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A Beginner's Guide to China's Social Security System

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China’s Social Security System

According to the China Labor Bulletin, every employee in China—including rural migrant workers—must be covered by its social security system. The responsibility lies on both employees and employers to make their designated contributions—at different yet pre-defined rates.

In this blog post, we’ve listed all you need to know about China’s social security system as a foreign investor:

China’s social security system at a glance

The current social security system that’s in place throughout China surfaced in the late 90s. However, in 2011, it was put forward in the form of the Social Insurance Law.

China’s current social security system can be broken down into five major categories, other than the housing fund, which is mandatory.

These include work-related injury allowance, medical allowance, unemployment insurance, maternity allowance, and pension. As an employer, you can also provide add-ons to your employees. These include housing, and any form of supplemental health insurance. These are paid by employers from company reserves.

What are the government regulations?

The government of China has set certain employer obligations that need to be followed.

First of all, all foreign investors need to know what employer obligations apply to them. If you’re simply willing to pay the allowance amount, you’re not doing enough.

Every time you hire new staff and employees, it is also your responsibility to make sure they’re registered with the social insurance bureau. You also need to check with the housing fund bureau to register their corresponding accounts.

WFOEs, joint ventures, and representative offices in China

As an employer, the government of China also requires you to make sure that the allowance amounts are correctly calculated, and that payments are made on a timely basis. If you fail to make these payments on time, you could end up paying heavy fines.

In the worst case, your company might even be put on an HR “name and shame” list. This will not only tarnish your reputation, but will also make future recruitments a challenge for your company.

Even if you decide to delay the contribution for a certain month under special circumstances, you should first sign a mutual agreement with employees. In the case of a labor dispute, the court usually favors employees, and requires the employer to pay the contribution of social security amount as well as the extra severance payment.

Now that you’ve got the hang of your obligations as an employer, it’s time to get your company registered in no time! Other than expediting the registration process, we will also help establish WFOEs, joint ventures, and representative offices in China.

Give us a call at +86-020-2917 9715 or email to, we will bounce back to you in a minute.

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