China PEO & EOR

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Operating through our Shanghai office along with 6 additional entities throughout China with local experts on the ground.

We offer fair, scalable, and transparent pricing on China PEO service. Contact us for a cost breakdown.

End service in China with no additional penalties or fees.

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China

Hire in China

Labor Laws

Compensation & Benefits

FAQs

Simple, compliant hiring with Horizons PEO

Hire in China

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.

Facts & Stats

1. PEO Platform

Hire in China, and pay employees through our platform or app.

2. PEO Cost

For $299 per employee, our China PEO solution is the most affordable on the market.

3. Fast Time-To-Hire

Fast China onboarding, hire in as little as 12 hours.

4. Compliant Contracts

We draft compliant, bilingual China labor contracts.

5. Extensive Benefits

We manage all China “Five Insurances” mandatory benefits.

6. 180+ Countries

It doesn’t stop with China — we hire employees globally.

stay compliant with China labor laws

Labor Laws

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.

Employment contract types

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.

Project-based

Probationary period	No probationary period.
Termination	At completion of the project.
Severance	Max. one months per year of employment.

Fixed-term

Probationary period

Directly related to contract duration:

1-year contract: 1 month probation
2-year contract: 2 month probation
3+ year contract: 6 month probation

Termination notice period

30 days (minimum and maximum allowed by labor law)

Severance

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

Indefinite

Probationary period	Not available
Termination notice period	30 days (minimum and maximum allowed by labor law)
Severance	1 month salary per year of service

Risk of Misclassification

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.

Working hours in China

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.

Overtime must be compensated in the following way:

For a regular workday: 150% of the standard hourly rate (also known as ‘time and a half’);
For a rest day: 200% of the standard hourly rate, or a day off (also known as ‘double time, or a day in lieu’);
For a statutory holiday: 300% of the standard hourly rate (also known as ‘triple time’).

Hire compliantly in China without a local entity

Hire in 12 hours with the China employment experts — no subsidiary required.

Chinese national holidays 2023

Holiday Schedule in China [2023]

China has a range of national public holidays that are celebrated annually. In 2023 these holidays are:

Date	Holiday name
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

Annual leave in China

The amount of paid time off employees are eligible to receive is based on how long they have been employed at their current company:

Under 1 year of employment | no leave entitlement
1-10 years of employment | 5 days of paid leave annually
10-20 years of employment | 10 days of paid leave annually
20+ years of employment | 15 days of paid leave annually

Expert Knowledge

Tom Kussmann, COO
(Berlin)

“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.”

Sick leave in China

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)

Under 1 year of employment — no leave entitlement
1-10 years of employment — 5 days of paid leave annually
10-20 years of employment — 10 days of paid leave annually
20+ years of employment — 15 days of paid leave annually

Over 6 months of sick leave

Under 1 year of employment — 40%
1-3 years of employment — 50%
3+ years of employment — 60%

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.

Maternity leave in China

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.

Expert Knowledge

Sebastian Klotz,
Sales Manager (Berlin)

“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.”

Termination & severance in China

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.

China's compulsory social security contributions

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.

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.

China social security for foreigners

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.

Individual income tax

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.

Health insurance

Standard health and pension insurance is provided through the national system, although supplementary health insurance can be provided to the employees.

hassle-free chinese compensation & benefits

Compensation & Benefits

China compensation laws

The minimum wage in China varies greatly between provinces and cities. In Shenzhen, the minimum wage is 1,808 yuan per month. This is only slightly less than Shanghai, which has a monthly minimum wage of 1,820 yuan. However, in Guizhou, the monthly minimum drops significantly to 1,030 yuan.

13 month salary in China

The 13th month salary is the standard type of bonus provided to employees working in China at the end of the year. Rewarding employees with the 13th month salary is extremely common in China. As such, we recommend being clear with the employee during the employment contract phase so the employee is aware of the bonus stipulations regarding their annual salary and bonus structure.

Social security for Chinese nationals

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.

hassle-free chinese compensation & benefits

Compensation & Benefits

Understanding the Juzhuzheng (居住证) Residence Card in Mainland China

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:

Fixed-Term Contract Requirement: The Juzhuzheng application strictly mandates the use of fixed-term employment contracts. Unfortunately, open-ended contracts won’t suffice. Employees can opt for a fixed-term contract spanning 1, 2, or 3 years. For a deeper understanding, refer to our detailed section on China employment contracts.
The Jifen Calculation: Each Juzhuzheng application is invariably paired with the Jifen calculation. It’s an integral part of the process.
Complex Procedure: Securing a Juzhuzheng isn’t a walk in the park. It’s a lengthy and complicated process, requiring meticulous attention to detail.
Feasibility Checks: Due to the intricacies of the process, it’s essential to have the feasibility of your application confirmed by our dedicated Horizons China team. They bring local expertise and insights, ensuring your application journey is seamless and efficient.

The JiFen 积分: Understanding China's Hukou Points Calculation

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.

Mandate for Fixed-Term Contracts: The JiFen calculation process is designed to work exclusively with fixed-term employment contracts. If you’re on an open-ended contract, you’ll unfortunately find yourself ineligible for this procedure. The tenure of these fixed-term contracts can range from 1 to 3 years. For an in-depth exploration, do consult our dedicated segment on China’s employment contracts.
Integral to Juzhuzheng: The JiFen application and the Juzhuzheng are inextricably linked, meaning that one invariably accompanies the other in the application process.
Complex Path Ahead: It’s imperative to approach the JiFen process with patience. Characterized by its intricate steps and lengthy duration, it requires a thorough and meticulous approach.
Consultation with Specialists: Before embarking on this journey, it’s wise to touch base with experts in the field. We always suggest confirming the viability of your JiFen application with our adept Horizons China team.

Personal HuKou 户口: An Insight into China's Permanent Municipal Residency System

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:

Migration Control: The Hukou system is instrumental in regulating and overseeing internal migration within China.
Social Protection Management: Through this system, the state ensures that citizens are provided with the requisite social protection based on their residency status.
Maintaining Social Stability: Hukou plays a crucial role in preserving harmony and stability by managing population distribution and access to urban amenities.

Registration Types in the Hukou System:

Personal Hukou: This pertains to a personal address that the citizen owns. It acts as a kind of identification card, indicating that the individual has bought a house with a property certificate registered under their name. This ensures they can obtain the Hukou of the city where their residence is located.
Jiti Hukou: This is more of a collective or “Group Hukou” where citizens are registered under the address of a company. It’s often sought by those who don’t own a house but rent one instead. Typically, entities like state-owned companies, government institutions, and large enterprises are the ones that obtain relevant qualifications for this kind of Hukou. It’s possible for multiple citizens to be registered under a single public address.

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.

Noteworthy Considerations:

The Hukou application process is notoriously long and intricate.
The associated costs can be steep.
Before venturing into the application, it’s advised to check the feasibility with specialists like the Horizons China team.
By offering a structured way to navigate urban residency, the Hukou system remains central to the urbanization and social dynamics of China.

Hire across China in 12h without
a subsidiary

We’re the leaders for employment and HR solutions in China and ensure a truly seamless local hiring experience.

FAQs

Does Horizons have its own legal entities in China?

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.

Can a PEO in China hire both local and foreign nationals to work in China?

A China PEO can hire employees of all nationality as long as their profiles match with the requirements established by the Chinese immigration authorities.

Can a China Employer of Record hire staff on my behalf in different cities in China?

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.

What responsibilities do I have regarding my employee(s) in China?

The China EOR prepares all payroll calculation (including social charges, taxes, benefits, expenses claim, etc.) on your behalf – as the employer of record of your employee(s) in China.

Do I have to pay taxes or contribute to social charges in China?

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.

How many employees can I hire globally through a PEO partner?

The number of employees dispatched in China is not limited and can vary according to the ongoing projects and business development.

Can I pay my employees working in China directly from abroad?

All mandatory payments stated on the labor contract shall be paid by the China PEO. Additional payments (e.g. expenses) can be reimbursed by the PEO on your behalf.

What is the cost of termination of an employee in China?

No severance pay has to be paid during the probationary period, then the amount of the termination pay is usually 1 or 2 months salary per year of seniority, depending on the labor contract nature and the reason for termination.

Do my staff need an office space?

In China, work from home is authorized as long as the employer gives its approval.

Can Horizons also recruit staff in China, to be hired under a PEO solution?

Horizons provide China recruitment services and PEO services, available for both foreign and local professionals from any background.

How can I change the terms and conditions of my staff contracts in China?

Horizons can implement any changes directly with the employee on your behalf.

How are salaries structured in China?

The overall salary package of employees in China includes base salary, top-ups and any benefits. The key elements include:

Base Salary
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.

How do I calculate the total payroll cost of hiring in China?

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.

How many public holidays are there 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.

China PEO & EOR

Simple, compliant hiring with Horizons PEO

Hire in China

Facts & Stats

1. PEO Platform

2. PEO Cost

3. Fast Time-To-Hire

4. Compliant Contracts

5. Extensive Benefits

6. 180+ Countries

stay compliant with China labor laws

Labor Laws

Employment contract types

Project-based

Fixed-term

Indefinite

Risk of Misclassification

Working hours in China

Overtime must be compensated in the following way:

Hire compliantly in China without a local entity

Chinese national holidays 2023

Annual leave in China

Sick leave in China

Maternity leave in China

Termination & severance in China

China's compulsory social security contributions

China social security for foreigners

Individual income tax

Health insurance

hassle-free chinese compensation & benefits

Compensation & Benefits

China compensation laws

13 month salary in China

Social security for Chinese nationals

hassle-free chinese compensation & benefits

Compensation & Benefits

Understanding the Juzhuzheng (居住证) Residence Card in Mainland China

The JiFen 积分: Understanding China's Hukou Points Calculation

Personal HuKou 户口: An Insight into China's Permanent Municipal Residency System

Hire across China in 12h without a subsidiary

FAQs

Hire Anywhere. Today.

Hire across China in 12h without
a subsidiary