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Employer of Record China
Hire staff and expand your business in China with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in China designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in China. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in China takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in China
A Brief Guide to China
China, located in East Asia, is a country known for its rich history, cultural diversity, and remarkable economic growth. With a vast territory spanning over 9.6 million square kilometers, China is the world’s most populous nation, with a population exceeding 1.4 billion people. The official language is Mandarin, and the capital city is Beijing. The country’s currency is the Chinese yuan (CNY).
Category | Information |
Location | East Asia |
Capital City | Beijing |
Official Languages | Mandarin |
Area (sq. km) | 9,600,000 |
Population | 1.4 billion |
Currency | Chinese yuan (CNY) |
Major Cities | Shanghai, Guangzhou, Shenzhen |
GDP | $17.7 trillion (2021) |
Major Industries | Manufacturing, technology, automotive, retail, e-commerce |
Business Culture
Business Culture in China
China’s business culture is influenced by its rich history and Confucian principles, emphasizing respect, hierarchy, and building relationships. In business meetings, it is customary to exchange business cards, and formal attire is expected. Punctuality is essential, as is showing deference to senior executives. Building trust and cultivating relationships are crucial for successful business dealings. Direct communication is often indirect, and it is advisable to maintain politeness and avoid confrontations. Understanding and respecting Chinese cultural norms and traditions are vital for establishing long-term business partnerships.
Payroll and Taxes
Payroll and Taxes in China
Although not legally required, it is customary for employees in China to receive a 13th month salary payment. The exact amount and timing will depend on the employment contract, but a months pay at the time of Lunar New Year is common.
Employee Taxation
In China, income tax rates are progressive, with higher income levels subject to higher tax rates, as follows:
Annual Taxable Income (CNY) | Tax Rate |
0 – 36,000 | 3% |
36,001 – 144,000 | 10% minus 2,520 CNY |
144,001 – 300,000 | 20% minus 16,920 CNY |
300,001 – 420,000 | 25% minus 31,920 CNY |
420,001 – 660,000 | 30% minus 52,920 CNY |
660,001 – 960,000 | 35% minus 85,920 CNY |
960,001 + | 45% minus 181,920 CNY |
Employer Taxation
Employers in China are required to make contributions to various social security funds, with contribution rates being dependent on the area. Some examples of rates are as follows:
| Contribution Rate | ||
Fund Type | Beijing | Shanghai | Guangzhou |
Pension | 16% | 16% | 15% |
Healthcare & Maternity | 9.8% | 10% | 6.85% |
Unemployment | 0.5% | 0.5% | 0.32% to 0.8% |
Occupational Risk | 0.2% to 1.9% | 0.16% to 1.52% | 0.16% to 1.12% |
Housing Fund | 12% | 7% | 5% – 12% |
Pension and Healthcare
China Pensions
Pension provision in China is overseen by the Ministry of Human Resources and Social Security (MHRSS). The country operates a mandatory social security system that includes a basic pension scheme. Both employers and employees contribute to this scheme, with contributions based on salary levels. Additionally, there are supplementary pension plans available for individuals to further support their retirement savings. The government funds the basic pension scheme through a combination of employer and employee contributions, as well as investment income. Expanding businesses in China should consider complying with the country’s pension regulations to ensure appropriate employee benefits.
Healthcare in China
China has a comprehensive healthcare system that combines public and private elements. The government is committed to improving healthcare accessibility and affordability for its citizens. Public healthcare is primarily provided through a tiered system consisting of community health centers, county hospitals, and tertiary hospitals. Citizens contribute to a national health insurance scheme that helps cover medical expenses. Private healthcare facilities and services are also available, offering more specialized care and shorter waiting times.
Healthcare accessibility varies across the country, with major cities typically having better healthcare facilities. However, overcrowding and longer waiting times are challenges in some areas. The quality of care in China’s top hospitals is generally high, with well-trained medical professionals and advanced technology. Expanding businesses should consider offering health insurance to employees to ensure their well-being and access to quality healthcare. Understanding the local healthcare system and partnering with reputable healthcare providers can support employees’ health needs in China.
Employment Law
Employment Law in China
Relevant Legislation: The most relevant pieces of legislation governing employment law in China include the Labor Law of the People’s Republic of China, the Employment Contracts Law, and the Social Insurance Law. These laws provide the legal framework for various aspects of employment, including contracts, working hours, leave, termination, notice, and severance pay.
Employment Contracts: Employment contracts in China are typically written agreements between employers and employees. These contracts should clearly specify the terms and conditions of employment, including job responsibilities, working hours, compensation, benefits, and termination procedures. Contracts can be fixed-term or indefinite, depending on the nature of the employment.
Working Hours: The standard working week in China is 40 hours, with a maximum of eight hours per day. However, specific working hours may vary depending on the industry and regional regulations. Overtime work may be required in certain circumstances, subject to limitations and proper compensation.
Leave: Mandatory leave requirements in China include annual leave, maternity leave, and public holidays. Employees are entitled to paid annual leave based on their length of service, typically ranging from 5 to 15 days per year. Maternity leave is granted to female employees for a specified duration before and after childbirth, with varying allowances based on local regulations.
Overtime: Overtime work refers to hours exceeding the standard working hours. Chinese labor laws specify limits on overtime to protect employee rights and ensure fair compensation. Generally, overtime work should not exceed three hours per day or 36 hours per month. Overtime should be compensated at a higher rate than regular work hours, typically at 150% or more of the regular wage.
Termination: Termination of an employee in China can occur due to various reasons, including performance issues, serious misconduct, or economic reasons. However, employers must follow proper procedures, such as providing written notice and opportunities for improvement or hearings, depending on the circumstances. Employers should be cautious to comply with legal requirements and seek legal advice when terminating employees.
Notice: Employers are generally required to provide written notice when terminating an employee. The notice period varies based on the length of service and other factors, such as the reason for termination. In some cases, employers may need to provide compensation in lieu of notice.
Severance Pay: Employers may be required to provide severance pay when terminating an employee, especially in situations like redundancy or contract expiration. The amount of severance pay depends on factors such as the employee’s length of service and salary level. Local labor laws or collective agreements may further regulate severance pay.
IMMIGRATION
Work Permits in China
The immigration system in China is administered by the National Immigration Administration (NIA), which oversees the entry, stay, and employment of foreigners in the country. China has specific regulations and visa categories designed to accommodate different purposes of visit, including work, business, study, and tourism.
For individuals seeking employment in China, the primary type of visa is the Z visa. This visa is typically issued to foreign nationals who have secured a job offer from a Chinese employer. To obtain a Z visa, applicants must provide relevant documentation, such as an invitation letter from the employer, a work permit, and a valid passport. The employer plays a crucial role in assisting with the visa application process by acting as a sponsor and providing the necessary paperwork.
Other common visa categories include:
- M Visa (Business Visa): This visa is suitable for individuals engaged in commercial or trade activities, such as attending business meetings, conferences, or exploring potential business opportunities in China.
- X Visa (Student Visa): Intended for foreign students pursuing education in China, the X visa requires an acceptance letter from a recognized educational institution in China.
- L Visa (Tourist Visa): The L visa is for individuals visiting China for tourism or personal reasons. It does not permit employment, but it allows for short-term stays and exploration of the country’s cultural and historical attractions.
It’s important to note that visa requirements and processes may vary depending on the applicant’s nationality, the intended duration of stay, and the specific circumstances of the visit.
Public Holidays
China Public Holidays
Holiday | Date |
New Year’s Day | January 1 |
Chinese New Year | Variable |
Tomb-Sweeping Day | April 4-6 |
Labor Day | May 1 |
Dragon Boat Festival | Variable |
Mid-Autumn Festival | Variable |
National Day | October 1-7 |
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The Benefits
China Employer of Record Benefits
When you choose Agility EOR to expand in China, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in China so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Chinese authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning China payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.