EOR Service in China

Shraddha Saxena

Hire, Onboard and Pay Employees in China Quickly and Efficiently

Hiring in China at a glance

CURRENCY
Yuan
working hours
8 hours per day/40 hours per week
public/bank holidays
13
capital
Beijing
language
Mandarin Chinese
date format
YYYY:MM:DD
remote workers
1.2M
tax year
January 1st to December 31st
minimum hourly salary
No minimum wage
CURRENCY
Yuan
public/bank holidays
13
capital
Beijing
language
Mandarin Chinese
date format
YYYY:MM:DD
tax year
January 1st to December 31st
payroll frequency
Monthly
GDP
$17,794.78B (est. 2023)
working hours
8 hours per day/40 hours per week

Employer of Record in China

China boasts a colossal talent pool. However, China’s labor laws, employment regulations, and cultural nuances can pose significant hurdles for foreign employers. By partnering with an EOR in China, employers gain access to local expertise and infrastructure, letting them seamlessly tap into the vast talent pool. An EOR in China serves as an intermediary, assuming legal responsibility for employing workers on behalf of the foreign company while ensuring compliance with local labor laws and regulations.

Why use China EOR?

Unlocking the potential of the Chinese labor market requires a deep understanding of its labor laws. China has complex employment regulations, making it daunting for foreign employers. 

China’s labor laws are heavily influenced by central laws and collective bargaining agreements. In addition to these, laws around sick leaves, benefits, wages vary with each province. For example, hourly minimum wages in Shanghai is set at RMB 24, while employees in Beijing must receive at least  RMB 26.4 on an hourly basis. This is different to laws in the USA where minimum wages and other employment laws are set at the national and state level. Unlike the USA, labor unions are extremely empowered in China, and laws can keep changing with the demands of the union. 

A China EOR/PEO provides expertise in navigating Chinese labor laws, ensuring legal compliance for your business. They handle employee contracts, payroll processing, tax obligations, and administrative tasks according to Chinese regulations. By partnering with a China EOR/PEO, you gain access to local knowledge, networks, and cultural understanding, facilitating business establishment and growth in China.

Take your HR Solutions Global
Onboard 2x faster across 140+ countries with Gloroots.
Talk to our experts

EOR Costs in China

EORs in China base their pricing on two common pricing models: fixed pricing and percentage-based pricing.

In a fixed pricing model, the EOR charges a predetermined fixed fee for each employee or service provided. Companies with long-term goals to grow in China can partner with EORs following fixed pricing. Such a model allows employers to plan their hiring budgets when hiring talent in China. This fee typically covers administrative costs, compliance management, and employer contributions.

Alternatively, the percentage-based pricing allows EORs in China to charge a percentage of the employee's salary - 3% to 10% - as their fee. The percentage depends on various factors- the number of employees, specific services required, and the duration of the engagement. Such a pricing model suits companies with fluctuating or project-based workforce needs. However, this pricing model becomes unsuitable for hiring high-salaried employees. As opposed to a fixed pricing model where the costs are stable regardless of salary, the percentage-based pricing becomes heavy on the employer’s hiring budgets as they hire high-income employees. 

Discuss with your EOR partner prior about cost arrangements before expanding in China.


Key Metrics For Foreign Indicators

With a massive market, dynamic economy, skilled workforce, innovation hubs, and supportive government policies, working in China is a gateway to success. Join the vibrant tech ecosystem, tap into a diverse consumer base, and experience a rich cultural heritage.

Factors Global Ranking Interpretation
Rule of law

Labour-employer cooperation

Reading Maths, and Science

University Ranking

Labour productivity per employee

Ease of finding skilled employees

Workforce with tertiary education

Digital Skills
63

31

1

3

76

12

n/a

n/a
Indicates effectiveness of law enforcement

Indicates positive labor-employee relationships

Indicates average scores in OECD's survey of 15-year old students

Indicates average QS rankings

Indicates total output by the total labour input used to produce that output

Indicates findability of skilled talent

Indicates % of workforce with PG degrees

Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2023

Through the Gloroots' Recrew platform, you can discover amazing talent in the China and grow your team effectively.

Why work in China?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Risks of misclassification

Navigating the complexities of employee classification is crucial when operating in China. Misclassifying workers can lead to legal liabilities and financial penalties. To safeguard your business, partnering with a reputable PEO/EOR in China is a wise choice.

By engaging a PEO/EOR, you ensure compliance with Chinese labor laws, accurate employee classification, and seamless payroll processing. These experts handle comprehensive benefits and ensure that your workforce receives the legal protections and entitlements they deserve. Focus on your core business operations while entrusting employment-related obligations to trusted professionals in China.

Contact Us

Avoid hefty penalties with Gloroots.

Use our free employee misclassification risk calculator to estimate your risk level.

Calculate Now

Employing in China

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Income Tax

Annual Taxable Income (CNY) Tax Rate
Up to 36,000 3.00%
36,001 – 144,000 10.00%
144,001 – 300,000 20.00%
300,001 – 420,000 25.00%
420,001 – 660,000 30.00%
660,001 – 960,000 35.00%
Over 960,000 45.00%

Note: CNY stands for "Chinese Yuan," which is the official currency of China.

Other Taxes and Social Security Contribution

Employer Payroll Contributions

Contribution Type Rate Max Salary Base (CNY)
Pension 16.00% 36,921
Unemployment Insurance 0.50% 36,921
Medical Insurance 9.00% 36,921
Work-related Injury Insurance 0.16% – 1.52% (varies by job) 36,921
Maternity Insurance 1.00% 36,549 (merged in many cities)
Housing Fund 5.00% – 12.00% (can exceed) N/A
Total Employer Cost 31.66% – 40.02%

Employee Payroll Contributions

Contribution Type Rate Max Salary Base (CNY)
Pension 8.00% 36,921
Unemployment Insurance 0.50% 36,921
Medical Insurance 2.00% 36,921
Housing Fund 5.00% – 12.00% (can exceed) N/A
Total Employee Cost 15.50% – 22.50%

Please note that the contribution rates and components may vary depending on the specific location in China. The example provided here is based on the rates in Shanghai.

Separation

Termination Process

China does not follow the "at-will" employment principle. This means that employers must have a justified legal reason to terminate an employee.

Valid grounds for termination include:

  • The employee does not meet job requirements during the probation period.
  • The employee seriously violates company policies or rules.
  • The employee engages in misconduct, such as gross negligence or corruption, causing significant damage to the employer.
  • The employee takes another job that interferes with their current role.
  • After a designated medical treatment period, the employee is still unable to return to their original position or take on a new role.
  • The employee remains unfit for the role even after training or reassignment.
  • The company is undergoing restructuring, downsizing, or bankruptcy.

Employers may also end a contract through a Mutual Termination Agreement, which includes negotiated severance, no less than the statutory minimum. For unilateral terminations, the employer must notify the trade union (if applicable) in advance and provide a valid explanation for the decision.

Notice Period

In China, employers or employees must give 30 days’ written notice for termination. No notice is needed for misconduct or probation failure. During probation, employees can resign with 3 days’ notice. Employers may also offer pay in lieu of notice.

Severance Pay

In China, severance pay equals one month’s average wage for each year of service, rounded up to the nearest half or full year. If an employee's wage exceeds three times the local average, severance is capped at 12 months, calculated using the employee’s average salary over the past year. Gloroots ensures accurate, compliant severance calculations aligned with local regulations.

Probation Periods

In China, probation periods are regulated based on contract type and duration. For indefinite-term contracts, the maximum probation period is 6 months. For fixed-term contracts, it varies:

  • 3 months to 1 year: up to 1 month
  • 1 to 3 years: up to 2 months
  • Over 3 years: up to 6 months

Only one probation period can be set per employee. If an employer terminates the contract during probation, they must clearly communicate the reason to the employee.

With Gloroots, you can confidently structure contracts and manage probation terms in full compliance with Chinese labor laws.

Start Hiring in China today

When hiring globally, ensuring compliance comes with its own set of battles. Employers must ensure all hiring and onboarding activities adhere to employment laws, payroll procedures, DE&I compliance, GDPR and similar data protection, etc. If you think it is hard to set up local entities and start hiring, keeping up with a dynamic compliance landscape is far harder. 

Gloroots helps you minimise all these efforts by providing a single window to manage all these tasks. Our in-house experts fully shield you from cross-border employment and payroll compliance risks. They do this by helping you with generate employment contracts, make on-time payments, offer compliant benefits, while you focus only on screening talent. 

Our promise is a stress-free global employment experience for both you and your employee.

Contact our experts today to kickstart your global hiring campaign.

Grow your team in China

Employers in China must have a local legal organization and utilize local resources to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in China makes compliance with employment laws demanding.

With Gloroots' global Employer of Record (EoR) service, you can let Gloroots handle the heavy lifting of payroll, tax, benefits, and compliance, allowing you to concentrate on what matters most: your employees and company growth.

Are you Ready to
Experience Seamless Hiring in China?

Let us take care of all your employment needs. We guarantee easy onboarding & compliant workforce management in China.

Speak to our Expert