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In China, minimum wage will vary among the 31 provinces. Shanghai has the highest minimum wage of RMB 2.590 per month.

Some of the minimum wages are: 

• Beijing RMB 2,320
• Guangdong
  • Guangzhou RMB 2,300
  • Shenzhen RMB 2,360
• Shanghai RMB 2,590

The individual income tax in China ranges from 3% to 45%. Income tax is calculated according to progressive rates, where the tax rate increases as the gross annual income increases.

The employer cost varies by provinces and is generally estimated at 34.15%-45.50% of the employee’s salary. Employer costs have limits, so percentages may vary.

One-off cost: Mandatory Wet Ink Employment Agreement Handling Fee: USD 80

• Shanghai: 34.256% of the employee's salary
• Beijing: 40.20% of the employee's salary
• Guangdong (Shenzhen): 35.08% of the employee's salary
• Sichuan (Chengdu): 38.82% of the employee's salary
• Zhejiang (Hangzhou): 37.90% of the employee's salary
• Jiangsu (Nanjing): 39.10% of the employee's salary
• Anhui (Hefei): 36.80% of the employee's salary
• Hubei (Wuhan): 39.10% of the employee's salary
• Guangdong (Guangzhou) - 34.15%
• Tianjin - 41%
• Chongqing - 39%
• Hunan - 39.30%
  
• Shaanxi - 38.40%
  

Employer costs:

• Pension Fund - 16%
• Health Insurance - 6.40-10%
• Unemployment Fund - 0.50%
• Work Injury Fund 0.20 -0.40%
• Maternity Leave - 1%
• Housing Fund - 7%
• Disability Fund - 0.50-1.60%

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday. However, the work week can be extended to 6 days, and 44 hours per week.

Overtime payment is mandatory. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 3 hours of overtime a day. For additional hours, employees are paid:

• 150% of the hourly rate, during workdays.
• 200% of the hourly rate, on weekends.
• 300% of the hourly rate, on holidays.

Employees can work up to 36 hours of overtime per month.

Female employees in China are entitled to 120-158 calendar days of maternity leave, depending of the location. Maternity leave includes 15 days before giving birth. The government pays the employee's average monthly salary during the leave period, and the employer pays any shortfall.

The employee can extend the leave for an additional 15 days for difficult labor and six and a half months of breastfeeding leave if approved by the company. During the breastfeeding leave, the salary will be 80% of the employee's previous monthly actual salary, and the employer is responsible for the payment.

Maternity leave in the main locations

Employees who have worked for the same employer for at least one year and have a labor contract or a service agreement with the employer are entitled between 7 - 30 days of paid paternity leave, depending on the location. The leave must be taken within 30 days of the birth of the child. During paternity leave, the employee receives 100% of the salary, which is paid by the employer.

Depending on the location of the employee, paternity leave may be extended. 

If there is no specific length mentioned for any province, the employee is entitled to 15 days.

Parental leave varies based on the region that the employee is based in. Employees in Beijing and Shanghai are entitled to 5 days of parental leave each year until their child turns 3 years old. Both parents can take this leave and decide how to distribute the time off. For specific salary settlements, most regions provide base salary during statutory parental leave.

Other regions:

Sick leave in China is very complex. Employees are entitled to paid sick leave for up to 180 days. This leave is paid at different rates and by different payers depending upon length and length of service. 

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in China can be complex. There is no at-will termination in China for employers, outside the probation period, and termination must be done for just cause.

Terminations will vary on the province and region. 

In Shanghai, China can be complex, there is no at-will termination for employers, and termination must be done for just cause.

Compliant terminations in Shanghai include:

• Voluntarily by the employee: An employee can resign from their job at any time by providing notice to the employer.
• By mutual agreement: An employer and employee can mutually agree to terminate the employment relationship.
• Unilaterally by the employer based on:
  • Probation period: During the probation period, an employer can terminate the employee providing reasoning and cause.
  • Objective grounds: An employer can terminate an employee for objective reasons, such as redundancy or restructuring.
  • Disciplinary dismissal: An employer can terminate an employee for disciplinary reasons, such as serious misconduct.
  • Performance due to unsuitability for the job: An employer can terminate an employee if they are found to be unsuitable for the job after an evaluation process.
• By expiration of the contract: If the employment contract has a fixed term, the employment relationship will automatically terminate upon expiration of the contract, unless it is renewed or extended by mutual agreement.

In China, severance pay is based on the length of employment with the same employer, and can have variations based on the province and region.

Severance pay in Shanghai will depend on the reason for termination and the employee's years of service.

• Termination without cause:
  • Less than six months: half a monthly salary.
  • More than six months: one month's salary for each full year of service, up to a maximum of 12 months' salary.
• Termination for serious breach of employment contract by the employee: no severance pay is required.
• Termination due to mutual agreement between the employer and the employee: severance pay is negotiable.

For fixed-term contracts, severance pay is calculated at the rate of one day's salary for each completed year of service.

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Both full-time and part-time employees are entitled to 5 working days of paid time off (PTO) a year. PTO accrues monthly at 0.42 days per month.

Employees are entitled to their time off after one year of employment.

Paid time off can increase based on the employee’s cumulative working years, which will include hours worked for the same or different employers:

• Less than 10 years, 5 days working days
• More than 10 years, and less than 20 years, 10 working days
• More than 20 years, 15 working days

China celebrates both 7 national holidays, over 11 days. National public holidays include:

• New Year Holiday
• Spring Festival
• Ching Ming Festival
• Labour Day Holiday
• Dragon Boat Festival
• Mid-Autumn Festival
• National Day Holiday

China also contemplates additional holidays based on religion and region.

Contracts must be in English and/or  a national language (Chinese) and can be bilingual. They must be in writing and signed by both parties.

Language and conditions of employment agreements will vary based on the location of the employee. 

A contract must include:

• Name
• Start date
• Length of the employment
• Position and responsibilities
• Working hours
• Remuneration, labor protections, and labor insurance
• Termination conditions

In Shanghai, it is permissible to establish employment agreements in English provided that both parties consent to it.

In China, probation periods in China will vary on the length of the employment: 

1. • Less than 1 year: probation may not exceed one month.
   • 1-3 years: probation may not exceed two months.
   • 3 or more years: probation may not exceed six months.

Probation period details can vary depending on the location where the employee is hired.