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China has a mandatory five social insurance + Housing Fund system (employer ~35–40% burden in major cities), progressive IIT withholding, city-specific contribution rates, and complex Labor Contract Law termination requirements. Rippling handles STA, social security bureau, and Housing Fund compliance.
China is the world's second-largest economy with major strengths in manufacturing, technology (Alibaba, Tencent, Huawei, ByteDance), finance, and professional services. Shanghai, Beijing, and Shenzhen are the primary business hubs for international employers. China has a vast, highly educated workforce. Employment is governed by the Labor Contract Law (2008) and is strongly employee-protective, particularly around termination. Payroll complexity is high due to city-specific social insurance rates and the cumulative IIT system.
| Contribution | Rate (approx.) | Notes |
|---|---|---|
| Pension (employer) | 16% | On contributory salary base (city ceiling applies) |
| Medical insurance (employer) | 6–10% | City-specific rate |
| Work injury insurance | 0.2–1.9% | Risk-class dependent |
| Maternity insurance | 0.5–1% | City-specific |
| Unemployment insurance | 0.5–1% | City-specific |
| Housing Fund (employer) | 5–12% | City-specific rate; deposited to employee's HF account |
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| Contribution | Rate (approx.) | Notes |
|---|---|---|
| Pension (employee) | 8% | On contributory salary base; city-specific ceiling |
| Medical insurance (employee) | 2% | Plus fixed personal account contribution |
| Unemployment (employee) | 0.5% | City-dependent |
| Housing Fund (employee) | 5–12% | City-specific rate; on contributory salary base |
| IIT (Individual Income Tax) | 3–45% | Progressive; monthly withholding by employer |
| Annual Taxable Income (CNY) | Rate |
|---|---|
| Up to 36,000 | 3% |
| 36,001–144,000 | 10% |
| 144,001–300,000 | 20% |
| 300,001–420,000 | 25% |
| 420,001–660,000 | 30% |
| 660,001–1,000,000 | 35% |
| Above 1,000,000 | 45% |
Standard deduction: CNY 5,000/month. Cumulative withholding method; annual reconciliation March 1–June 30.
Statutory severance: N months (years of service, max 12 if salary above 3× local average). Written labor contract required within 1 month or employer pays double wages. Dismissal without legal grounds: employee may demand reinstatement or double severance. Probation: up to 6 months (scaled by contract length).
China's mandatory social insurance (wu xian) covers five branches: pension, medical, work injury, maternity, and unemployment. Plus the Housing Fund (gong ji jin). Rates are set locally by each city/province and change periodically. Shanghai 2024 approximate employer rates: pension 16%, medical 10%, work injury 0.4%, maternity 1%, unemployment 0.5%, housing fund 7%. Total employer social burden approximately 35–40% of base salary in Shanghai/Beijing. All contributions are based on a contributory salary base (not actual salary, but a city-set range with a floor and ceiling).
China's Individual Income Tax (IIT) is calculated on annual cumulative income using a progressive rate schedule (3–45%). Employers withhold IIT monthly using the cumulative withholding method: the withholding for each month is calculated on the year-to-date income, minus the standard deduction (CNY 60,000/year = CNY 5,000/month), special deductions (housing loan interest, children's education, elderly care, etc.), and previous months' withheld tax. Employees file an annual IIT reconciliation (March 1–June 30) via the national tax app.
China's statutory severance is N months' salary (where N = years of service, each full year counts as 1, with partial years above 6 months counting as 1; partial years of 6 months or less counting as 0.5). Maximum severance: 12 months' average salary if the employee's monthly salary exceeds 3× the local average monthly salary. Statutory severance applies to dismissals for operational reasons, mutual agreement, and certain other terminations. Gross misconduct termination: no severance.
China does not have a national minimum wage. Each province and municipality sets its own minimum wage, adjusted periodically. Shanghai 2024: CNY 2,690/month. Beijing 2024: CNY 2,420/month. Shenzhen 2024: CNY 2,360/month. Employers must apply the minimum wage of the city where the employee works.
