HR Software for China
Leave Policy
Maternity Leave
Female workers in China are entitled to 120 to 158 calendar days of maternity leave, depending on location. Maternity leave covers 15 days before the birth. The government pays the employee’s average monthly salary during the vacation, and the employer covers any shortfall.
The employee can extend the leave by an additional 15 days for difficult labor and six and a half months of breastfeeding leave if the company approves this. During breastfeeding leave, the salary is 80% of the employee’s previous actual monthly salary and the employer is responsible for payment.
Maternity leave at key locations
| Region | Basic | Extended |
|---|---|---|
| General | 98 days | 30 days ~ 90 days |
| Beijing | 98 days | 60 days |
| Shanghai | 98 days | 60 days |
| Guangzhou & Shenzhen | 98 days | 80 days |
| Sichuan | 98 days | 60 to 90 days |
| Shandong | 98 days | 60 days |
Paternity Leave
Employees who have worked for the same employer for at least one year and have an employment contract or service agreement with the employer are entitled to an average of 15 days of paid paternity leave, depending on location. The leave must be taken within 30 days of the birth of the child. During paternity leave, the employee should receive 100% of the salary paid by the employer.
The extension of paternity leave depends on the employee’s location.
Parental Leave
Parental leave varies depending on the region in which the employee works. Employees in Beijing and Shanghai are entitled to 5 days of parental leave per year until their child is 3 years old. Both parents can take this leave and decide how they share the free time. Under specific salary arrangements, the basic salary is paid during statutory parental leave in most regions.
| Region | Number of Days for Leaves |
|---|---|
| Heilongjiang, Liaoning, Hebei, Jiangxi, Sichuan, Guizhou, Zhejiang, Tianjin, Ningxia, Henan, Hubei, Hunan, Hainan, and Guangdong | 10 days of childcare leave each year |
| Shanxi, Qinghai, and Gansu | 15 days of childcare leave each year |
Sick Leave
Sick leave in China is very complex. Employees are entitled to up to 180 days of paid sick leave. This vacation is paid at different rates and by different payers depending on the length and length of service.
Pay & Tax
Minimum Wage Requirements
In China, the minimum wage varies between the 31 provinces. Shanghai has the highest minimum wage of 2,590 RMB per month.
Some of the minimum wages are:
- Beijing RMB 2,320
- Guangdong
1. Guangzhou RMB 2,300
2. Shenzhen RMB 2,360 - Shanghai RMB 2,590
Individual Income Tax
The individual income tax in China ranges from 3% to 45%. Income tax is calculated according to progressive rates, with the tax rate increasing as gross annual income increases.
| Gross Annual Income | Tax Rate (%) |
|---|---|
| Less than 36,000 | 3% |
| 36,000.01 – 144,000 | 10% |
| 144,000.01 – 300,000 | 20% |
| 300,000.01 – 420,000 | 25% |
| 420,000.01 – 660,000 | 30% |
| 660,000.01 – 960,000 | 35% |
| Above 960,000 | 45% |
Payroll Cost
Employer costs vary by province and region.
Shanghai: Employer costs are generally estimated at 36% of employee salary:
- Pension fund – 16%
- Health insurance – 9.50%
- Unemployment Fund – 0.50%
- Industrial Accident Fund – 0.16%
- Maternity leave – 1%
- Housing fund – 7%
- Disability Fund – 1.50%
Overtime Pay & Maximum Hours
The standard working hours are 8 hours per day and 40 hours per week. The standard working week lasts from Monday to Friday. However, the working week can be extended to 6 days and 44 hours per week.
Pay for overtime is mandatory. Hours worked outside of normal working hours are considered overtime. Employees can work a maximum of 3 hours of overtime per day. Employees receive compensation for additional hours:
- 150% of the hourly rate on working days.
- 200% of the hourly rate on weekends.
- 300% of the hourly rate on public holidays.
Employees can work up to 36 hours of overtime per month.
Termination
Termination Requirements
Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.
Terminations in China can be very complex. Outside the probationary period, employers in China cannot terminate at their own discretion, and the termination must be for a valid reason.
Terminations vary by province and region.
In Shanghai, Chinese labor law can be complex. Employers cannot terminate at will and the termination must be for a valid reason.
The following terminations are permitted in Shanghai:
- Voluntary termination by the employee: An employee can terminate his or her job at any time by informing the employer.
- By mutual agreement: Employer and employee can end the employment relationship by mutual agreement.
- Unilaterally by the employer due to:
1. Probationary period: During the probationary period, the employer can terminate the employee by giving reasons and causes.
2. Objective reasons: The employer can terminate an employee for objective reasons, due to layoffs or restructuring.
3. Disciplinary reasons: The employer can dismiss an employee for disciplinary reasons for serious misconduct.
4. Performance due to lack of suitability for the job: An employer can terminate an employee if, after an assessment process, he or she is found to be unsuitable for the job. - When the contract expires: If the employment contract is limited, the employment relationship ends automatically when the contract expires, unless it is renewed or extended by mutual agreement.
Notice Period
The notice period is at least 3 days during the probationary period and 30 days after the probationary period. Depending on the employee’s location, additional local regulations may apply.
Severance for Employees
In China, severance pay is based on the length of employment with the same employer and can vary depending on the province and region.
The amount of severance pay in Shanghai depends on the reason for termination and the employee’s years of service.
- Termination without reason:
1. Less than six months: half a month’s salary.
2. More than six months: one month’s salary for each full year of service, up to a maximum of 12 months’ salary. - Termination due to serious breach of the employment contract by the employee: no severance payment required.
- Termination of the employment relationship by mutual agreement between employer and employee: The severance payment is negotiable.
For fixed-term contracts, the severance payment is calculated at the amount of one day’s salary for each completed year of service.
To protect you from unforeseen financial risks associated with dismissals, IceHrm applies a severance pay provision in all employment contracts in this country. IceHrm has extensive expertise in managing litigation risk globally and our severance provision calculation is based on prevailing common law or statutory requirements and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.
Statutory Time Off
Paid Time Off
Both full-time and part-time employees are entitled to 5 working days of paid time off (PTO) per year. PTO is credited monthly at 0.42 days per month.
Employees are entitled to their time off after one year of employment.
The right to paid time off may increase depending on the number of years the employee has worked, taking into account hours worked with the same or different employers:
- Less than 10 years, 5 working days
- More than 10 years and less than 20 years, 10 working days
- More than 20 years, 15 working days
Public Holidays
There are 7 national holidays in China that last 11 days. National holidays include:
- New Year celebration
- Spring Festival
- Ching Ming Festival
- Labor holiday
- Dragon Boat Festival
- Mid-Autumn Festival
- National holiday
In China there are other holidays depending on religion and region.
Onboarding
Onboarding
Onboarding takes 7 working days. The recruitment process includes registering the employee with social security and the housing benefit office.
Additional Info
Employment Contract Details
The contracts must be written in English and/or a national language (Chinese) and can be bilingual. They must be in writing and signed by both parties.
The language and terms of employment contracts vary depending on the employee’s location.
A contract must contain:
- Surname
- Start date
- Length of employment
- Position and responsibilities
- Working hours
- Pay, Occupational safety and labor insurance
- Conditions for termination of employment
In Shanghai, it is permissible to conclude employment contracts in English provided both parties agree.
Probation Period
In China, the length of the probationary period depends on the length of the employment relationship:
- Less than 1 year: The probationary period cannot exceed one month.
- 1-3 years: The probationary period may not last longer than two months.
- 3 or more years: The probationary period may not last longer than six months.
The details of the probationary period may vary depending on the location where the employee is hired.
Termination during the probationary period: If the employer decides to terminate the employment during the probationary period, a valid reason must be proven.