You can hire employees in China without the need for an entity.
Typically, to hire employees in China, your business must have an entity, which involves establishing a local office, registering an address as a subsidiary, and opening an account with a local bank. Managing regional benefits, payroll, tax, and HR laws throughout this process can take several months.
China has separate regulations for contractors compared to full-time employees, making it crucial to avoid misclassification to avoid potential penalties. ATA streamlines the process of hiring employees in China, ensuring speed, simplicity, and compliance. Additionally, our platform automates tasks such as tax document collection, payroll, benefits, and more.
Our quickstart guide to hiring in China
Navigate the tabs below to learn everything you need to know about hiring an employee in China
- Minimum Wage Requirements
- Minimum wages in China are set by each region and include a minimum hourly and minimum monthly wage.
- Individual Income Tax
- The range of individual income tax varies from 3% to 45% and is calculated using progressive rates. The total tax rates can be influenced by additional factors such as household status and the number of children.
|Type of leave||Time period|
|Annual leave/Earned Leave||As per the employment contract|
|Sick Leave||120 days|
|Maternity Leave||14 weeks|
Ending an employment contract in China is challenging except in cases of mutual agreement or when the contract reaches its expiration date.
The length of the notice period varies based on the duration of employment. For employees in their probationary period, the notice period ranges from 3 to 30 days, while for permanent employees, it is typically between one to three months.
If applicable, severance pay is compulsory and the amount is determined by the length of employment. It is calculated as one month’s salary for each complete year of service. However, for employees with high salaries in the region, severance pay is limited to three times the local average wage.
As part of an employee’s compensation package in China, employers must provide statutory benefits. These benefits are centered around the State Social Insurance System, which is mandated by law and covers medical care for workers with one exception: it does not extend to self-employed individuals or freelance professionals, such as architects, who work independently and rely solely on earnings from client referrals without a formal contract.
The Chinese social security system is a crucial component of the country’s infrastructure, with mandatory contributions from both employers and employees comprising a significant portion of its revenue. The system is responsible for managing state-sponsored insurance plans in 16 different regions across mainland China and provides a range of benefits, including pensions after retirement, industrial insurance for work-related accidents resulting in temporary or permanent disability, medical insurance for sick pay and hospitalization, and maternity insurance covering maternity pay.
After the client signs the SOW, the onboarding process typically requires two-three business days.
- Employee contract
- Chinese and English are the languages of employment contracts.
- Probation period
- The usual probationary period followed in China is from one to six months.
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