Payroll is a service based on managing an employee’s compensation ,calculation, and employer’s contribution. This service is an important aspect belonging to the employees’ administration. The pay is a periodic administrative formality required to meet certain criteria. The payroll management service also ensures the employee and employee’s tax monitoring on wages. These taxes will be another important procedure to be followed for any employer in China. INS accompanies you throughout these administrative processes in order not to leave any risk of illegality or related to cash management problems.
- Hiring (Statements for social, retirement, mutual)
- Contract Amendment
- Termination of employment contract (balance of all accounts, certificates of work …)
As an expatriate in China, you have to pay taxes. The fiscal environment in China is very unstable especially for expatriate workers as the Chinese law may undergo several changes from one year to another, and it is necessary to keep oneself updated regularly in order not to face an irregular situation. It is not always easy for expats to deal with this.
Apart from the various services it offers, INS informs its consultants regularly about evolutions of Chinese tax laws and supports them in the payment of their taxes to the Chinese authorities, throughout their contract.
Thanks to all the knowledge INS has gained during its years of experience, we have established ourselves as a key partner in the area of paying taxes for foreign workers.
After evaluating the profile of each consultant (age, title, responsibilities), INS declares to the competent tax authorities income tax and other taxes related to the professional activities of consultants. The tax reporting is done monthly, see below calculations (in CNY):
City Employee Total Cost Net Salary (RMB) Shanghai Foreigner 137.11 6,000.00 Shanghai Foreigner 338.89 8,000.00 Shanghai Foreigner 706.25 10,000.00 Shanghai Foreigner 2,160.00 15,000.00 Shanghai Foreigner 3,826.67 20,000.00 Shanghai Foreigner 5,493.33 25,000.00 Shanghai Foreigner 7,160.00 30,000.00 Shanghai Foreigner 9,107.14 35,000.00 Shanghai Foreigner 11,250.00 40,000.00 Shanghai Foreigner 13,392.86 45,000.00 Shanghai Foreigner 15,969.23 50,000.00 Shanghai Foreigner 18,661.54 55,000.00 Shanghai Foreigner 21,353.85 60,000.00 Shanghai Foreigner 24,800.00 65,000.00 Shanghai Foreigner 28,890.91 70,000.00
FOREIGNERS’ SOCIAL CONTRIBUTIONS
Since the reform of July 1st 2011, there is a regulation that requires the payment of social security contributions (pension insurance, maternity, unemployment and health). All foreigners with work permits and residence are affected by this regulation. INS will notify you the additional costs.
Items Beijing Shanghai Guangzhou Entreprise Employee Company Employee Company Employee Company Retirement 20% 8% 22% 8% 20% 8% Unemployment 1% 0.20% 1.70% 1% 2% 1% Work Accidents 0.30% 0.50% 0.50% Maternity 0.80% 0.80% 0.85% Disease 10% 2% + ¥3.00 12% 2% 8% + ¥11.81 2% Total 32.10% 10.20% + ¥3.00 37% 11% 31.35% + ¥11.81 11%
The short term objective is to unify the national contribution rate (employer and employee) for retirement, and at the provincial level the one contributing to the management of health care, unemployment and work accidents. In fact, this is far from being the case, the contribution rate are indeed charged according to cities; however, non-harmonization of contribution rate tends not to help workers or foreign companies that are struggling to deal with the issue.
Thus, there is a discrepancy in the application of this Act: in Canton or Shenzhen the local taxes Bureau collects out these amounts of incoming money in the bank account of the expatriate company, but in Beijing or Shanghai, there is still not this implementation.