Summary

The social security system in China provides a wide degree of social protection (for pensions, medical, unemployment, maternity and industrial injury). It is legislated for centrally but administered by local authorities – and who have the ability to set their own contribution rates and income caps, as well as administrative procedures - which adds complexity if businesses operate in more than one location.

Details

Contributions

Provinces and cities set their own contribution rates. Employer contributions are usually in the region of 22-28% of monthly income capped at about $5,300, and employee contributions are generally around 10% of the same capped income. Different caps apply in different cities and for different elements of the social security system (pension, medical, unemployment and work-related injury), so the overall picture is complex. Shanghai has historically had one of the highest social security rates in China.

Treaties

China has active social security agreements with 12, mostly European countries plus Korea and Japan. The agreements generally provide that expatriates will continue to pay contributions in their home countries while on assignment in China. Chinese social security agreements generally only cover pension and unemployment insurance, so other elements of local contributions may still be payable even when a certificate of coverage is in place. The US and UK do not have agreements with China, and the agreement with France is not yet ratified.

Exemption from social security with a certificate of coverage is not automatic. Certificates and sometimes other documents need to be submitted to local social security bureau in China within three months for the exemption to be allowed. 

Exemptions

Although foreigners have been required to contribute to the social security system in China since 2011, not all locations have implemented this requirement, and enforcement is patchy. In Beijing and Shanghai, foreigners’ participation in social insurance is generally mandatory.

Foreigners leaving China permanently can generally apply for a refund of employee (but not employer) pension insurance contributions. Medical Insurance contributions can be refunded if private medical cover was in place while in China.

Administration

Chinese employers are required to register foreign employees within 30 days of obtaining a work permit and withhold social taxes on a monthly basis.

Benefits

In general, individuals need to pay at least 15 years of contributions prior to receiving a pension in China. Following reforms in 2025, the statutory retirement age is gradually increasing over 15 years, moving from 60 to 63 for men and 55 to 58 for women. Although expatriates could technically claim medical and unemployment benefits, in practice this rarely happens.

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