Shanghai’s Social Insurance Contribution Base: Upper and Lower Limits Updated
Shanghai’s social insurance contribution base standards for the year 2019 were announced by the Shanghai Municipal Human Resources and Social Security Bureau on March 20, 2019.
From April 1, 2019, the social insurance contribution base lower and upper limits have been increased to RMB 4,699 (US$700.14) and RMB 23,496 (US$3,500.86), respectively.
Last year, the lower limit was RMB 4,279 (US$637.56) and the upper limit was RMB 21,396 (US$3,187.96).
According to the Social Insurance Law, the lower and upper limits are 60 percent and 300 percent of the previous year’s monthly average salary of public employees. That means that the monthly average salary of public employees in Shanghai in 2018 was approximately RMB 7,832 (US$1,166.95), an increase of 9.81 percent.
Determining the social insurance contribution base
The lower and upper limits of the social insurance contribution base determine the minimum and maximum social insurance payments for both employers and employees.
For example, even if an employee earns less than the lower limit – in this case, RMB 4,699 (US$700.14) – both the employer and employee must make social insurance contributions as if the lower limit is the salary.
Likewise, employers and employees cannot make social insurance contributions above the upper limit. That means that for the purposes of calculating social insurance premiums, the salary can be considered no higher than RMB 23,496 (US$3,500.86) per month, even if in reality the employee is paid far more than that amount.
The upper and lower limits of the social insurance contribution base in Shanghai has more than doubled over the last decade. The yearly changes can be seen in the table below.
China Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Dalian, Beijing, Shanghai, Guangzhou, Shenzhen, and Hong Kong. Readers may write to email@example.com for more support on doing business in China.