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EOR IN China
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A guide to employing and growing your team in China
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China is the worlds second-largest economy and a global leader in manufacturing, high-tech innovation, and e-commerce. Its labor market is vast and increasingly sophisticated, shifting from a traditional manufacturing focus to advanced services, AI, and green technology. Employment is governed primarily by the Labor Contract Law, which provides strong protections regarding written contracts, social security, and severance. China does not have a single national minimum wage; instead, rates are set locally by provinces and cities. As of January 1, 2026, the highest monthly minimum wages are found in major hubs like Shanghai (CNY 2,740), Beijing (CNY 2,540), and Shenzhen (CNY 2,520), while lower-tier regions generally range between CNY 1,690 and CNY 2,100 per month.
Employer Contributions
Pension Insurance: 16%
Medical Insurance: 6% – 10%
Unemployment Insurance: 0.5% – 1%
Work Injury Insurance: 0.2% – 1.9%
Maternity Insurance: 0.5% – 1%
Housing Fund: 5% – 12%
Total Employer Contribution: ~25% to 35%
Employee Payroll Taxes
Pension Insurance: 8%
Medical Insurance: 2%
Unemployment Insurance: 0.2% – 0.5%
Housing Fund: 5% – 12%
Total Employee Contribution: ~10% to 20%
Employee Income Tax Rates
Up to 3,000 CNY: Taxed at 3%
3,000 to 12,000 CNY: Taxed at 10%
12,000 to 25,000 CNY: Taxed at 20%
25,000 to 35,000 CNY: Taxed at 25%
35,000 to 55,000 CNY: Taxed at 30%
55,000 to 80,000 CNY: Taxed at 35%
Above 80,000 CNY: Taxed at 45%
Statutory Leave
In China, employees are entitled to annual leave based on years of service: 5 days for 1–10 years of service, 10 days for 10–20 years, and 15 days for 20+ years. Additionally, employees receive 11 public holidays per year.
Pregnancy and Maternity Leave
In China, the standard maternity leave is 98 days, which can be extended up to 128–180 days depending on the province. Maternity leave is paid through maternity insurance.
Paternity Leave
In China, paternity leave typically ranges from 3 to 15 days, depending on the province. The leave is usually paid, but the payment terms may vary based on local regulations.
Other leaves
In China, sick leave is paid based on tenure and local rules, with compensation ranging from 60% to 100% of salary. Work injury leave is covered under work injury insurance, which includes compensation for medical expenses and wage replacement. Marriage leave is typically 3 days, though it can vary regionally. Bereavement leave is usually between 1 to 3 days, depending on the region.
Termination Process
Employers must provide valid legal grounds for termination under Chinese labor law. Termination without cause is restricted, and severance payments are typically required. Mutual agreement is a common method of ending employment.
Notice Period
Standard: 30 days’ written notice
Or payment in lieu of notice
Probation Period
Depends on contract duration:
Less than 1 year: up to 1 month
1–3 years: up to 2 months
More than 3 years or open-ended: up to 6 months