Minimum Wage

General

The national minimum wage in China differs per region. The most common minimum wages are:  

• Beijing 2,320 CNY
• Shanghai 2,590 CNY
• Shenzhen 2,200 CNY

Payroll

Payroll Cycle

The payroll cycle in China is generally monthly, and payments are made on the last working day.

13th Salary

In China, it is customary to pay a “13th-month” or even “14th-month” salary during the month of the Lunar New Year or Spring Holiday. This will be stipulated within the employment contract.

Working Hours

General

Standard working hours within China are 8 hours per day and 40 hours per week. The maximum number of working hours per week is 45.

Overtime

All work above the standard weekly working hours is paid as overtime and regulated by employment contract/collective agreements. In general, no more than one hour of overtime a day is permitted except in exceptional circumstances.  Overtime can increase to 3 hours a day with a maximum for the month of 36 hours.

Overtime is paid at 150.00% of the standard salary rate for weekday work, increasing to 200.00% for weekends.

Working Week

Monday-Friday

Leave

Paid Time Off

Paid leave in China is set in the employment contract and is dependent upon the years of employment. Paid leave is in addition to all public holidays.

For an employee within the first year of employment, there is no entitlement for paid annual leave. However, after completing the first year up to the tenth year, the employee is entitled to 5 days of paid leave.  This increases to 10 days for employees within 10 to 20 years of service and a maximum of 15 days paid leave for employees who have completed 20 years’ service or more.

Public Holidays

There are 11 public holidays, however, some regions have additional holidays.

Working on public holidays is uncommon in China, but if an employee is required to work the overtime payment is generallypaid at 300% of the hourly rate.  The hourly rate is calculated by using the monthly salary rate for the employee divided by 174(average number of working hours in a month).

Sick Days

Sick pay in China is outlined in the employment contract and depends on the years of employment, the actual amount of sick leave, and the provision of a professional medical certificate.  Some of the regulations regarding the calculation for sick pay are made at a local level, e.g., there are differences between Shanghai and Beijing.  However, in general, the process is as follows:

The amount of paid sick leave entitlement is based on the number of years’ service:

• Less than five years entitles the employee to 3 months sick leave
• 5 – 10 years’ service entitles the employee to between 6 to 9 months sick leave (region-specific)
• 10 – 15 years’ service entitles the employee to between 12 to 18 months sick leave(region-specific)
• 15 – 20 years’ service entitles the employee to 18 months, and more than 20 years’ service entitles the employee to up to 24 months’ sick leave.

The entitlement for sick pay payment is also based on the number of years’ service; for sick leave of fewer than six months in length, the calculation is as follows:

• Less than two years of employment- 60.00% of the regular wages
• 2-4 years of employment- 70.00% of the regular wages
• 4-6 years of employment- 80.00% of the regular wages
• 6-8 years of employment- 90.00% of the regular wages
• 8+ years of employment- 100.00% of the regular wages

The entitlement for sick pay payment is also based on the number of years’ service for sick leave of more than six months in length; the calculation is as follows:

• Less than 1 year of employment- 40.00% of the regular wages
• 1-3 years of employment- 50.00% of the regular wages
• 3+ years of employment- 60.00% of the regular wages

Maternity Leave

All female employees are eligible for maternity benefits, consisting of 98 days paid leave; this increases to 113 days for multiple or complicated births.

The maternity payment is made by the Social Security Bureau (where the employee is registered) and is based on an average monthly salary across the year preceding the due date, or 3x the minimum wage, whichever is the greater.

The maternity leave entitlement and payment generally differ per region; for example, the employer supplements the maternity pay with additional pay in Beijing.

Paternity Leave

In China, fathers are entitled to paid paternity leave of a total of 10 days, although this entitlement may differ per region.

Parental Leave

There is no statutory parental leave in China.

Other Leave

In China, In the event of the death of an immediate family member, an employee is entitled to up to three days’ leave, depending on the employment contract and region.

In the event of an employee’s marriage, an employee is entitled to between three and ten days’ leave, depending on the employment contract and region.

Termination

Termination Process

The termination process varies according to the employment agreement and collective agreement in place and is based on the type of contract, job role, region, and reason for termination.

Notice Period

Notice periods in China are generally set at 30 days, and if notice isn’t given, the employer can provide payment in lieu.

Severance Pay

In China, severance pay is mandatory if applicable. Still, the amount differs based on the length of service; an employee can be entitled to one-month regular salary pay for every year of service completed, up to a maximum of 3x the minimum wage but for no more than 12 months.

Probation Period

Probation periods in China for permanent employees are generally between 1 and 6 months.

VISA

VISA

The employer must sponsor the visa and must be an accredited company that may hire foreign employees. The employee must be a certified foreign expert in the field they will be working.

In China, there is an age limit for male and female applicants for a work visa; for male applicants, the age limit is 24-65, and for female employees, the age limit is 24-55. The employer must send a government-issued employment permit and visa notification letter to the employee, executed and submitted to the Chinese government.

A Z Visa is valid for only 30 days upon arrival, and then during this time, the employer must apply for a temporary residence permit on behalf of the employee. The Z visa is valid for 90 days up to 50 years.

Other visa options include the R Visa for highly skilled people in great demand in China and the J Visa for journalists.

The process usually takes about 8 weeks to complete.

VAT

General

The average standard rate of VAT  is 13.00%.