China is a major hiring market, but many employment costs are set city by city, so minimum wages and social insurance bases differ between Shanghai, Beijing and Shenzhen. Enforcement has tightened. Since 1 September 2025, a Supreme People’s Court interpretation makes social insurance waivers void and lets employees resign with severance if contributions are unpaid. Public holidays rose from 11 to 13 days on 1 January 2025, when a gradual rise in retirement age also began. An amended Cybersecurity Law took effect on 1 January 2026. New social insurance bases apply from July 2026, and Shenzhen’s minimum wage rose to RMB 2,700 on 1 September 2026.
Currency: Chinese Renminbi (¥ CNY / RMB)
Language: Standard Mandarin Chinese (official and business)
Regulatory Authority: Ministry of Human Resources and Social Security (MOHRSS) and local HRSS bureaus, the State Taxation Administration, local social insurance and housing fund centres, and the Cyberspace Administration of China (CAC)
Last updated: October 2026
Set by each province, usually in tiers. Shanghai RMB 2,740 a month (from 1 July 2025), Beijing RMB 2,540 (from 1 September 2025) and Shenzhen RMB 2,700 (from 1 September 2026).
A written contract is required within 1 month of starting, or the employer owes double wages. After two consecutive fixed-term contracts or 10 years of service, the employee can insist on an open-ended contract.
1 month for contracts of 3 months to 1 year, 2 months for 1–3 years and 6 months for 3 years or open-ended. Only one probation per employee, paid at least 80% of the agreed wage.
About 26–40% on top of gross salary, including the housing fund: typically 31–33% in Shanghai, 32–40% in Beijing and 24–35% in Shenzhen. The effective rate drops sharply above the contribution cap.
5, 10 or 15 days of annual leave, based on total working years with any employer. 13 public holidays from 2025. Unused leave the employer did not let the employee take is paid at 300%.
8 hours a day and 40 hours a week under the standard system. Comprehensive or flexible hours need prior approval from the local labour bureau. Overtime is capped at 36 hours a month.
Pension 16%, medical and maternity about 6.5–9%, unemployment 0.5–0.8%, work injury by industry, plus the housing fund. Bases vary by city, e.g. Shanghai RMB 7,546–37,731 a month from 1 July 2026.
Residents pay 3–45% on annual income after a RMB 60,000 basic deduction, with monthly cumulative withholding. Social insurance, housing fund and special additional deductions reduce taxable income.
150% on working days, 200% on rest days unless time off is given, and 300% on public holidays, which cannot be replaced by time off.
No at-will dismissal. Termination for incapacity or changed circumstances needs 30 days' notice or 1 month's pay in lieu. Severance is 1 month's wage per year of service (N); unlawful termination costs 2N.
Wages must be paid in full on termination, and severance at work handover. The employer must issue a termination certificate and transfer social insurance and personnel files within 15 days.
Since 1 September 2025, agreements to waive social insurance for higher cash pay are void. Employees can later claim contributions and resign with severance. Tax and social insurance data are now matched.
2025–2026 updates
Sign a written contract in Chinese within 1 month of the start date; bilingual versions are common, but the Chinese text usually prevails. Fixed-term contracts have no maximum length, but after two consecutive fixed-term contracts the employee can insist on an open-ended one. Extensions of a year or more and automatic renewals now count toward that limit. Foreign nationals need a work permit and residence permit sponsored by a licensed Chinese entity.
Open social insurance and housing fund accounts within 30 days of hiring and register for income tax withholding. Contributions are based on the employee’s prior-year average monthly wage, kept within the local floor and cap. Employees typically contribute 15.5–22.5% of salary, including the housing fund. Withhold income tax each month on a cumulative basis. Tax and social insurance data are matched, so contribution bases must reflect real pay.
Annual leave is 5, 10 or 15 days depending on total working years. Sick employees get a protected medical treatment period of 3–24 months, with sick pay of at least 80% of the local minimum wage. Maternity leave is 98 days nationally and is extended by local regulations, as are paternity, childcare and marriage leave. A 13th-month salary is not required by law but becomes binding if promised.
Every termination needs a legal ground. Serious misconduct allows summary dismissal; incapacity or changed circumstances need 30 days’ notice or pay in lieu plus severance of N months. If the monthly wage exceeds 3x the local average wage, it is capped at 3x and service at 12 years. Pregnant employees, those on medical leave and staff near retirement are protected. Mutual termination is the most common route.
Process employee data under the Personal Information Protection Law. HR management is a recognised legal basis, and cross-border HR transfers are allowed when necessary, with larger transfers needing a standard contract filing, certification or a security assessment. Employee handbooks must go through democratic consultation and be shared with staff before they can support disciplinary dismissals. Some provinces also require a summer high-temperature allowance.
Download the full China Payroll & Employment Guide 2026 (PDF)
For detailed hiring information, customised employment guidance or support with your China hiring, please reach out to our team. We provide compliant employment contracts, payroll processing and tax remittance, social security registration and reporting, benefits administration, and onboarding and offboarding support. See our EOR pricing: flat from $349 per employee, per month.
FAQ
Yes. An Employer of Record such as StratEdge Global becomes the legal employer and handles contracts, payroll, social insurance, the housing fund, tax withholding and compliance, while you direct the day-to-day work. Paying people as overseas contractors carries labour-law and permanent-establishment risk.
No. Since 1 September 2025 such agreements are void. The employee can later claim the unpaid contributions and resign with severance.
There is no at-will termination. For incapacity or changed circumstances, give 30 days’ notice or 1 month’s pay in lieu, plus N months of severance. Unlawful termination costs 2N. Most exits are agreed as a mutual termination at N or above.
No. It is common practice, and it becomes binding if it is promised in the contract or employee handbook.
