Employee Leasing in China
As a global economic powerhouse, China offers great potential for business expansion. The country has world-renowned infrastructures, notably in terms of information and communication technologies and transportation. China also has the largest consumer markets in the world and one of the fastest-growing middle classes globally, making it a remarkable destination for businesses wishing to expand their activity at low risks.
Employee leasing in China is made extremely simple thanks to the services offered by FMC Group, which allow clients to benefit from the full potential of the Chinese market at reduced costs. Through employee leasing, businesses can achieve great growth in a short period because they can focus their entire energy on growth strategies, while FMC Group handles all administrative and legal regulations relating to the expansion and the management of employees.
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- Advantages of Employee Leasing in China
- Employee Leasing Services Offered by FMC Group
- Advantages of the Chinese market
- Recruitment in China
- Minimum Wage and Payroll
- Social Contributions and Taxes
- Working Hours and Overtime
- Vacation Days
- Parental Leave and Sick leave
- Other Types of Paid Leave
- Notice Period
Advantages of Employee Leasing in China
- Employee leasing in China allows businesses to significantly reduce their labor costs and to quickly expand their activity into the large consumer market of China, without having to go through the administrative and legal procedures of setting up a local subsidiary.
- Businesses that enter the Chinese market through employee leasing enjoy unmatched flexibility, allowing them to enter and exit the market very quickly and at minimal costs.
- Employee leasing lets companies focus entirely on their growth strategy, while FMC Group handles the administrative and legal management of employees.
Employee Leasing Services Offered by FMC Group
- Selecting candidates according to the client’s needs;
- Recruiting the best candidates after interviews;
- Negotiating employment contracts with the client’s best interests in mind;
- Managing the payroll according to international standards;
- Paying taxes, social contributions, and other expenses according to local regulations;
- Monitoring employee vacation days and other benefits according to the employment contract;
- Negotiating and implementing private health insurance for employees if needed;
- Maintaining day-to-day communication with clients about their employees.
Management and Reporting Flow of Employee Leasing Services
Advantages of the Chinese Market
- The Chinese economy is extremely stable and able to withstand global crises. The last time China recorded negative GDP growth dates back to 1976. The country was able to maintain positive GDP growth even during the 2008-2009 global financial crisis and during the COVID-19 pandemic.
- China is a global leader in the science and technology industries. The country’s 2021-2025 economic plan puts scientific and technological innovation among the main priorities for promoting economic development.
- China has one of the most efficient transportation networks in the world. The country invests massively in its transportation infrastructure to allow the movement of people and goods across the entire Chinese territory in record time. China has a railway network of over 150,000 kilometers, including 40,000 kilometers of high-speed railways. It also has over 1.18 million kilometers of highways, 110,000 kilometers of waterways, 80 international airports, and 34 major ports.
- The Chinese consumer market is the largest in the world, with a population of over 1.4 billion individuals. The Chinese middle class is among the fastest-growing in the world. It expanded from 3.1% of the population in 2000 to over half the population in 2020. It is also expected to keep growing for years to come.
- You can read more to discover China’s market potential further on China Investment Promotion Agency.
Recruitment in China
Minimum Wage and Payroll
- The minimum wage in China varies from one region to the other. In the capital Beijing it is set at CNY 2,320 (EUR 340) per month, while in Shanghai it stands at CNY 2,590 (EUR 380).
- Salaries in China are paid monthly, usually on the last working day.
- The 13th-month bonus salary is not legally required in China, but it is very common. It is usually given during the month of the Lunar New Year or Spring Holiday.
Social Contributions and Taxes
|Work-Related Injury Insurance||0.2% – 1.9%|
|Total||39.0% – 40.7%|
|Employee Income Tax|
|Up to CNY 36,000 (EUR 5,279) per year||3.0%|
|Between CNY 36,001 and CNY 144,000 (EUR 5,279 – EUR 21,115)||10.0%|
|Between CNY 144,001 and CNY 300,000 (EUR 21,115 – EUR 43,990)||20.0%|
|Between CNY 300,001 and CNY 420,000 (EUR 43,990 – EUR 61,587)||25.0%|
|Between CNY 420,001 and CNY 660,000 (EUR 61,587 – EUR 96,779)||30.0%|
|Between CNY 660,001 and CNY 960,000 (EUR 96,779 – EUR 140,769)||35.0%|
|More than CNY 960,000 (EUR 140,769)||45.0%|
*Employer and employee contributions vary slightly from one region to another. Beijing’s rates are presented as an example.
Working Hours and Overtime
- The legal working hours limit in China is set at 40 hours per week and eight hours per day.
- Overtime work is paid at a rate of 150% of the regular pay rate during weekdays, 200% during weekends, and 300% during public holidays.
- Overtime work cannot exceed three hours per day and 36 hours per month.
- Employees in China are entitled to five days of paid leave per year between their second year of service and their 10th. Annual paid vacation increases to 10 days from the 10th year to the 20th and reaches a maximum of 15 days after 20 years of service.
- Employees become eligible for their annual paid leave after an entire year of service.
- China celebrates seven national public holidays, in addition to several region-specific holidays. The nationwide holidays are as follows:
- New Year’s Day: January 1st (one day)
- Chinese New Year: Between January and February (three days)
- Tomb-Sweeping Day: April 5th (one day)
- Labor Day: May 1st (one day)
- Dragon Boat Festival: Between May and June (one day)
- Mid-Autumn Festival: Between August and September (one day)
- National Day: From October 1st (five days)
Parental Leave and Sick Leave
- Expecting mothers can take up to 98 days of paid maternity leave or 113 days for multiple births. The salary during maternity leave is covered by social security at a rate of 100% of the regular salary or three times the minimum wage, whichever is the greater.
- Fathers can take 10 days of paid paternity leave after the birth of their child. Social security covers pay during this period.
- Employees in China can take between three months and 24 months of sick leave, depending on how long they have been working for the same employer. Sick pay also varies according to the number of years of service. It varies between 60% and 100% of the regular salary for sick leaves shorter than six months, and between 40% and 60% for leaves that are longer.
Other Types of Paid Leave
- Employees in China are entitled to up to three days of paid leave, depending on the region, after the death of an immediate family member.
- Employees are entitled to three to 10 days of paid leave, depending on the region, after their marriage.
- Employees wishing to leave their job have to respect a notice period of at least 30 days. The duration can be extended to 60 days in certain cases, according to the employment contract.
Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.