New Issue of China Briefing: Social Insurance and Payroll

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Oct. 1 – The new issue of China Briefing Magazine, titled Social Insurance and Payroll, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the month of October.

When the “Interim Measures for Participation in the Social Insurance System by Foreigners Working within the Territory of China” came into effect last October, the inner workings of the social insurance system became even more relevant to the average foreign investor.

While social insurance is based on such guidelines issued by the central government, implementation varies geographically, and the inclusion of foreigners in the social insurance system is a key example of this. As we discuss here, Dalian currently requires only pension payments to be made on behalf of foreign employees, while Shenzhen requires payment of three insurances, and Beijing, Suzhou, Tianjin, and Xiamen require payment of all five insurances. Shanghai’s participation is voluntary (for now). Such variation and the frequent changes in mandatory benefit requirements make this an area easy to be caught out of compliance.

So in this issue, we take a “back to basics” approach to China’s mandatory benefits. Where, exactly, is that extra 35-40 percent on top of an employee’s salary going? What are social insurance contribution rates, base amounts, and tax exemptions? How does all of this figure into the payroll process? We next look at mandatory benefits as a piece of the larger payroll puzzle, with highlights on two very China-specific pieces: FESCOs and hukou, China’s “domestic passport.”

In this issue:

  • Mandatory Benefits in China: Employer Obligations
  • FESCO as a Tool for Payroll and Labor Dispatch
  • Figuring Mandatory Benefits into the Payroll Process

Social Insurance and Payroll is out now and immediately available as a complimentary PDF download on the Asia Briefing Bookstore.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

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