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China's five social insurances + Housing Fund impose a ~35–40% employer burden in major cities. IIT cumulative withholding, written contract requirement (double wages if missed), and strong Labor Contract Law protections make China one of the most complex EOR markets globally. Rippling EOR handles all Chinese payroll, social insurance, and compliance.
China is the world's second-largest economy with major technology (Alibaba, Tencent, ByteDance, Huawei), manufacturing, and professional services sectors. Shanghai, Beijing, and Shenzhen are primary hubs for international employers. China's Labor Contract Law provides very strong employee protections. Payroll is highly complex due to city-specific social insurance rates, cumulative IIT withholding, and the Housing Fund. EOR is the dominant structure for foreign companies hiring Chinese nationals without a WFOE.
Setting up a Chinese WFOE requires SAMR registration, minimum registered capital (varies by sector), local tax bureau registration, social insurance and Housing Fund registration. Process: 2–4 months. EOR is strongly recommended for 1–20 employees, market entry, or where WFOE formation timeline is a barrier. China's Labor Contract Law double-wage penalty (no written contract within 1 month) makes EOR's compliance infrastructure critical.
Pension: 8% of contributory salary base. Medical: 2%. Unemployment: 0.5%. Housing Fund: 5–12% (city-specific). IIT: progressive 3–45% withheld monthly via cumulative method. Total employee statutory deductions approximately 16–22% of contributory base (excluding IIT).
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Pension: 16% of contributory base. Medical: 6–10% (city-specific). Work injury: 0.2–1.9%. Maternity: 0.5–1%. Unemployment: 0.5–1%. Housing Fund: 5–12% (city-specific). Total employer statutory burden: approximately 35–40% of contributory salary base in Shanghai/Beijing. Contributory base is city-set (floor and ceiling — not actual salary).
IIT progressive 7-bracket: 3% (up to CNY 36,000); 10% (36,001–144,000); 20% (144,001–300,000); 25% (300,001–420,000); 30% (420,001–660,000); 35% (660,001–1,000,000); 45% (above 1,000,000). Standard deduction: CNY 5,000/month. Cumulative withholding method; annual reconciliation March 1–June 30 via IIT app.
Annual leave: 5 days (1–10 years); 10 days (10–20 years); 15 days (20+ years). Maternity: 98 days national minimum; many cities grant 158–190 days. Paternity: 15–30 days (city-specific). Medical treatment period: 3–24 months (extended sick leave with protections). Public holidays: 11 national days (Golden Week makeup days may shift working days).
Statutory severance: N months by years of service (max 12 for high earners). No dismissal without legal grounds — employee may demand reinstatement or double severance. Double-wage penalty for missing written contract. Written contract required or open-ended deemed. Medical treatment period: employer cannot dismiss during protected sick leave period. Rippling EOR manages terminations compliantly.
Foreign nationals require a work permit and residence permit (work-type). Processing: 4–8 weeks. Work permit issued by local Human Resources and Social Security Bureau. Rippling EOR supports work permit applications through its Chinese entity. Foreign expert certificates available for senior technical roles.
Statutory: Five social insurances (pension 16% employer, medical 6–10%, work injury, maternity, unemployment) + Housing Fund (5–12%) — combined employer burden ~35–40% of contributory base in Shanghai/Beijing. Annual leave 5–15 days (by tenure), maternity 98–190 days (city-specific), medical treatment period 3–24 months.
Market standard: 13th-month bonus (near-universal), commercial health insurance top-up, meal and transport subsidies, supplementary housing fund, equity/ESOP at tech companies. Shanghai, Beijing, Shenzhen are primary markets.
Rippling EOR China operates through a local Chinese entity. Key China-specific handling: city-specific social insurance and Housing Fund setup, IIT cumulative withholding calculation, written labor contract management (signed before start date), contributory salary base determination, statutory severance calculation, and annual IIT income certificate issuance.
China's mandatory social insurance covers five branches: pension (employer 16%), medical (employer 6–10%), work injury (0.2–1.9%), maternity (0.5–1%), and unemployment (0.5–1%). Plus the Housing Fund (employer 5–12%). Rates are city-specific and the contributions are calculated on a contributory salary base — a city-set range with a floor and ceiling — not on actual salary. Rippling EOR calculates contributions using the correct city's rates and contributory salary base for each employee.
China's IIT uses a cumulative withholding method. Each month, the employer calculates IIT on year-to-date income minus the standard deduction (CNY 5,000/month) minus approved special deductions (children's education, housing loan interest, elderly care, continuing education). The monthly withholding is the year-to-date tax minus prior months' withheld tax. Employees file an annual reconciliation (March 1–June 30) via the IIT mobile app. Rippling EOR handles the complex cumulative calculation automatically.
China's Labor Contract Law requires written employment contracts to be signed within 1 month of the employee's start date. Failure to sign within 1 month: employer owes double the employee's monthly wages for each month without a contract (up to 12 months). Failure to sign after 12 months: deemed to be an open-ended (no fixed term) labor contract. Rippling EOR ensures written contracts are signed before or on the start date.
China's statutory severance is N months' salary (N = years of service; partial years above 6 months count as 1; partial years of 6 months or less count as 0.5). Maximum: 12 months if the employee's monthly salary exceeds 3× the local average monthly salary. Statutory severance applies to dismissals for operational/economic reasons, mutual agreement termination, and certain other terminations. Gross misconduct: no severance. Rippling EOR calculates statutory severance for each termination.
