Social security covers old age pension, medical, occupational injury, unemployment and maternity.
Contributions are set by local government, and differ accordingly. For example, in Beijing, employers pay 32.8% and employees 10.5%, with a monthly salary cap of CNY 12,603; while in Shanghai, employers pay 37% and employees 11% of salary, with monthly salary capped at CNY 11,688.
On leaving China, foreign employees can either keep their social insurance individual account to add to during future employment in China, or claim a refund of their own contributions. On death, the employee’s account balance can be inherited. Employer contributions can only be paid out as annuities, not as a lump sum.
In order to receive a social security pension outside China, foreigners must have paid contributions for at least 15 years. The pensioner must also provide proof of life every year to the local Chinese embassy or consulate.
Although the increase in costs for employers of foreign staff will be fairly small, there could be tax implications, and payroll systems will need to be adjusted. Employers should consult our Swiss Life Network Partners in China for assistance.
For more information
please contact Swiss Life Network