China PEO Services

Some of China’s main cities for working include Beijing, Shanghai, Shenzhen and Guangzhou; all of which are highly vibrant cities, which offer fascinating experiences for expats. Outside of the main cities, China also boasts beautiful and unique landscapes in the countryside, which it is essential to explore when in the country.

The biggest industries in China (in terms of revenue) are telecoms, manufacturing and agriculture, however the country is notable for its fast-growth in a number of other industries.

Employment Information

China typically utilises a Monday to Friday 5-day working week. Chinese labour law also posits that employees must not work more than 40 hours per week.

In China, the standard salary structure/offer package is:

• Gross salary: a salary with a fixed base
• Salary flexibility: performance bonus, commission, and allowances
• 13-month salary/annual bonus: this is particularly common in China
• 5 social insurances and 1 housing fund are required benefits
• Supplemental health insurance is not mandatory, but it is very common among foreign employers
• Annual paid leave and sick days are essential

Hiring employees in China

When employing staff in China, your monthly employment costs will include:

• Employee’s monthly net salary
• Employer’s contribution towards mandatory benefits
• Employee contribution towards mandatory benefits
• Allowances
• Individual income tax
• Other benefits

Mandatory benefits contributions in China

When employing workers in China, one of the most crucial elements to consider is social security. Social security in China encompasses five distinct types of insurance, as well as a housing fund. Pension, medical, unemployment, work-related injury, and maternity insurances make up the five insurances that must be covered.

China annual leave policies

China’s paid public holidays are as follows:

• New Year’s Day: 1 day
• Spring Festival / Chinese New Year: 3 days
• Qing Ming Festival: 1 day
• Labor Day: 1 day
• Dragon Boat Festival: 1 day
• Mid-Autumn Festival: 1 day
• China National Holiday: 3 days

Employers are required to pay an overtime payment if employees have to work during any public holidays.

The Chinese Government announces the exact date of each public holiday at the end of December each year.

Probation periods

The probation period for employees is determined by the terms of the employment contract. Usually, a 3-month probation period is given for workers on a 1-year contract. A maximum of a 6-month probation period may be given to workers if their employment contract term is 3 years or more.

An employee’s salary during a probation period cannot be lower than 80% of their salary after the probation period.

Severance payments

Severance compensation in China is calculated based on how long an individual has worked for the company. For each full-year that an employee has worked for a company, a severance pay-out of one month’s salary should be paid. A half-month’s wage is provided for working periods of less than six months.

Expanding into the Chinese market

While it can seem extremely challenging to enter the Chinese market, a China-focused PEO or Employer of Record like Procorre Global can prove exceptional useful to expedite and simplify the process. A China PEO can help you get set up overseas with all of the necessary requirements quickly, and without the need of a permanent establishment in-country.

Impacts of COVID-19

Although COVID-19 had a huge impact in China during 2020, the Government’s quick intervention allowed the nation to get back to normal relatively quickly. China’s border control is still strict since the pandemic, and it anticipates foreign entry to resume as of early 2022.

One possible approach for an expat to enter China is to get a Chinese vaccination certificate, and a valid APEX card or other Visa that provides access to mainland China.