Employment in mainland China is governed by the Labour Law and the Labour Contract Law, but provinces and cities set many of the details, including minimum wages, social insurance rates and extra maternity leave. Here is what employers need to know about leave, pay, tax and ending employment.
National law sets the baseline for annual and maternity leave. Provincial family planning regulations add extra maternity leave, paternity leave and childcare leave, so entitlements depend on where the employee works.
After 12 months of work: 5 days with 1–10 years of total working history, 10 days with 10–20 years, 15 days with 20 years or more.
Including 15 days before the birth. Most provinces add 30 to 60 days or more on top.
Set by each province, typically from 7 days to about a month, on full pay.
Employees who are ill or injured outside work are entitled to a protected medical treatment period of 3 to 24 months, depending on their total and current years of service. Sick pay is set locally and can be lower than normal pay, but it cannot fall below 80% of the local minimum wage.
Maternity allowance is paid by the social insurance fund, based on the employer’s average contribution wage; if the employee’s own salary is higher, many cities require the employer to make up the difference. Many provinces also grant each parent 5 to 10 days of childcare leave a year until the child turns 3.
Set up each leave type in IceHrm with its own accrual, carry forward and approval rules, and use leave groups when offices in different provinces have different maternity, paternity and childcare entitlements. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
There is no national minimum wage. Each province sets monthly and hourly minimums in several tiers and reviews them at least every 2 to 3 years, with the highest rates in Shanghai, Beijing and major Guangdong cities.
Under the standard working hours system. Comprehensive and flexible hours systems need local approval.
Normally no more than 1 hour a day, or 3 hours in special circumstances.
150% on working days, 200% on rest days if no time off in lieu is given, and 300% on public holidays.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so working day, rest day and public holiday overtime reflect what was actually worked. Time & attendance →
Residents are taxed on “comprehensive income”, which combines salary with fees for labour services, author’s remuneration and royalties. Employers withhold tax monthly on a cumulative basis, and employees settle any difference in an annual reconciliation between March and June.
| Annual taxable income | Rate | Quick deduction |
|---|---|---|
| CNY 0 – 36,000 | 3% | 0 |
| CNY 36,000 – 144,000 | 10% | 2,520 |
| CNY 144,000 – 300,000 | 20% | 16,920 |
| CNY 300,000 – 420,000 | 25% | 31,920 |
| CNY 420,000 – 660,000 | 30% | 52,920 |
| CNY 660,000 – 960,000 | 35% | 85,920 |
| Over CNY 960,000 | 45% | 181,920 |
Social insurance (pension, medical, unemployment and work injury, with maternity insurance now merged into medical) and the housing provident fund are compulsory for Chinese employees and, since 2011, for foreign employees too. Rates and contribution bases are set locally, with monthly caps of around three times the local average wage. Employers cannot agree with employees to skip contributions.
| Contribution | Employer (Shanghai) | Employer (Beijing) | Employee |
|---|---|---|---|
| Pension | 16% | 16% | 8% |
| Medical (incl. maternity) | 9% | 9.8% | 2% |
| Unemployment | 0.5% | 0.5% | 0.5% |
| Work injury | 0.2–1.9% | 0.2–1.9% | – |
| Housing provident fund | 5–7% | 5–12% | Matches employer |
Employers that do not employ enough people with disabilities pay a disability employment security fund levy in most regions. Trade union dues of 2% of payroll apply where a union is established.
Build Chinese pay the way you already structure it, with your own salary components, deductions and formula columns, such as city-specific social insurance and housing fund columns. Want to know how well IceHrm handles payroll calculations for China? Contact us or see Payroll →
An employer can only end a labour contract on the grounds listed in the Labour Contract Law. Unlawful termination entitles the employee to reinstatement or compensation of twice the statutory severance. Unilateral terminations must be notified to the trade union in advance.
For non-fault dismissals (incapacity, incompetence or a major change in circumstances), the employer must give 30 days’ written notice or 1 month’s pay in lieu. Employees resigning must give 30 days’ notice, or 3 days during probation. No notice is needed for dismissal for misconduct.
| Service | Severance |
|---|---|
| Less than 6 months | Half a month’s pay |
| 6 months to 1 year | 1 month’s pay |
| Each full year of service | 1 month’s pay |
Severance is also due when a fixed-term contract expires and the employer does not renew it on the same or better terms. It is not due for misconduct dismissals or resignations.
Since 2025, China has 13 days of statutory public holidays. The State Council publishes the exact dates each year, often swapping weekends to create longer breaks, so some Saturdays or Sundays become working days.
Some holidays apply only to certain groups, such as half a day for women on International Women’s Day (8 March) and for young people on Youth Day (4 May). Ethnic minority regions have their own holidays.
Load each year’s State Council schedule into a holiday calendar and assign it to your leave groups, so every office in China gets the right days off. Holiday calendars →
A written labour contract must be signed within 1 month of the start date. If it is not, the employer owes the employee double wages for each month without a contract, and after 1 year the employee is treated as having an open-ended contract.
| Contract term | Maximum probation |
|---|---|
| Less than 3 months | None |
| 3 months to less than 1 year | 1 month |
| 1 year to less than 3 years | 2 months |
| 3 years or more, or open-ended | 6 months |
There is no cap on the length of a fixed-term contract, but an employee can insist on an open-ended contract after 10 years of service or at the renewal following two consecutive fixed-term contracts. Foreign employees need a work permit and residence permit, and their contracts are fixed-term.
Send labour contracts for e-signing within the 1 month deadline, store them with work permits on the employee’s record, and track onboarding with task lists so social insurance and housing fund registration are never missed. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for China, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for China? Talk to us.
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