Mandatory Employee Benefits in China
The core statutory obligation for every employer in Mainland China is the "five insurances and one housing fund" (五险一金)—five social insurances plus the Housing Provident Fund. Employers must register local staff and remit combined employer-and-employee contributions each month. Crucially, China has no single national rate: contribution percentages, and the wage base they are calculated on, are set city by city, so the figures below are typical tier-1 (e.g., Shanghai) values that must be confirmed for the specific city of hire. In total, mandatory employer contributions usually add roughly 30%–40% on top of gross salary.
Employer (typical)
Employee (typical)
Pension insurance (养老保险)
16%
8%
Medical insurance (医疗保险)
~9%–10%
2%
Unemployment insurance (失业保险)
~0.5%
~0.5%
Work-related injury insurance (工伤保险)
0.2%–1.9% (by industry risk)
None
Maternity insurance (生育保险)
~0.8%–1% (merged into medical in many cities)
None
Housing Provident Fund (住房公积金)
5%–12% (matched)
5%–12% (matched)
Contribution
Pension insurance (养老保险)
Employer (typical)
16%
Employee (typical)
8%
Contribution
Medical insurance (医疗保险)
Employer (typical)
~9%–10%
Employee (typical)
2%
Contribution
Unemployment insurance (失业保险)
Employer (typical)
~0.5%
Employee (typical)
~0.5%
Contribution
Work-related injury insurance (工伤保险)
Employer (typical)
0.2%–1.9% (by industry risk)
Employee (typical)
None
Contribution
Maternity insurance (生育保险)
Employer (typical)
~0.8%–1% (merged into medical in many cities)
Employee (typical)
None
Contribution
Housing Provident Fund (住房公积金)
Employer (typical)
5%–12% (matched)
Employee (typical)
5%–12% (matched)
Contribution Base Cap & Floor
Contributions are calculated on a monthly wage base, not necessarily full salary. Each city sets a base ceiling of about 300% of the prior-year local average wage and a floor of roughly 60%. Salary above the ceiling is not subject to contributions, and salary below the floor is topped up to the floor. Because the local average wage is revised annually, the RMB cap changes every year and differs sharply between cities.
Housing Provident Fund (住房公积金)
The Housing Provident Fund is a mandatory, matched savings scheme used by employees to buy or rent housing. Employer and employee contribute the same percentage—commonly 5% to 12%—with the exact rate chosen by the employer within the local band. Both sides' contributions are deposited into the employee's individual fund account and are tax-advantaged within legal limits.
What the Social Insurances Cover
In return for the mandatory contributions, insured employees receive protection across the five social insurances. The main entitlements are summarised below; exact benefit levels and qualifying periods are set locally.
What the insured employee receives
Pension (old-age)
A monthly pension from statutory retirement age after at least 15 years of cumulative contributions, funded from a pooled account plus the employee's individual account.
Medical
Reimbursement of hospital and outpatient costs above local deductibles, plus a personal medical account for pharmacy and minor expenses.
Unemployment
A monthly unemployment allowance for involuntarily unemployed workers who contributed for at least one year, for a capped period.
Work-related injury
Medical treatment, disability benefits, and survivors' payments for work-related injury, illness, or death—funded entirely by the employer.
Maternity
Coverage of childbirth medical costs and a maternity allowance during statutory maternity leave (typically 98+ days, extended by local rules).
Insurance
What the insured employee receives
Pension (old-age)
A monthly pension from statutory retirement age after at least 15 years of cumulative contributions, funded from a pooled account plus the employee's individual account.
Medical
Reimbursement of hospital and outpatient costs above local deductibles, plus a personal medical account for pharmacy and minor expenses.
Unemployment
A monthly unemployment allowance for involuntarily unemployed workers who contributed for at least one year, for a capped period.
Work-related injury
Medical treatment, disability benefits, and survivors' payments for work-related injury, illness, or death—funded entirely by the employer.
Maternity
Coverage of childbirth medical costs and a maternity allowance during statutory maternity leave (typically 98+ days, extended by local rules).
13th-Month Pay & Year-End Bonus (年终奖)
Mainland China has no statutory 13th-month salary, but a year-end bonus (年终奖) is a deeply entrenched market norm and a key factor in attracting and retaining staff. It is customarily paid shortly before Chinese New Year and is commonly equivalent to about one month's salary, though it varies widely with company and individual performance.
Performance & Sector Variation
In technology, finance, and internet firms the year-end bonus frequently reaches several months' salary and is treated less as an optional perk than as a customary obligation. Because it is not statutory, the amount and eligibility conditions should be documented clearly in the employment contract or company policy to avoid disputes—Chinese courts have sometimes upheld employee bonus claims where terms were promised but unpaid.
Enterprise Annuity (企业年金)
An enterprise annuity (企业年金) is a voluntary, tax-advantaged supplementary corporate pension that tops up the basic state pension. It is one of the most valued long-term benefits, though only a portion of private employers—more often larger firms, state-owned enterprises, and multinationals—offer one. Both employer and employee contribute into an individual account managed under a government-regulated framework, with the employer's portion vesting according to the plan rules.
A common arrangement pairs an employer contribution of a few percent of payroll with a matched employee contribution, subject to caps that keep contributions tax-advantaged. For talent that weighs long-term security, an enterprise annuity is an efficient way to lift total reward without inflating headline salary.
Supplementary Benefits & Allowances
Beyond the statutory minimum, employers commonly enhance packages with the following non-mandatory benefits to stay competitive in China's tier-1 talent markets.
Supplementary Commercial Medical Insurance
Because statutory medical insurance carries deductibles, caps, and a limited provider list, most mid-sized and larger employers add supplementary commercial medical insurance so staff can access private hospitals, wider outpatient cover, and sometimes dental, optical, and health screening. Group life and accident cover are frequently bundled in, and cover may extend to dependents for senior roles. It is especially common in foreign-invested enterprises and for executives in tier-1 cities.
Meal, Transport & Housing Allowances
Cash allowances are a standard part of many Chinese packages. Common examples include a meal allowance (or subsidised canteen), a transport or commuting allowance, and—especially for relocated or senior staff—a housing or accommodation allowance. Some employers also provide a mobile phone or communication allowance.
High-Temperature Allowance (高温津贴)
The high-temperature allowance is a statutory summer payment for employees working in hot conditions (typically outdoor work above 35°C, or indoor workplaces that cannot be cooled below 33°C). It must be paid in cash and cannot be replaced with drinks or cooling goods. Amounts and the payment months are set locally—for example, Beijing pays around RMB 180 per month for outdoor workers and RMB 120 indoors, while other cities set their own summer rates.
Additional Leave & Flexible Working
Employers often grant annual leave above the statutory minimum (which starts at 5 days), and increasingly offer hybrid or flexible working—particularly in technology and multinational companies—as a low-cost, high-value retention tool. Training budgets, certification sponsorship, and wellness perks are also popular in competitive hiring markets.
Statutory Leave, Holidays & Minimum Wage Context
Statutory paid time off and the city-based minimum wage form the baseline that every compensation package must sit above. The key statutory reference points are summarised below (see the Employment Law page for full detail).
Annual (vacation) leave
Based on cumulative work years: 5 days (1–10 yrs), 10 days (10–20 yrs), 15 days (20+ yrs); none in the first year.
Unused annual leave
Paid at 300% of normal daily wage (inclusive of normal pay) if the employer does not arrange the leave.
Public holidays
13 paid public holidays per year (raised from 11 effective 1 January 2025).
Holiday work premium
At least 300% of normal wage for work on a statutory public holiday (200% on a rest day).
Minimum wage
City/province-based; no national rate. Highest in Shanghai (~RMB 2,740/month), Beijing ~RMB 2,540, Shenzhen ~RMB 2,520; lower-tier regions from ~RMB 1,650.
Item
Statutory position
Annual (vacation) leave
Based on cumulative work years: 5 days (1–10 yrs), 10 days (10–20 yrs), 15 days (20+ yrs); none in the first year.
Unused annual leave
Paid at 300% of normal daily wage (inclusive of normal pay) if the employer does not arrange the leave.
Public holidays
13 paid public holidays per year (raised from 11 effective 1 January 2025).
Holiday work premium
At least 300% of normal wage for work on a statutory public holiday (200% on a rest day).
Minimum wage
City/province-based; no national rate. Highest in Shanghai (~RMB 2,740/month), Beijing ~RMB 2,540, Shenzhen ~RMB 2,520; lower-tier regions from ~RMB 1,650.
Conclusion
Ensure your compensation and benefits packages in Mainland China are competitive, compliant, and aligned with local expectations. With Glints as your partner, you gain regional expertise that keeps your offerings attractive to top talent while adhering to China's city-specific social insurance, housing fund, and labour regulations.
Book a call with our team to explore how we can support your compensation and benefits strategy for a stronger, more compliant workforce in China.
What the Social Insurances Cover