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Minimum wage in China
Payroll in China
Statutory benefits in China
Other employee benefits in China
Payroll and benefits in China
Every country has its own rules and regulations when it comes to payroll — and understanding them is key to managing a compliant workforce. Payroll in China involves withholding income tax and social security contributions from employee salaries and submitting these payments to the relevant authorities. Employers must also ensure timely wage payments, issue payslips, and keep accurate payroll records.
This section covers the key aspects of payroll in China, including minimum wage regulations, tax rates, and social security contributions. We will also explain the statutory benefits all employees are entitled to, as well as additional benefits employers can offer to attract and retain talent. With this knowledge, you can ensure compliance with Chinese labour laws while providing a competitive payroll and benefits package for your employees.
Minimum wage in China
Minimum wages are the lowest amount employers can pay employees for their work. They’re set by governments and meant to ensure everyone has access to a decent standard of living. They may be adjusted based on inflation and may apply specifically to certain sectors or industries. Read on to learn what you need to know about minimum wages in China.
Does China have a minimum wage?
Because the cost of living is very different in different parts of the country there is no national minimum wage in China. Instead, minimum wages are set at the local level. They may be defined as either a monthly or hourly rate and can vary significantly between cities and provinces.
Highest minimum wages in China
As of 2025, Shanghai has the highest monthly minimum wage among China’s 31 provinces. It is set at CNY 2,740 (approximately EUR 332 or USD 381). The region with the highest hourly minimum wage is currently Beijing, where employees must be paid at least CNY 27.7 per hour (approximately EUR 3.36 or USD 3.86).
Payroll in China
Every country in the world has its own rules, regulations and cultural expectations when it comes to payroll — and employees should be aware of them to both ensure compliance and meet employee expectations. Read on to learn what you need to know about payroll in China.
Basic payroll requirements in China
Employers in China must pay their employees at least monthly, with payments generally being made at the end of the month. If the agreed payment date falls on a non-business day, the payment must be made on the last working day before this date.
Payments to employees are typically made by direct deposit, which requires a local bank account. Employers must also provide employees with payslips (in either paper or digital format) and keep payroll records for at least five years.
Social security contributions in China
Social security contributions from both employers and employees are an important part of payroll in China. However, exact rates vary by province. For example, in Beijing, the employer portion amounts to between 26.5% and 28.2% of salary, while employees pay 10.5%. In Shanghai, the contribution rates are between 25.66% and 27.02% for employers and 10.5% for employees. Contributions pay for things like pensions, medical insurance, unemployment, and work-related injuries.
Income tax in China
Employees must also pay income tax on their income from employment. This is paid according to a progressive scale depending on income level, at the following rates:
- Income below CNY 36,000: 3%.
- Income of CNY 36,000–144,000: 10%.
- Income of CNY 144,000–300,000: 20%.
- Income of CNY 300,000–420,000: 25%.
- Income of 420,000–660,000: 30%.
- Income of CNY 660,000–960,000: 35%.
- Income over CNY 996,000: 45%.
Chinese employers are responsible for withholding the correct taxes from employees’ wages and remitting them to the tax authorities.
13th salary in China
While not mandatory, the 13th salary is customary in China. This is an additional payment equivalent to one month’s wages, which is usually paid out in February just before Lunar New Year celebrations. Some employers also pay a 14th salary. These additional payments should be mentioned in the employment contract.
Statutory benefits in China
Employees in China have the right to certain mandatory benefits by law. Many of these are provided through the social security system, which is funded by contributions from both employers and employees. There are also some benefits which employers in China must provide to their employees directly — read on to learn what you need to know.
Social security benefits in China
China has a comprehensive social security system, which is made up of five social insurances plus a mandatory housing fund. Employers must register employees for these schemes and make contributions based on each employee’s income (employees also contribute a portion of their wages).
The five social insurances are:
- Pension insurance: Provides employees with an income when they retire.
- Medical insurance: Covers healthcare costs for employees and their families.
- Unemployment insurance: Provides temporary income during unemployment.
- Work injury insurance: Provides compensation for work-related illnesses or injuries.
- Maternity insurance: Provides maternity pay for employees when they give birth.
The mandatory housing fund in China
In addition to the insurances listed above, employers and employees in China both contribute to a mandatory housing fund. This is a long-term savings plan that employees can use to purchase, build, or renovate a home. In some circumstances, it can also be used to cover rental payments.
Other mandatory benefits in China
Other statutory benefits in China must be provided by the employer directly. These include:
- Annual leave: Employees in China have the right to between five and 15 days of paid leave for vacations, depending on their length of service. There are also seven official public holidays per year, some of which last several days.
- Sick leave: Employees can get between three months and two years of sick leave, depending on their length of employment, local regulations, and insurance contributions. This is paid at a rate of between 60% and 100% of normal salary.
- Other leave: Employees in China also have the right to other types of leave, including maternity, paternity, and parental leave, as well as bereavement leave, marriage leave and more. Some of these are unpaid, while others are paid directly by the employer or funded through the social security system.
Other employee benefits in China
Employers in China can choose to offer additional benefits to their employees, even if they’re not required by law. This can help employers to attract and retain talent, particularly in large multinational businesses where comprehensive benefit packages may be expected. Read on to learn about some of the most common additional employee benefits in China.
Supplementary health insurance in China
Many employers provide private health plans to supplement mandatory medical insurance. These plans typically include coverage for private hospitals, faster claims processing, dental, vision, and sometimes family dependents.
Supplementary pensions in China
Some organisations in China offer enterprise annuities — voluntary pension plans jointly funded by employers and employees. These tax‑advantaged plans help bolster retirement savings beyond basic public pension income and are increasingly viewed as a competitive addition to employee benefits in China.
Additional paid time off (PTO) in China
Employers may grant extra paid leave beyond statutory entitlements, often increasing with seniority or length of service. These additional days support work‑life balance and enhance overall employee benefits in China, especially for professionals in urban and multinational firms.
Performance bonuses in China
Performance bonuses — such as a ‘13th month’ salary or annual incentive payments — are widely expected in sectors like finance, tech, and sales. While these are usually provided at the employer’s discretion, they are common and expected by employees.
Flexible working arrangements in China
Flexible hours, hybrid schedules or remote work (with optional home office cost reimbursements) are now common perks. These flexible benefits support urban professionals seeking work‑life balance and are increasingly included in modern employee benefits packages in China.
Housing, meal, and transport allowances in China
Many employers in major cities offer allowances for housing, meals, transport or relocation — especially for senior or expatriate hires. These perks enhance employee benefits in China by addressing cost-of-living pressure and improving staff retention.
Professional development support in China
Employers often provide training budgets, tuition subsidies or access to e‑learning platforms for employee growth. These development-focused benefits strengthen career progression and are valued additions to employee benefits packages in China.
Compliant, seamless payroll and benefits in China and beyond
Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.
Thankfully, we know what we’re doing. When you work with CXC to engage workers in China, we’ll handle everything from tax withholding to employee bonuses on your behalf.
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