CHINA PEO & EOR
Hire in China without a local entity today
As a Global PEO & EOR service provider, we pride ourselves on our global reach, in-country knowledge, and ability to swiftly and efficiently mobilize workers around the world. Our robust PEO/EOR covers everything from global HR, payroll, compliance, in-country support, immigration, visas, and more.
Get started and hire in China today with Gibson Watts Global.
DID YOU KNOW
- China has the biggest population worldwide, and its native language Mandarin is the most spoken language globally
- China is set to become the biggest economy globally, with some estimates pointing at China surpassing the US by 2028
- Tea was discovered in China, initially used as a medicine in the 10th century. Toilet paper was also invented in China in the 6th century.
Forget software,
this is expansion
with a human touch
CHINA PEO Services
Unprecedented economic growth since the turn of the millennium
Working in China
Employment Information
Some of China’s main cities for working include Beijing, Shanghai, Shenzhen and Guangzhou; all of which are highly vibrant cities, which offer fascinating experiences for expats. Outside of the main cities, China also boasts beautiful and unique landscapes in the countryside, which it is essential to explore when in the country.
The biggest industries in China (in terms of revenue) are telecoms, manufacturing and agriculture, however the country is notable for its fast-growth in a number of other industries.
China typically utilises a Monday to Friday 5-day working week. Chinese labour law also posits that employees must not work more than 40 hours per week.
In China, the standard salary structure/offer package is:
- Gross salary: a salary with a fixed base
- Salary flexibility: performance bonus, commission, and allowances
- 13-month salary/annual bonus: this is particularly common in China
- 5 social insurances and 1 housing fund are required benefits
- Supplemental health insurance is not mandatory, but it is very common among foreign employers
- Annual paid leave and sick days are essential
With China’s rapidly evolving market, some companies have adopted a “996” work culture. The term “996” refers to an unofficial work schedule that requires employees to work from 9am to 9pm, six days a week. This equates to 72 hours of work per week, significantly exceeding standard working hours. The 996 system is widely practiced, allowing businesses to accelerate their development and reduce costs. This work life culture has a major impact on employee health, work-life balance and labour practices.
Overtime
Overtime is normally paid for anything worked over 40 hours at a rate of 150% minimum of the employee’s basic salary.
Holiday Allowance
Employees are entitled to 5 days’ annual leave after 1 year’s continuous employment. During the first 12 months, the employee is entitled to no annual leave. After 10 years, the holiday allowance is increased to 10 days.
Sick Leave
Employees are entitled to sick leave varying from 3 to 6 months based on the length of their employment and severity of their illness or injury.
Total work experience from all employers | Tenure with current employer | Maximum sick leave entitlement |
Less than 10 years | Under 5 years | 3 months |
Over 5 years | 6 months | |
Over 10 years | Under 5 years | 6 months |
5-10 years | 9 months | |
10-15 years | 12 months | |
15-20 years | 18 months | |
Over 20 years | 24 months |
Maternity & Paternity Leave
All pregnant women in China are guaranteed a minimum of 98 days’ paid maternity leave by the government. However, most provinces allow between 128 and 190 days in total.
Province | Total number of days (basic + extended) |
Henan and Hainan | 190 days |
Gansu, Heilongjiang and Fujian | 180 days |
Guangdong, Chongqing and Guangzhou | 178 days |
Guangxi | 148 days |
Tianjin and Jiangsu | 128 days |
Other regions (including Beijing & Shanghai) | 158 days |
Leave can begin up to 15 days before the expected due date. Foreign workers are entitled to the basic 98-day maternity leave but not any extensions.
Public Holiday
Public holidays in Urumqi and Yinchuan
China celebrates three separate Golden Weeks per year, which are extended national holidays, implemented in 2000.
Urumqi and Yinchuan
- New Years Day (1-day holiday), in January or February
- Chinese New Year (8-day “Golden Week” holiday), begins in January or February
- Ching Ming (3-day holiday), early April
- Labour Day (5-day “Golden Week” holiday), begins May 1st
- Dragon Boat Festival (1-day holiday), late May or early June
- Eid al-Adha (3-day holiday), in June
- Mid-Autumn Festival (3-day holiday), mid-September or early October
- National Day (7-day “Golden Week” holiday), begins around October 1st
Urumqi only
- Eid al-Fitr (2-day holiday), in April
Yinchuan only
- Rouzi Festival (1-day holiday), in April
Hiring Employees in China
When employing staff in China, your monthly employment costs will include:
- Employee’s monthly net salary
- Employer’s contribution towards mandatory benefits
- Employee contribution towards mandatory benefits
- Allowances
- Individual income tax
- Other benefits
Social Contributions
When employing workers in China, one of the most crucial elements to consider is social security. Social security in China encompasses five distinct types of insurance, as well as a housing fund. Pension, medical, unemployment, work-related injury, and maternity insurances make up the five insurances that must be covered. Contribution rates depend on the province.
Social security contributions are mandatory for anyone working in China. Expatriates on either direct employment, overseas dispatchment or self-employment are required to contribute.
The employing organisation should handle Social Security registration within the first 30 days of issuing employment documents. Self-employed individuals are required to cover their own Social Security payments.
Expatriates who leave China before benefiting from their pension are allowed to keep their personal accounts, to be resumed if they return to work again in China. If the expatriate doesn’t wish to utilise their pension contributions, they can withdraw their pension account by form of a lump sum, via written application. The lump sum will only include what the expatriate contributed from their monthly salary. Any contributions my by their former employer will be kept by China and would be non-refundable.
Income Tax
Chinese tax residents (Chinese residence or individuals who have resided in China for more than 183 aggregated days in a tax year) must file their annual Individual Income Tax (IIT) for 2023 from 1st March 2024 – 30th June 2024.
China’s IIT Law groups personal income into 9 categories which have their own tax rates and allowable deductions; they are:
- Employment Income
- Remuneration for labour services
- Author’s remuneration
- Royalties
- Business income
- Interest, dividends and profit distribution
- Rental income
- Income from the transfer of property
- Incidental income
Health Care
Chinese citizens can access universal healthcare through a variety of government supported and mandated health insurance plans.
- Urban Employee Basic Medical Insurance (UEBMI) – mandatory for urban residents in employment. Paid with employer and employee contributions
- New Cooperative Medical Scheme – voluntary for urban residents
- Urban Resident Basic Medical Insurance – voluntary insurance for urban residents who are unemployed
- Private health insurance – Usually required by foreigners in China, also used by Chinese citizens to supplement the government-mandated schemes.
Most Chinese citizens utilise the UEMBI government supported public health insurance policy.
Visas
Until 31st December 2024, foreign nationals from Australia, Austria, Belgium, France, Germany, Hungary, Ireland, Italy, Luxembourg, Malaysia, New Zealand, Poland and Switzerland are permitted to travel Visa-fee to China for no more than 15 days.
- A new Travel Permit allows foreign nationals who are permanent residents of Macau SAR and Hong Kong SAR, multiple entry and exit to Mainland China. Eligible people can apply for a new Mainland Travel Permit, which is an electronic card-type travel document. The permit is valid for 5 years and allows stays of up to 90 days at a time.
Fingerprinting has been temporarily exempted until 31st December 2025 for foreign nationals seeking either single-entry, double-entry or short-term visas for less than 180 days.
“A China PEO or EOR provider can also provide guidance on this process. A PEO or EOR can provide a payroll solution in China, so that workers can easily set up in China and businesses can easily place workers in-country.”
13th Salary
In China, 13th salary payment is a common practice. The 13th salary is often paid during the Lunar New Year as a gesture of goodwill and to incentivise colleague retention.
Probation Periods
The probation period for employees is determined by the terms of the employment contract. Usually, a 3-month probation period is given for workers on a 1-year contract. A maximum of a 6-month probation period may be given to workers if their employment contract term is 3 years or more.
An employee’s salary during a probation period cannot be lower than 80% of their salary after the probation period.
Severance Payments
Severance compensation in China is calculated based on how long an individual has worked for the company. For each full-year that an employee has worked for a company, a severance pay-out of one month’s salary should be paid. A half-month’s wage is provided for working periods of less than six months.
Expanding into China
While it can seem extremely challenging to enter the Chinese market, a China-focused PEO or Employer of Record can prove exceptional useful to expedite and simplify the process. A China PEO can help you get set up overseas with all of the necessary requirements quickly, and without the need of a permanent establishment in-country.
Cultural Information
- Chinese New Year begins/ends in January/February each year, represented by 12 zodiac animal In order, they are the Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Goat, Monkey, Rooster, Dog, and Pig. 2025 will be the year of the Snake with the year beginning on 29th January 2025 and ending on 16th February 2026.
- In Chinese culture, a person’s name plays an important role in Chinese people’s lives. Parents are faced with an important task when choosing their child’s name. Chinese parents believe the right name will bring good luck.
- The Chinese consider 8 to be a lucky number (the Beijing Olympics commenced 08/08/08), and 4 to be an unlucky number
- The concepts of “guanxi” (referring to building an individual’s social network, based on strong personal and business relationships and mutual trust) and “mianzi” (referring to losing face – i.e. not knowing the answer to a question you are asked publicly, or giving face – i.e. paying someone a compliment)
Impacts from COVID-19
Although COVID-19 had a huge impact in China during 2020, the Government’s quick intervention allowed the nation to get back to normal relatively quickly. China’s border control is still strict since the pandemic, and it anticipates foreign entry to resume as of early 2022.
One possible approach for an expat to enter China is to get a Chinese vaccination certificate, and a valid APEX card or other Visa that provides access to mainland China.