insurance Note: dependent upon type of work being carried out, maximum monthly salary base of 35,283 CNY |
0.80% | Employer Maternity Insurance Note: maximum monthly salary base of 35,283 CNY |
5.00% to 12.00% | Housing Fund Note: In some cities an excess of 12% is allowed |
32.30% – 39.70% | Total Employer Contributions |
What do you as an employee need to make in employee contributions?
Employee contributions vary by state in China, we share the contributions required in Beijing below:
8.00% | Pension |
2.00% + 3 CNY | Medical Insurance |
0.50% | Unemployment Insurance |
5.00% to 12.00% | Housing Fund (In some cities excess of 12% is allowed) |
15.50% to 22.50% | Total Employee Contributions |
What are the income tax rates in China?
Annual Taxable Income | Tax Rate | Quick Deduction |
Up to 36,000 CNY | 3.00% | 0 |
36,001 – 144,000 CNY | 10.00% | 2,520 CNY |
144,001 – 300,000 CNY | 20.00% | 16,920 CNY |
300,001 – 420,000 CNY | 25.00% | 31,920 CNY |
420,001 – 660,000 CNY | 30.00% | 52,920 CNY |
660,001 – 960,000 CNY | 35.00% | 85,920 CNY |
960,001 CNY and above | 45.00% | 181,920 CNY |
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Last updated August 2024
