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 - 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 25-30% of monthly income capped at $4,500, 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, so the overall picture is complex.
Treaties
China has social security agreements with 12, mostly European countries. 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.
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 bureaux in China 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. Shanghai, for example, still does not collect social security for non-Chinese nationals working there.
Foreigners leaving China permanently can generally apply for a refund of their (but not their employers’) 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. Although expatriates could technically claim medical and unemployment benefits, in practice this rarely happens
Social security insights are intended to provide quick and straightforward insights into social security regimes. Always seek professional advice based on actual circumstances before acting.
More About Us
- What is Workia?
- Insights Home