Chinese payroll process and HR come to the attention of our specialists who can offer you the services you need for the company you own in this country. In this approach, the progressive tax system and precisely the individual income tax that ranges from 3% to 45% rate is taken into account. In the following lines, you will find important information about payroll in China so that you can get an idea about this, with the mention that you can contact one of our accountants in China.
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Payroll procedures in China
Payroll services in China involve various procedures with the help of which salaries are calculated and distributed in the accounts of a company’s employees. The specialists in the Chinese payroll process use dedicated software and platforms for calculating salaries, taking into account the number of hours worked and related taxes. Below are other important aspects:
- Social security contributions are paid by the employee and the employer.
- Once these are calculated, the payslips are drawn up.
- Payslips include information about gross salary, related taxes, price, and net salary. Once drawn up, they go to the finance and management department for approval.
- With the help of programs dedicated to the Chinese payroll process, salaries are delivered to employees’ accounts, according to the rules established by the employing company.
Payroll services in China are important for a company, and if you need support in this regard, we recommend that you contact one of our accountants in China. We also help international investors start a business in China by handling the formalities.
What are the contributions paid by the employee and the employer in China?
Both the employee and the employer must pay certain contributions to the state, as follows:
- Health fund – 2% employee, 3-12% employer.
- Pension fund – 8% employee, 14% – 22% employer.
- Occupational injury – 0.4% – 3% paid only by the employer.
- Housing fund – 5%-25% by both employee and employer.
Individual income tax is added to the above taxes, which varies according to income. Thus, for incomes between CNY 3,000 (1 CNY = 0.15 USD) and CNY 12,000, the tax is 10%. If the income exceeds the amount of CNY 80,000, a tax of 45% and a deduction of approximately CNY 15,160 is applied.
We recommend those interested in payroll outsourcing in China contact us to find out all the information.
Employment contract in China
Employers are obliged to offer workers employment contracts. These can be part-time, full-time, fixed-term, or open-term agreements. Such a contract must provide information about the employer, the type of work performed, working hours, payment for extra work, the conditions under which the work is carried out, as well as those in which such an employment contract can be concluded.
We mention that in the case of foreign employees in Chinese companies, a work and residence permit in China is needed, depending on the country they come from.
Feel free to contact us for extra details about payroll in China and the implicated procedures.
The minimum wage in China
According to the latest data, the minimum wage in China is approximately USD 400 per month, and this is valid in Shanghai. However, it should be mentioned that minimum wages differ depending on the region. For example, in regions such as Beijing, Hebei, Jiangsu, and Shandong, the minimum wage is set at around USD 308 per month. Approximately USD 226 is the minimum wage in Guangxi, and USD 224 is in Liaoning.
Are you interested in payroll services in China and want to collaborate with our specialists? You can contact us by phone or online to find out all the information about the Chinese payroll process that can be implemented for the company you own.