China Payroll Guide
HR & Payroll in China
Good to know
- National currency: Chinese yuan renminbi (CNY), also known as Yuan.
- Minimum wage: Varies by region. For example, in Shanghai, the minimum monthly wage is CNY 2690 in 2025.
- Fiscal year: 1 January – 31 December
- Legal working hours: 8 hours a day / 44 hours a week on average
About China
China ranks as the world’s second-largest economy by nominal GDP and the largest by purchasing power parity (PPP). As a global leader in manufacturing, it plays a pivotal role in international supply chains, particularly in electronics, consumer goods, and industrial production
Income tax in China
China’s tax system operates on a progressive rate structure applied to monthly taxable income.
The employer is obliged to withhold the monthly Individual Income Tax (IIT) from the employee’s payroll on a monthly basis and settle the IIT on behalf of the employee.
The employer should file the withholding ITT return to the local tax bureau and settle the ITT payable before the 15th of the following month in general
China ranks as the world’s second-largest economy by nominal GDP and the largest by purchasing power parity (PPP). As a global leader in manufacturing, it plays a pivotal role in international supply chains, particularly in electronics, consumer goods, and industrial production
| Taxable monthly income (CNY) | Tax rate |
|---|---|
| 0 to CNY 36,000 | 3% |
| Over CNY 36,000 to CNY 144,000 | 10% |
| Over CNY 144,000 to CNY 300,000 | 20% |
| Over CNY 300,000 to CNY 420,000 | 25% |
| Over CNY 420,000 to CNY 660,000 | 30% |
| Over CNY 660,000 to CNY 960,000 | 35% |
| Over 960,000 | 45% |
Specific additional tax deductions
China residents are eligible for the following specific additional tax deductions, if applicable.
Children’s education.
Occupational education • Medical expenses for serious illness.
Housing loan interest.
Housing rent.
Supporting the elderly.
Social security in China
Social Insurance is governed under the social security the Social Insurance Law of China. Housing Fund contributions is governed under the Administration Regulations on the Housing Fund in China.
The employer has the obligation to enroll its employee in the social insurance system. Each month, the employer shale
file the social insurance and housing fund contributions for employer and employees with the respective authorities for its active employees and arrange payments on time.
The Social Insurance Law of the People’s Republic of China governs the country’s mandatory social insurance system. It establishes the legal framework for five core types of insurance:
Pension (endowment)
Medical
Unemployment
Work injury
Maternity insurance
Both employers and employees are required to make regular contributions to these schemes. These contributions help provide financial protection for employees across different life events, including retirement, illness, injury, job loss, and childbirth.
Contribution rates, calculation methods, and applicable salary caps are regulated by local authorities. As a result, specific requirements may vary depending on the city or province where the employment relationship is based. The following are the approximate rates are for China Social Security System:
| Category | Employer | Employee |
|---|---|---|
| Pension (endowment) | Around 16% | Around 8% |
| Medical | 5% – 12% | Around 2% |
| Unemployment | 0,5% – 1% | Around 0,5% |
| Work injury | Up to 2% | – |
| Maternity insurance | Up to 1% | – |
| Housing fund ( Designed to ensure that workers save to purchase housing | 5% and 12% | 5% and 12% |
Collection
The local tax bureaus—operating under the supervision of the State Administration of Taxation. Employers are responsible for calculating and withholding IIT from employees’ salaries every month and remit the tax to the local tax bureau. Social insurances are handled contributions are handled by Local Social Insurance Bureaus, not SAT. These bureaus operate at municipal or district levels and report to the China Ministry of Human Resources and Social Security (MOHRSS).
According to the social insurance regulations in China, the employer should register a company’s social insurance account at the Social Security Bureau in the city where the legal entity is located, within 30 days after obtaining the business license.
Taxable income
Our HR & Payroll Experts are Ready to Help
Payroll and HR are different in each country and to each business. Trust one of our local experts to ensure your company’s compliance in China .
Our Payroll and HR services in China
- Implementation and testing of the software
- An understanding of your individual business payroll processes
- Online payslips & payments
- A dedicated payroll expert
- Data entry & processing
- Payslip distribution
- Personnel & document production
- Legislation compliance
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Sources : https://www.china-briefing.com/doing-business-guide/china/human-resources-and-payroll/social-insurance
- https://www.chinatax.gov.cn/eng/home.html
- https://www.china-briefing.com/doing-business-guide/china/taxation-and-accounting/individual-income-tax#:~:text=IIT%20is%20imposed%20on%20all,or%20deriving%20income%20from%20China.&text=The%20comprehensive%20income%20is%20subject,progressive%20rates%20on%20the%20whole.
- https://taxsummaries.pwc.com/peoples-republic-of-china/individual/other-taxes
- https://www.chinatax.gov.cn/eng/home.html
- https://www.imf.org/en/Publications/WEO
- Loi sur le travail, article 36
- https://www.wto.org/french/res_f/reser_f/wts2023_f/wts2023_f.htm
- https://www.ilo.org/global/about-the-ilo/how-the-ilo-works/multilateral-system/country-profiles/lang–en/index.htm
- https://www.worldbank.org/en/country/china
- https://home.kpmg/cn/en/home/insights.html
- https://www.cecc.gov/resources/legal-provisions/labor-law-of-the-peoples-republic-of-china
- https://www.china-briefing.com/news/china-income-tax-rates/
- https://www.china-briefing.com/news/china-social-security-system-explained/