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China is located on the China Sea, which is part of the Pacific Ocean, between North Korea and Vietnam. China is considered a developing country, but is one of the world’s top two economies, seeing sustained growth due to export relations, its manufacturing sector, and low-wage workers. China has a labor force of 781 million people.
Employment contracts in China must be in writing. Employers may use fixed-term or indefinite-term contracts. If an employee agrees to renew an employment contract and has at least 10 years of service, the contract will be indefinite unless the employee specifically agrees to a fixed term contract. A contract will be deemed an indefinite term contract if the employer fails to sign the contract within one year of the employee’s start date.
Standard working hours within China are 8 hours per day, 40 hours per week, up to a maximum number of 45 working hours per week.
Overtime
All work above the standard weekly working hours is paid as overtime and regulated by employment contract/collective agreements. In general, no more than one hour of overtime a day is permitted except in exceptional circumstances. Overtime can increase to 3 hours a day with a maximum for the month of 36 hours.
Overtime is paid at 150.00% of the standard salary rate for weekday work, increasing to 200.00% for weekends and 300% salary on public holidays. This applies to all roles including management level.
Maternity Leave
Female employees are entitled to basic Maternity leave of 98 days, which can be taken from 15 days prior to the expected date of childbirth. Each individual province also has entitlement to extended maternity leave, up to a total maternity leave period of:
Chongqing, Guangdong – 178 days
Tianjin – 128 days
Henan, Hainan – 190 days
Jiangxi, Hebei (for the third child), Zhejiang (for the third child) – 188 days
Gansu, Heilongjiang, Fujian – 180 days
Guangxi – 148 days
Jiangsu – 128 days:
Other regions (including Beijing) – 158 days
The calculation of the maternity payment is made by the Social Security Bureau (where the employee is registered) and is typically based on the average monthly salary across the year preceding the due date, or 3x the minimum wage, whichever is greater. However, calculation of basic and extended maternity leave can vary per province regulations.
Additional leave entitlement is also in place as follows:
Prenatal examination includes doctor visits during the first 12 weeks.
Difficult delivery – leave days of natural delivery + 15 days
Multiple deliveries – leave days of natural delivery + 15 days + 15 days extra per baby
Prenatal leave: After 7th month of pregnancy can avail 1-hour day break. May also avail 2.5 months prenatal leave upon employer approval.
Breastfeeding leave: For a child less than a year old, female employees may have up to two feeding periods per day (30 minutes per baby). Travel time for the same period shall be counted as working time. Alternatively, after childbirth, female employees may also apply for leave of 6.5 months upon employer approval. With maternity insurance (a part of Social Security Insurance), the employee is compensated with an allowance rather than her normal salary during maternity leave.
Abortion or Miscarriage within first 4 months – 15 days
Abortion or Miscarriage after first 4 months – 42 days
Termination of workers during pregnancy and within 1 year from Childbirth, is not permitted.
Paternity Leave
Male employees requesting paternity leave are, in the plurality of regions, entitled to 15 days. However, this may vary by location. The following are the cities that do not follow the 15-day norm:
Tianjin, Shandong – 7 days
Shanghai – 10 days
Liaoning, Chongqing, Sichuan, Hunan – 20 days
Ningxia, Guangxi, Inner Mongolia – 25 days
He’nan, Jiangxi, Anhui, Yunnan, Gansu – 30 days:
Parental Leave
Parents are entitled to paid Childcare leave, the length of which is determined by each individual province as follows:
Beijing & Shanghai: 5 days’ childcare leave each year until their child reaches three years old.
Fujian, Guangxi, Inner Mongolia, Heilongjiang, Liaoning, Hebei, Jiangxi, Jiangsu, Sichuan, Guizhou, Zhejiang, Tianjin, Ningxia, Henan, Hubei, Hunan, Hainan, Xinjiang, Shandong, and Guangdong: 10 days leave each year for couples with children under the age of three years old.
Anhui: 10 days leave per parent each year until their child is six years old.
Yunnan: 10 days leave per year can be taken by either parent who has children under the age of three years old. An additional 5 days of leave can be taken per year by parents who have more than two children under the age of three years old.
Shanxi, Qinghai & Gansu: 15 days leave each year to couples with children under the age of three years old.
Chongqing: Two options on how to use this leave (1) After the Maternity/Paternity leave expires either parent can take childcare leave until the child reaches one year old; or (2) both parents can take 5 to 10 days of leave each year until the child reaches six years old.
In China, In the event of the death of an immediate family member, an employee is entitled to up to three days’ leave, depending on the employment contract and region.
In the event of an employee’s marriage, an employee is entitled to between three and ten days’ leave, depending on the employment contract and region.
China provides basic health and pension insurance through the national social security system, but private health insurance may be offered.
Beijing
Beijing:, Employer Payroll Contributions,
16.00%, Employer Pension (maximum monthly salary base, 33,891 CNY)
0.50%, Employer Unemployment Insurance (maximum monthly salary base, 33,891 CNY)
9.80%, Employer Medical Insurance (maximum monthly salary base, 33,891 CNY)
0.20% to 1.90%, Employer Work-related Injury Insurance (dependent upon type of work being carried out) (maximum monthly salary base, 33,891CNY)
5.00%-12.00%, Housing Fund (in some cities excess of 12% is allowed)
31.50% – 40.20%, Total Employer Cost
Beijing:, Employee Payroll Contributions,
8.00%, Pension (maximum monthly salary base, 33,891CNY)
0.50%, Unemployment Insurance (maximum monthly salary base, 33,891CNY)
2.00%, Medical Insurance (maximum monthly salary base, 33,891CNY)
5.00%-12.00%, Housing Fund (in some cities excess of 12% is allowed)
15.50%-22.50%, Total Employee Cost
Shanghai
Shanghai:, Employer Payroll Contributions,
16.00%, Employer Pension (maximum monthly salary base, 36,549 CNY)
0.50%, Employer Unemployment Insurance (maximum monthly salary base, 36,549 CNY)
9.00%, Employer Medical Insurances (maximum monthly salary base, 36,549 CNY)
0.16% to 1.52%, Employer Work-related Injury Insurance (dependent upon type of work being carried out) (maximum monthly salary base, 36,549 CNY)
1.00%, Employer Maternity Insurance (maternity insurance has been merged into medical insurance in many cities (maximum monthly salary base, 36,549 CNY)
5.00%-12.00%, Housing Fund (in some cities excess of 12% is allowed)
31.66% – 40.02%, Total Employer Cost
Shanghai:, Employee Payroll Contributions,
8.00%, Pension (maximum monthly salary base, 36,549 CNY)
0.50%, Unemployment Insurance (maximum monthly salary base, 36,549 CNY)
2.00%, Medical Insurance (maximum monthly salary base, 36,549 CNY)
5.00%-12.00%, Housing Fund (in some cities excess of 12% is allowed)
15.50%-22.5%, Total Employee Cost
Guangzhou
Guangzhou:, Employer Payroll Contributions,
14.00%, Employer Pension (maximum monthly salary base, 26,421 CNY)
0.80%, Employer Unemployment Insurance (maximum monthly salary base, 38,082 CNY)
6.85%, Employer Medical Insurance (maximum monthly salary base, 28,368 CNY)
0.20% to 1.40%, Employer Work-related Injury Insurance (dependent upon type of work being carried out)
5.00%-12.00%, Housing Fund (in some cities excess of 12% is allowed)
26.85% – 35.05%, Total Employer Cost
Guangzhou:, Employee Payroll Contributions,
8.00%, Pension (maximum monthly salary base, 26,421 CNY)
0.20%, Unemployment Insurance (maximum monthly salary base, 38,082CNY)
2.00%, Medical Insurance (maximum monthly salary base, 28,368 CNY)
5.00%- 12.00%, Housing Fund (in some cities excess of 12% is allowed)
15.2%-22.20%, Total Employee Cost
China, Employee Income Tax Rates
3.00%, Up to 36,000 CNY
10.00%, 36,001- 144,000 CNY
20.00%, 144,001- 300,000 CNY
25.00%, 300,001- 420,000 CNY
30.00%, 420,001- 660,000 CNY
35.00%, 660,001- 960,000 CNY
45.00%, 960,001 CNY and above
Private Pension Reform
The pilot phase of the new private pension scheme was officially launched in November 2022 in 36 cities and is initially set to last a year before being implemented at a wider scale. The first batch of eligible cities include Beijing, Shanghai, Guangzhou, Tianjin, Shenzhen, Hangzhou, and Chengdu. The Chinese government has not yet determined when the implementation will be expanded to cover all cities in China.
Participation in the private pension plan will be open to all Chinese citizens and resident workers who currently contribute to the basic pension insurance for urban employees or the basic pension insurance for urban and rural residents.
Participants will be allowed to make voluntary contributions of up to RMB 12,000 per year into their individual pension accounts.
Payroll Cycle
The payroll cycle in China is generally monthly, and payments are made on the last working day.
13th Salary
In China, it is customary to pay a 13th-month or even 14th-month salary during the month of the Lunar New Year or Spring Holiday. This will be stipulated within the employment contract.
Authority Payments
Authority Payment Frequency Methods
Tax office - Monthly, 15th of following month - Bank transfer - RMB
Social insurance office - Monthly, end of the month - Bank transfer - RMB
Housing fund office - Monthly, end of the month - Bank transfer - RMB
The standard VAT rate is 13.00%.
The National minimum wage in China differs per region; the most common minimums include 2,320 CNY in Beijing, and 2,590 CNY in Shanghai.
Sick pay in China is outlined in the employment contract and depends on the years of employment, the actual amount of sick leave, and the provision of a professional medical certificate. Some of the regulations regarding the calculation for sick pay are made at a local level, e.g., there are differences between Shanghai and Beijing. However, in general, the process is as follows:
The amount of paid sick leave entitlement is based on the number of years of service.
Less than five years entitles the employee to 3 months of sick leave
5 – 10 years’ service entitles the employee to between 6 to 9 months of sick leave (region-specific)
10 – 15 years’ service entitles the employee to between 12 to 18 months of sick leave (region-specific)
15 – 20 years’ service entitles the employee to 18 months, and more than 20 years of service entitles the employee to up to 24 months of sick leave
The entitlement for sick pay is also based on the number of years’ service; for sick leave of fewer than six months, the calculation is as follows:
Less than two years of employment – 60.00% of the regular wages
2-4 years of employment – 70.00% of the regular wages
4-6 years of employment – 80.00% of the regular wages
6-8 years of employment – 90.00% of the regular wages
8+ years of employment – 100.00% of the regular wages
The entitlement for sick pay is also based on the number of years of service for sick leave of more than six months in length; the calculation is as follows:
Less than 1 year of employment – 40.00% of the regular wages
1-3 years of employment – 50.00% of the regular wages
3+ years of employment – 60.00% of the regular wages
Paid leave in China is set in the employment contract and is dependent upon the years of employment. Paid leave is in addition to all public holidays.
For an employee within the first year of employment, there is no entitlement for paid annual leave. However, after completing the first year up to the tenth year, the employee is entitled to 5 days of paid leave. This increases to 10 days for employees within 10 to 20 years of service and a maximum of 15 days paid leave for employees who have completed 20 years’ service or more.
There are 11 yearly public holidays, however, some regions have additional holidays.
Working on public holidays is uncommon in China, but if an employee is required to work the overtime payment is generally paid at 300% of the hourly rate. The hourly rate is calculated by using the monthly salary rate for the employee divided by 174 (average number of working hours in a month).
In China, public holidays are sometimes moved to create an extended holiday period.
Date Day Holiday Notes
1 Jan 2024 - Monday - New year´s Eve
10 Feb 2024 - Saturday - Lunar New Year
11 Feb 2024 - Sunday - Spring Festival
12 Feb 2024 - Monday - Spring Festival
13 Feb 2024 - Tuesday - Spring Festival
14 Feb 2024 - Wednesday - Spring Festival
15 Feb 2024 - Thursday - Spring Festival
16 Feb 2024 - Friday - Spring Festival
17 Feb 2024 - Saturday - Spring Festival
8 Mar 2024 - Friday - International Women’s Day - A common but not mandatory half day off for women only
4 Apr 2024 - Thursday - Qing Ming Jie
5 Apr 2024 - Friday - Qing Ming Jie Holiday
6 Apr 2024 - Saturday - Qing Ming Jie Holiday
1 May 2024 - Wednesday - International Labor Day
2 May 2024 - Thursday - Labour Day Holiday
3 May 2024 - Friday - Labour Day Holiday
4 May 2024 - Saturday - Labour Day Holiday
5 May 2024 - Sunday - Labour Day Holiday
10 Jun 2024 - Monday - Dragon Boat Festival
15 Sep 2024 - Sunday - Mid-Autumn Festival Holiday
16 Sep 2024 - Monday - Mid-Autumn Festival Holiday
17 Sep 2024 - Tuesday - Mid-Autumn Festival
1 Oct 2024 - Tuesday - National Day
2 Oct 2024 - Wednesday - National Day
3 Oct 2024 - Thursday - National Day
4 Oct 2024 - Friday - National Day
5 Oct 2024 - Saturday - National Day
There is no at-will employment in China, and termination of employees must be for cause.
Notice Period
30 days’ prior notice is required. Notice is not required for misconduct cases or termination due to failure to meet the conditions of employment during the probation period.
Severance Pay
Severance pay is based on the number of years an employee has worked with the employer at the rate of 1 month’s average wage for each year worked, rounded up to the nearest .5 or 1 years.
Wages used for calculation during service years are subject to a statutory cap of 12 months, and each individual month of severance payment can be capped at 300% of average compensation in the local city where the termination occurs.
Probation Period
The probation period in China is up to 6 months for indefinite contracts and 1 to 2 months on fixed term contracts depending on length of employment.
The employer must sponsor the visa and must be an accredited company that may hire foreign employees. The employee must be a certified foreign expert in the field they will be working.
In China, there is an age limit for male and female applicants for a work visa; for male applicants, the age limit is 24-65, and for female employees, the age limit is 24-55. The employer must send a government-issued employment permit and visa notification letter to the employee, executed and submitted to the Chinese government.
A Z Visa is valid for only 30 days upon arrival, and during this time, the employer must apply for a temporary residence permit on behalf of the employee. The Z visa is valid for 90 days up to 50 years.
Other visa options include the R Visa for highly skilled people in great demand in China and the J Visa for journalists.
The process usually takes about 8 weeks to complete.
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Local Laws & Regulations
We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.
Our team of regional experts are here to support you with your global expansion plans. If you have any questions, contact us and we will be delighted to help.
