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Find out how Remote can guide you through the complexities of managing cross-border hiring, payroll, taxes, and compliance.

Payroll management in China

China has a rapidly growing economy with key industries in manufacturing, technology, and finance. With specific labor laws and tax regulations, employers in China must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in China

Employers in China must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

  • Minimum wage: China’s minimum wage varies by region, with Shanghai having the highest at CNY 2,590 per month.
  • Payroll frequency: Salaries are generally paid monthly.
  • Standard working hours: The normal workweek in China is 40 hours, typically spread over five days.
  • Overtime: Employees are entitled to additional pay for overtime work, calculated at 150% of the regular wage for extra hours and 200% for work on rest days and 300% for work on public holidays.

Taxation and social security contributions

  • Personal income tax: China has a progressive income tax system with rates ranging from 3% to 45% depending on income levels.
  • Employer contributions:
    • Pension fund: Approximately 16% of the gross salary.
    • Medical insurance: 6% of the gross salary.
    • Unemployment insurance: 0.5% of the gross salary.
    • Work injury insurance: 0.16% to 1.52% of the gross salary (varies by region).
    • Housing fund: 5% to 12% of the gross salary (varies by city).
  • Employee contributions:
    • Pension fund: 8% of the gross salary.
    • Medical insurance: 2% of the gross salary.
    • Unemployment insurance: 0.5% of the gross salary.
    • Housing fund: 5% to 12% of the gross salary (varies by city).
  • Corporate tax: The corporate income tax rate in China is 25%, with preferential rates for small enterprises.
  • Tax reporting: Employers must file payroll taxes and contributions with the Chinese tax authorities regularly.

Payroll compliance

  • Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
  • Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
  • Employers must stay updated on changes to China’s labor laws and tax regulations to avoid penalties.

Quick facts: Important considerations for employers

  • Payroll frequency: Salaries are generally paid monthly.
  • Currency: Payroll in China is processed in Chinese Yuan (CNY).
  • Tax reporting: Employers must file payroll taxes and contributions with the Chinese tax authorities.
  • Payroll deductions: Employers must ensure accurate deductions for social security and income tax.
  • Payroll compliance: Employers must stay updated on changes to tax rates and reporting requirements.

Run payroll in China with Remote

Managing payroll in China requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties. 

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.