Employer of Record in China

General Information

• Currency: Chinese Yuan (CNY)
• Employer Taxes: 39.50% – 41.20%
• Payroll Frequency: Monthly
• Employee Costs: 22.5%
• Capital: Beijing
• Fiscal Year: 1 January – 31 December

Main Aspects of the Labour Code

Minimum Wage

General: The national minimum wage in China varies by region, with common minimums including 2,320 CNY in Beijing and 2,590 CNY in Shanghai.

Payroll

Payroll Cycle: The payroll cycle in China is generally monthly, and payments are made on the last working day.

13th Salary

In China, it is common practice to provide a 13th-month or even 14th-month salary, typically paid during the Lunar New Year or Spring Festival. This is usually outlined in the employment contract.

Working Hours

General: The standard working hours in China are 8 hours per day, 40 hours per week, with a maximum limit of 45 hours per week.

Overtime: All work exceeding the standard weekly hours is considered overtime and is governed by the employment contract or collective agreements. Typically, no more than one hour of overtime per day is allowed, except in exceptional circumstances, where it can extend to 3 hours per day, with a monthly limit of 36 hours. Overtime is compensated at 150% of the regular salary for weekday work, 200% for weekends, and 300% on public holidays. This policy applies to all employees, including those in management positions.

Leave

Annual Leave (Vacation):

Paid leave in China is outlined in the employment contract and is based on the employee’s years of service, in addition to public holidays.

Employees are not entitled to paid annual leave during their first year of employment. After completing one year of service and up to ten years, employees receive 5 days of paid leave. This increases to 10 days for those with 10 to 20 years of service, and employees with over 20 years of service are entitled to a maximum of 15 days of paid leave.

Public Holidays

China has 11 national public holidays each year, though certain regions may observe additional holidays.

While working on public holidays is rare, employees required to do so are typically compensated at 300% of their regular hourly rate. The hourly rate is calculated by dividing the employee’s monthly salary by 174, the average number of working hours per month.

Public holidays in China are occasionally rescheduled to create longer holiday periods.

Sick Days

Sick pay in China is determined by the employment contract and varies based on years of service, the duration of sick leave, and the submission of a valid medical certificate. Some regulations regarding sick pay calculations differ by region, such as in Shanghai and Beijing. However, the general framework is as follows:

Sick Leave Entitlement Based on Years of Service:

• Less than 5 years: 3 months of sick leave
• 5–10 years: 6 to 9 months of sick leave (varies by region)
• 10–15 years: 12 to 18 months of sick leave (varies by region)
• 15–20 years: 18 months of sick leave
• More than 20 years: Up to 24 months of sick leave

Sick Pay Entitlement for Leave Less than 6 Months:

• Less than 2 years of service: 60% of regular wages
• 2–4 years of service: 70% of regular wages
• 4–6 years of service: 80% of regular wages
• 6–8 years of service: 90% of regular wages
• 8+ years of service: 100% of regular wages

Sick Pay Entitlement for Leave Exceeding 6 Months:

• Less than 1 year of service: 40% of regular wages
• 1–3 years of service: 50% of regular wages
• 3+ years of service: 60% of regular wages

These entitlements ensure employees are supported during periods of illness, with both sick leave and pay based on their length of service.

Maternity Leave

Female employees in China are entitled to a minimum of 98 days of maternity leave, which can start 15 days before the expected childbirth. Additionally, provinces offer extended maternity leave, leading to the following total leave periods:

• Chongqing, Guangdong: 178 days
• Tianjin: 128 days
• Henan, Hainan: 190 days
• Jiangxi, Hebei (for third child), Zhejiang (for third child): 188 days
• Gansu, Heilongjiang, Fujian: 180 days
• Guangxi: 148 days
• Jiangsu: 128 days
• Other regions (including Beijing): 158 days

Maternity payments are calculated by the Social Security Bureau based on the employee’s average monthly salary in the year before the due date, or three times the minimum wage, whichever is higher. The exact calculation can vary by province for both basic and extended maternity leave.

Additional Leave Entitlements:

• Prenatal examination leave: Time off for doctor visits during the first 12 weeks.
• Difficult delivery: Natural delivery leave plus 15 extra days.
• Multiple births: Natural delivery leave plus 15 days, with an additional 15 days per extra baby.
• Prenatal leave: After the 7th month, an employee can take a 1-hour daily break. With employer approval, she may also take 2.5 months of prenatal leave.
• Breastfeeding leave: Up to two 30-minute feeding breaks per day for children under one year old, counted as working hours. Alternatively, employees can apply for 6.5 months of leave post-childbirth, subject to employer approval.
• Abortion or miscarriage: 15 days of leave if within the first 4 months; 42 days if after 4 months.

Termination of employment during pregnancy or within one year of childbirth is prohibited. Maternity insurance (as part of Social Security Insurance) ensures employees receive an allowance instead of regular salary during maternity leave.

Paternity Leave

Male employees in most regions of China are entitled to 15 days of paternity leave, though this varies by location. The following cities and provinces deviate from the standard 15-day leave:

• Tianjin, Shandong: 7 days
• Shanghai: 10 days
• Liaoning, Chongqing, Sichuan, Hunan: 20 days
• Ningxia, Guangxi, Inner Mongolia: 25 days
• Henan, Jiangxi, Anhui, Yunnan, Gansu: 30 days

Parental Leave

Parents in China are entitled to paid childcare leave, with the duration varying by province:

• Beijing & Shanghai: 5 days of childcare leave per year until the child turns three.
• Fujian, Guangxi, Inner Mongolia, Heilongjiang, Liaoning, Hebei, Jiangxi, Jiangsu, Sichuan, Guizhou, Zhejiang, Tianjin, Ningxia, Henan, Hubei, Hunan, Hainan, Xinjiang, Shandong, Guangdong: 10 days of leave per year for couples with children under three.
• Anhui: 10 days of leave per parent per year until the child turns six.
• Yunnan: 10 days of leave per year for either parent with children under three, plus an additional 5 days per year for parents with more than two children under three.
• Shanxi, Qinghai, Gansu: 15 days of leave per year for couples with children under three.
• Chongqing: Two options: (1) After maternity/paternity leave, either parent can take childcare leave until the child turns one, or (2) both parents can take 5 to 10 days of leave per year until the child turns six.

Other Leave

In China, employees are entitled to up to three days of leave in the event of the death of an immediate family member, depending on the region and the terms of the employment contract.

For marriage, employees are eligible for three to ten days of leave, with the exact duration varying by region and the employment contract.

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