Employer of record in China: costs, rules and how to hire

The written contract is the single highest-value piece of paperwork in a Chinese hire, because the penalty for missing it is a wage claim rather than a fine. A written employment contract is generally required within one month after work starts, covering the parties, duration, duties, workplace, hours, rest, pay, social insurance and working conditions, with each party keeping a copy.

Agree the terms and complete the contract

For an EOR hire, sign before the start and use wording the employee and the local authorities can understand, agreeing how any bilingual versions are interpreted. Changes to agreed terms normally require mutual agreement in writing.

Working for more than one month but less than one year without the required written contract can create a double-wage claim, and after a year the law treats the relationship as open-ended. The September 2025 court interpretation recognises exceptions to the additional wages, including the employee's deliberate conduct or gross negligence in not signing, so keep evidence of the signing process and take advice on a disputed claim.

Choose the contract and probation carefully

China allows fixed-term, open-ended and task-completion contracts, and an employee with ten continuous years at the employer, or qualifying successive fixed-term contracts, can be entitled to an open-ended contract. The Supreme People's Court confirms that employers cannot refuse a qualifying employee's request after two consecutive fixed terms, certain extensions or changes of employing entity also count against attempts to avoid the rule, and dispatch contracts generally must last at least two years.

Probation length follows the contract term and cannot be repeated.

The same employer and employee may agree probation only once, within the employment term, and dismissal during probation still needs a lawful reason and an explanation. These are maximum periods rather than an entitlement to dismiss without a reason.

Probation pay has a floor too. The implementing regulation sets an 80% wage comparison against the lowest wage for the same position at the employer or the agreed contractual wage, and probation pay must also meet the applicable local minimum. Confirm the relevant comparison and any better contractual terms before setting the amount, because an agreement cannot remove the statutory wage floor.

A separate category exists for genuinely short hours. Statutory non-full-time employment generally means no more than four hours a day on average and 24 hours a week with the same employer, an oral agreement is permitted, probation is prohibited, and the payment interval cannot exceed 15 days. Either party can notify the other of termination at any time without statutory economic compensation under this category, and labour dispatch agencies cannot engage dispatched staff through it.

Check policies, classification and ownership

Rules directly affecting pay, hours, leave, safety, benefits or discipline require the employee discussion and consultation process in the Labour Contract Law, followed by publication or communication to employees, and applicable collective agreements can set binding standards above the legal minimum. Ask the employer to confirm the handbook, the disciplinary procedure and the collective terms before relying on any of them in a dispute.

On classification, the authorities look at the parties' legal capacity, whether the person is managed under the business's employment rules, whether they perform paid work arranged by the business, and whether that work is part of its operations, with payroll, attendance, recruitment records and other evidence mattering. A contractor agreement or a remote workplace does not override an employment relationship shown by the facts.

Post-employment non-competes are restricted to senior managers, senior technical staff and others with confidentiality duties, with a maximum two-year period and agreed monthly compensation, and the 2025 court interpretation says a clause does not take effect where the employee did not know or encounter relevant trade secrets or confidential intellectual property. Its scope, territory and duration must fit the information involved.

Under the Patent Law, inventions made through employment duties or mainly using the employer's material and technical resources can be service inventions, with the patent application rights belonging to the employer, while non-service inventions belong to the inventor and certain resource-based inventions can be governed by agreement. Service inventors have reward and remuneration rights. For an EOR hire, document the intended ownership and the lawful transfers to the client, treating software and other work separately.

Record remote-work arrangements

For remote or hybrid work, record the agreed workplace, schedule, supervision, equipment, expense arrangements and handling of employee information, remembering that written changes to contractual terms normally need mutual agreement. The normal employment, pay and working-time rules still apply unless a lawful exception covers the role, and remote work is not permission to work in China without the required immigration status.

Misclassification risk, and the evidence the authorities look at

China assesses this on a list of factual questions, and usefully for a hirer, the list tells you what evidence will be produced. The authorities look at the parties' legal capacity, whether the person is managed under the business's employment rules, whether they perform paid work arranged by the business, and whether that work is part of its operations. Source: the approved Chinese contractor-status guidance, Shanghai human resources and social security authority, checked 18 September 2026.

Then the evidence: payroll, attendance, recruitment records and other material. That is the part worth planning around, because attendance records and recruitment paperwork are created as a matter of routine and they describe the relationship more faithfully than the contract does. A contractor agreement or a remote workplace does not override an employment relationship shown by the facts. Source: the approved Chinese contractor-status guidance, checked 18 September 2026.

What a hirer does about it: if the person will be on your attendance system, managed under your rules and doing work that is part of your operations, the evidence already says employee, and the contract will not outrank it. So decide on that basis before the engagement.

China attaches a price to the missing written contract, and it is the clearest consequence on this site because it is arithmetic rather than discretion. Where an employer has not concluded a written employment contract with a worker for more than one month but less than a year from the date employment began, it must pay the worker double wages each month under article 82 of the Employment Contract Law and conclude the written contract. Where a full year passes with no written contract, the double wages run from the day after the first month to the day before the first anniversary, and an open-ended employment contract is deemed to have been concluded on that anniversary, with a written contract to be made up immediately. Source: Regulations for the Implementation of the Employment Contract Law, articles 6 and 7, State Council text published on moj.gov.cn, archived capture 14 September 2026.

That is what makes a Chinese contractor arrangement different from most others. If the facts say employment, the exposure is not a fine somebody has to assess, it is double pay for the months already worked plus an open-ended contract you did not intend to sign. Decide the status before the first month is out, because the first month is the whole of the grace period.

Most of the Chinese list comes down to one habit: treating a national rule, a Beijing figure or a published holiday break as though it applied everywhere and to everything.

Check these points before signing

Ask the provider to answer each of these for the actual role, employer and workplace.

The sections below show the relevant source and applicable period for each reviewed fact, which matters more in China than elsewhere because the national rules, the local payroll examples, the 2026 holiday schedule and the 2025 wage survey all describe different scopes and dates.

Chinese employer cost is assembled city by city, on bases that are not the salary. Start with gross salary and calculate each employer contribution on its own applicable base, using the figures below as an illustration of ordinary covered employment in Beijing rather than as a national rate.

Build the cost for the actual city

For an ordinary covered employee in Beijing the employer pension rate is 16% and the employee rate is 8% of the applicable contribution base, and Beijing's August 2026 guidance confirms that employee social-insurance rates were unchanged when the bases changed. Apply the current floor and ceiling and confirm the employee's coverage.

For the same employee the employer pays 9.8% for basic medical insurance including maternity insurance, while the employee pays 2% plus CNY 3 monthly, calculated on the applicable contribution base subject to the current floor and ceiling. Do not add a separate standard maternity percentage to that 9.8% again, and treat other cities and coverage categories as requiring their own calculation.

Beijing's ordinary unemployment contribution is 0.5% from the employer and 0.5% from the employee on the applicable contribution base, and the August 2026 notice confirms those rates did not change with the new bases. Check the current local policy and the employee's participation category when calculating payroll elsewhere.

Work-injury contributions are paid by the employer with no employee contribution under Beijing's published table, and its industry benchmark rates range from 0.2% to 1.9%, with the assigned rate able to be adjusted under the scheme. Ask for the actual rate and contribution base for the employing entity rather than using a flat 1% for every hire.

For the contribution year from 1 July 2026 to 30 June 2027, Beijing's normal housing provident fund contribution range is 5% to 12% for the employer and the employee, with the monthly base generally using the employee's prior-year average wage, a CNY 36,348 ceiling and a CNY 2,540 ordinary floor. Separate treatment applies to basic-living allowances, approved hardship reductions or deferrals are possible, and the registered rate and base both need confirming.

The bases are the part that most often makes a quote wrong. From July 2026 Beijing's monthly contribution base for employee pension, unemployment, work-injury and basic medical insurance including maternity is bounded by CNY 7,270 and CNY 36,348, a floor higher than the minimum wage, with the authority providing for adjustment amounts after the new bases were announced in August. Housing-fund bases are separate again, so a single percentage of current salary can misstate the cost in either direction.

Follow a CNY 10,000 salary example

Assume CNY 10,000 monthly gross salary and CNY 10,000 as each relevant contribution base for an ordinary covered Beijing employee.

So a CNY 10,000 salary costs between CNY 13,130 and CNY 13,830 before the assigned work-injury contribution, provider fees, agreed bonuses, benefits, overtime and any relevant exit costs. Confirm the actual bases rather than assuming they always equal the current salary.

Withhold tax and keep payment evidence

Resident combined income from employment and specified other sources is taxed at progressive rates of 3% to 45%, after the CNY 60,000 annual standard deduction and the applicable specific, additional and other deductions, with statutory limits on employee social-insurance and housing-fund deductions. Non-residents have a different monthly treatment for employment income. The employer withholds the tax, and residence, overseas income and individual reliefs need a case-specific calculation.

One thing cannot be agreed away. A promise or agreement not to pay compulsory social-insurance contributions is invalid, and the 2025 Supreme People's Court interpretation confirms that an employee can seek termination and economic compensation for an employer's failure to contribute. Paying a cash allowance instead settles nothing, so ask the employer for registration and remittance records, including the rules for a cross-region dispatch.

The employer must provide a wage statement and retain written payment records for at least two years, recording the amount, the date and the recipient together with the required acknowledgement. Deductions need a lawful basis, including employee tax and social insurance, and when employment ends the national wage-payment rules require wages to be settled at termination, subject to the applicable local payment procedures.

There is no national minimum wage in mainland China, so the floor comes from the employee's city. Shanghai's full-time monthly minimum is CNY 2,740 from 1 July 2025 and Beijing's is CNY 2,540 from 1 September 2025, with non-full-time hourly rates of CNY 25 and CNY 27.70 respectively. Shanghai's monthly minimum excludes overtime, specified allowances and the employee's statutory social-insurance and housing-fund contributions, so confirm the actual city, category and components before setting pay.

Use the employee's local wage floor

The two cities most often quoted look like this.

Check the category and the items excluded from the minimum. These are examples rather than the rate for every employee in China, and note that Beijing's higher hourly figure alongside its lower monthly one is not an error but a different category.

Interpret the salary statistics correctly

The National Bureau of Statistics reports 2025 annual average wages of CNY 129,441 in urban non-private units and CNY 71,590 in urban private units, released on 15 May 2026, covering urban legal entities with at least five workers and excluding individual businesses and freelancers.

Those are separate gross-pay populations including employee tax and contribution deductions, and non-private units include public bodies and qualifying foreign-invested employers, which is why the gap between them is so wide. Use the city, occupation and experience to set an offer, because neither figure is a current role-specific salary.

Agree pay dates and annual payments

Ordinary wages must be paid at least monthly on the date agreed with the employee, and if that date falls on a rest day or holiday, pay on the nearest preceding working day. Payment must be in legal currency, bank payment is permitted, the special non-full-time category has a maximum 15-day payment interval, and payroll cut-offs and funding need to be agreed early enough for the employer to meet the pay date.

Do not assume a nationwide statutory thirteenth-month salary for an ordinary hire. Specify any annual, performance or thirteenth-month payment in the contract or the applicable policy, including the eligibility, calculation, payment date and treatment on leaving, and note that the employer must honour binding pay and collective terms. Ask whether the provider's quote includes those amounts.

Budget the applicable social insurance, housing fund, statutory leave and overtime before adding private health cover, extra annual leave, bonuses or home-office support, agreeing the amount, eligibility and payment terms for each extra benefit. A quoted market allowance or thirteenth salary is not a uniform legal requirement, while applicable collective agreements and binding employer commitments are.

Statutory annual leave in China is modest and depends on cumulative service across employers rather than on tenure with you, which means a new hire can arrive with ten days already earned.

Calculate paid annual leave from cumulative service

An eligible employee with at least one year of continuous work receives five paid working days with one to less than ten years of cumulative service, ten days with ten to less than twenty years, and fifteen days from twenty years.

Relevant service with previous employers counts, statutory holidays and weekly rest days are excluded, and certain lengthy paid personal or sick absences can remove that year's statutory entitlement.

A qualifying new hire's annual leave is prorated for the calendar days remaining in the year, with fractions below one full day discarded, and at exit the qualifying unused entitlement is prorated too. Where the employer does not provide due leave under the legal rules, payment is 300% of the relevant daily wage including the normal pay already made, while an employee's written refusal for personal reasons is treated differently. Better contractual terms still apply.

Set the 2026 holiday calendar

Chinese public holidays and Chinese public holiday breaks are two different things, and payroll has to distinguish them.

Since 1 January 2025 national statutory holidays total thirteen days: New Year one, Lunar New Year four including the eve, Qingming one, Labour Day two, Dragon Boat one, Mid-Autumn one, and National Day three. The published holiday breaks also include moved rest days, so keep those separate when calculating overtime, and note that some groups and local ethnic communities have additional specific holiday rules.

Those extended breaks combine statutory holidays with adjusted rest days, so they are not all payable at the statutory-holiday overtime rate if the employee works them.

Separate medical protection from sick pay

The protected period and the pay are two different systems, and confusing them is how a long absence becomes a dispute.

National rules provide a medical treatment protection period generally ranging from three to twenty-four months, depending on total working years and service with the employer, and local rules can differ. Shanghai, for example, starts with three months in the first year at the employer and adds one month for each additional completed year, up to twenty-four, with extension rules. That protected period is separate from the amount and duration of sick pay.

Shanghai's example uses 60%, 70%, 80%, 90% or 100% of the applicable wage for continuous sickness of up to six months according to service with that employer, with a separate 40% to 60% relief scale for longer sickness and a local floor of 80% of the current minimum wage, excluding employee pension, medical, unemployment and housing-fund contributions. Other locations require their own calculation, and pay does not automatically move to social insurance after six months.

Combine national and local family rights

Family leave in China is a national floor plus a local addition, and the local part is often the larger one.

National maternity leave is 98 days, including up to fifteen days before birth, with a difficult birth adding fifteen days and each additional baby in a multiple birth adding fifteen days, while pregnancy loss has separate fifteen-day or forty-two-day rules depending on the stage. Local birth leave is additional: Beijing ordinarily adds sixty days for a qualifying birth, giving 158 days before other applicable extensions.

For an insured employee the national maternity allowance is paid by the maternity insurance fund using the employer's prior-year average monthly employee wage, and if the employee is not insured the employer pays by reference to her pre-leave wage. Local rules govern the detailed entitlement, the additional birth leave and any pay balance, and Beijing says wages must not be reduced during its qualifying maternity and paternity leave. Confirm the funding and the payment timing before leave starts.

Beijing provides fifteen days of paternity leave for a qualifying birth with wages protected, which is a Beijing example rather than a nationwide thirty-day entitlement. Other provinces and cities set their own rules, so confirm the employee's location, eligibility, scheduling and evidence requirements before putting an allowance into the contract or the payroll system.

For a qualifying birth in Beijing, each parent receives five working days of parental leave each year before the child turns three, with the year measured by the child's birthday. With the relevant employers' agreement the couple can adjust the allocation within the local rules, up to ten working days combined, and other locations have different entitlements.

The national rules also provide one hour of nursing time during the working day for a mother feeding a child under one, plus an extra hour for each additional baby in a multiple birth, and employers must not assign overtime or night work during that nursing period. From seven months of pregnancy overtime and night work are also prohibited, and necessary prenatal checks count as working time.

Check other family leave

Check the local marriage, bereavement and other family-leave rules together with the applicable collective or employer terms. Beijing's April 2025 guidance describes marriage leave as generally eight to ten working days, being one to three days under the referenced rule plus seven additional working days, so do not apply a single national three-day or thirty-day marriage entitlement to every hire. Statutory leave pay follows the applicable rules.

Beijing also provides up to ten working days of care leave a year for an only child whose parents need care under the local family-planning rules, which is not a universal national family-care allowance. Confirm eligibility, evidence, scheduling and the applicable pay treatment with the employer, and check the rules in the employee's actual location.