Hire and pay talents
with Horizons in
SALARY PAYMENT IN Chinese Yuan (CNY, ¥)
CONTRACT LANGUAGES Mandarin & English
PAYROLL TAX 39.50% – 41.20%
PAYROLL CYCLE Monthly
TIME TO HIRE 12 hours
Horizons is a leading Employer of Record and Professional Employer Organization in China.
It provides compliance solutions to ensure your business in China operates in line with Chinese labor laws and tax regulations. Businesses benefit from hiring in, investing in, or job outsourcing to, China in a range of industries, from customer service, to accounting services, to software development.
We also process monthly payroll, and, as a China Employer of Record, absorb all local employer liabilities. Partnering with our China PEO is the quickest and most cost-effective way to enter the Chinese market.
Hire in China, and pay employees through our platform or app.
For $299 per employee, our China PEO solution is the most affordable on the market.
Fast China onboarding, hire in as little as 12 hours.
We draft compliant, bilingual China labor contracts.
We manage all China “Five Insurances” mandatory benefits.
It doesn’t stop with China — we hire employees globally.
One of the principal reasons for engaging a PEO in China (also known as a ‘China Employer of Record’ or ‘China EOR’), is to ensure full compliance with China’s employment laws. Here we explain how a China PEO ensures:
01. Compliance with China employment contract requirements
02. Compliance with working hours, national holiday provisions, and China social security requirements.
China requires all employers to provide a compliant employment contract that states the employee’s compensation, benefits, and termination requirements. Employment contracts in China should state the salary and any additional compensation in the local Chinese Yuan Renminbi.
When you partner with a China PEO & Employer of Record, a team of local experts can provide assistance for drafting strong employment contracts compliant with local regulations. A PEO in China can provide your business with labor contracts in the three different forms set out below.
|Probationary period||No probationary period.|
|Termination||At completion of the project.|
|Severance||Max. one months per year of employment.|
Directly related to contract duration:
1-year contract: 1 month probation
|Termination notice period|
30 days (minimum and maximum allowed by labor law)
2 months salary per year of service
In cases of justified termination: 1 month’s salary per year of service
In cases of dismissal on serious grounds: none
|Termination notice period|
30 days (minimum and maximum allowed by labor law)
1 month salary per year of service
China, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in China may lead to fines and penalties for the offending company.
China operates with a standard five-day working week that should not surpass 8 hours of work per day or 44 hours per week. Companies typically run on an 8am to 6pm schedule with a one-hour lunch break.
There is a strict limit on overtime in China. Overtime is not allowed to exceed 36 hours per month, except where there is an emergency event requiring it. A China EOR ensures that all employment contracts reflect these statutory limits.
Hire in 12 hours with the China employment experts — no subsidiary required.
|1 Jan Sunday||New Year’s Day|
|21 Jan Saturday||Spring Festival Eve|
|22 Jan Sunday||Lunar New Year|
|23 Jan to 27 Jan||Spring Festival Golden Week holiday|
|8 Mar Wednesday||International Women’s Day|
|3 Apr to 4 Apr||Qing Ming Jie holiday (Tentative Date)|
|5 Apr Wednesday||Qing Ming Jie|
|1 May Monday||Labour Day|
|4 May Thursday||Youth Day|
|22 Jun Thursday||Dragon Boat Festival|
|23 Jun to 24 Jun||Dragon Boat Festival holiday (Tentative Date)|
|29 Sep Friday||Mid-Autumn Festival|
|1 Oct Sunday||National Day|
|2 Oct to 7 Oct||National Day Golden Week holiday|
The amount of paid time off employees are eligible to receive is based on how long they have been employed at their current company:
“For foreign employers that are looking to hire either mid-level or senior executives, more vacation days are generally offered. In fact, it is common for such offers to come with up to four weeks of vacation time per year.”
Employees are entitled to between 3 and 24 months paid leave to address medical ailments and treatment. The exact amount of time off will be based on how long the employee has been with the company. Sick pay should never drop below 80% of the local minimum wage.
Workers compensation for injuries or illnesses incurred while working cover employees with legal entitlements of up to one year’s leave at full pay to receive medical treatment.
Take a look at the chart below to learn more about the specifics of sick leave standards in China:
Less than 6 months of sick leave
(percentage of regular wages owed to the employee)
Over 6 months of sick leave
In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.
China provides all female employees with 98 days paid maternity leave. They have the option to begin this leave within 15 days prior to child birth. Depending on the city, women over the age of 24 are generally provided with an additional 30 days for their “late maternity leave.”
Women are traditionally granted full pay during their leave, which is either paid through social security or by their employers. China has laws in place that legally protect women from being terminated while pregnant or breastfeeding a newborn child.
An EOR in China will ensure that all maternity leave obligations are fully complied with.
“The laws for paternity leave differ greatly by location, but paternity leave typically does not exceed 14 days. Men in Shanghai usually receive 3 days of paternity leave while men in Shenzhen are typically granted 10 days.”
In order to terminate an employee in China, there must be strong cause for dismissal and clearly documented grievances leading up to the termination. The initial employment contract must contain an agreed upon probationary period that can last up to six months in length.
Specific time requirements for submitting a notice of termination vary widely by industry. Any employer terminating an employee of between one month and two year’s tenure must provide at least one week’s notice. Employees working for a company for over two years require notice of one week for each year of completed service up to 12 weeks of notice.
Employers have the option of including “payment in lieu of notice” in employee contracts which permit employers to pay employees instead of providing them with a notice of termination. This is common in Chinese business practice.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time.
Setting up a PEO in China can mitigate risk for foreign companies and provide guidance through this process.
Chinese employees are provided with statutory benefits through the “five insurances” practice in China. These include
However, additional benefits, such as housing, are predicated by the income tax bracket of the individual employee.
These benefits are paid out of social contributions paid by both the employee and employer. More on this below.
Different rules are applied to social security contributions from foreigners and Chinese nationals.
Foreign employees in Shanghai are not yet required to pay the Chinese social security for foreign nationals. In other cities in China, foreigners must pay the full amount of Chinese social insurance.
A PEO in China will ensure that all employees are paying the correct contributions.
Effective as of January 1st 2019, China has adjusted tax brackets and changed residency rules in order to reduce the tax burden on low income earners, with new special additional deductions available for resident tax payers.
The Individual Income Tax is calculated on an annual basis. The China EOR will automatically withhold taxes in advance on a monthly basis on the accumulated income and deductions. Individuals may have additional taxes or tax returns to claim through the annual settlement process.
Standard health and pension insurance is provided through the national system, although supplementary health insurance can be provided to the employees.
As mentioned above, Chinese employees are provided with statutory benefits through the “five insurances” practice in China. These include health insurance, pension, worker’s compensation, maternity benefits, and unemployment insurance.
They are all funded through ‘social pooling’, formed from payments made by the state, employer and employee, to varying degrees. Entitlements are then acquired through contribution.
However, additional benefits, such as housing, are predicated by the income tax bracket of the individual employee. China’s housing fund system allows Chinese employees to save money towards purchasing their own house, thus providing a way for local employees to have the means to ensure social security and stability in the country. The Housing Fund has no social pool, since the entire amount goes directly to employees’ personal Housing Fund accounts. An EOR in China will always ensure that social security obligations are fully complied with.
The Juzhuzheng is a unique city residence card, designed specifically for Chinese nationals working in Mainland China. It plays a pivotal role when an employee, set to work in a city, doesn’t have any family from that very city. In such scenarios, obtaining a Juzhuzheng becomes mandatory for the employee.
A Few Key Points to Remember:
Navigating the Chinese employment landscape requires a keen understanding of its unique systems, one of which is the JiFen 积分 or also referred to as the Hukou Points Calculation. This system tracks and records an individual’s seniority in their specified work location through points accumulation.
This procedure seamlessly integrates with the Juzhuzheng processing, ensuring that the accrued seniority of an individual in their respective city of employment is accurately calculated.
The HuKou system stands as a cornerstone in the Chinese administrative structure, reflecting the country’s unique approach to urban residency and societal management.
Understanding the Core Functions of the Hukou System:
Registration Types in the Hukou System:
The Journey to Acquiring Hukou:
After accumulating the required Jifen (points) and gaining adequate work experience, such as 7 years for cities like Shanghai, Chinese nationals can become eligible to apply for the Hukou. This can be equated to a sort of “Green Card” which grants permanent residency.
However, securing a Hukou isn’t straightforward. The application process can extend beyond a year, and its outcome is determined by local government authorities. This unpredictability stems from the high demand for Hukou, especially in prestigious locations like Shanghai. Many are driven by the desire to ensure a smoother enrollment process for their children in public schools or to purchase property in the city.
Hukou’s Broader Implications:
The significance of Hukou extends beyond just residency. For instance, in Shanghai, having a Hukou can simplify processes like enrolling children in public schools. Residents naturally get priority over non-residents. Furthermore, owning a Hukou can also facilitate property acquisition in the city.
We’re the leaders for employment and HR solutions in China and ensure a truly seamless local hiring experience.
Absolutely. As a premier PEO & EOR in the Asia-Pacific region, Horizons functions via 7 legal entities spread across Mainland China, encompassing cities like Shanghai, Beijing, Guangzhou, Shenzhen, Chongqing, Chengdu, and Tianjin. This allows us to comply with social security and housing fund processing requirements at municipal level.
Furthermore, we proudly maintain physical office spaces in each of these cities.
Horizons can hire your staff everywhere in China through its PEO network of local entities specialized in HR management services. Through an infrastructure of multiple local legal subsidiaries across Mainland China, we ensure that social security and housing fund contributions are made directly at municipal level.
All mandatory social charges contributions, housing fund contributions and income tax payments are paid directly to the Chinese authorities and relevant third-parties by Horizons. Both the foreign company and its employee(s) can access the records of all payments at any time.
The number of employees dispatched in China is not limited and can vary according to the ongoing projects and business development.
Horizons provide China recruitment services and PEO services, available for both foreign and local professionals from any background.
The overall salary package of employees in China includes base salary, top-ups and any benefits. The key elements include:
Optional ‘top ups’, such as a performance bonus, commission or remote work stipend
’13th month’ salary
Compulsory benefits including leave entitlements, the five social insurances and contributions to the housing fund
Additional (optional) health insurance.
When expanding internationally, it is crucial to calculate what the total cost per employee (the ‘payroll cost’) will be. In China, this means adding together the cost of net salary, employer and employee social insurance contributions, any additional allowances and income tax.
Feel free to explore our Global Payroll Calculator for an initial cost estimate. This tool offers detailed insights, allowing you to determine hiring costs down to specific cities in China.
Paid public holidays in China are:
New Year’s day (1 day paid leave)
Chinese New Year (3 days paid leave)
Qing Ming Festival (1 day paid leave)
Labor Day (1 day paid leave)
Dragon Boat Festival (1 day paid leave)
Mid-Autumn Festival (1 day paid leave)
China National Holiday (3 days paid leave).
Special rates apply if organizations require staff to work on public holidays.