China is known for its exceptional benefits and compensation laws that support employees. Before you hire any workers or set up a subsidiary, you need to understand each aspect of the law so you can pay employees a fair wage and offer additional benefits to stay above the competition.
China’s compensation laws
China’s minimum wage varies by province or city. Here are the monthly minimum wages in a few cities:
- Shanghai: CNY 2,590
- Shenzhen: CNY 2,360
- Beijing: CNY 2,320
- Guizhou: CNY 2,300
Please note that these figures are indicative only and are subject to change. An additional bonus or 13th-month salary is not a statutory requirement, but it is a market norm in China. Instead of a guaranteed bonus, you can state the monthly salary, how often employees will be paid, and the total annual salary in the employment contract. You can then specify that a bonus is not mandatory but will be dispersed under the right conditions. Sales employees often have a commission plan instead of this bonus.
Guaranteed benefits in China
In addition to compensation laws in China, you’ll find numerous guaranteed benefits and supplemental options for employees. For example, China celebrates 7 national holidays, and the statutory minimum includes paid leave for each one. However, many employers go above and beyond by giving employees flexibility around the Lunar New Year to avoid peak travel days.
Annual vacation is another example of guaranteed benefits in China. Mandated vacation days vary based on the employee’s accumulative total working experience:
- 0 days statutory paid annual leave for employees who have worked less than 1 year
- 5 days statutory paid annual leave for those who have worked between 1 year and 10 years
- 10 days statutory paid annual leave for those who have worked between 10 years and 20 years
- 15 days statutory paid annual leave for those who have worked 20+ years
Although this is the statutory minimum, international employers hiring mid-level or senior executives usually offer more vacation. It is not uncommon for offer letters to include 2 to 4 weeks of annual vacation time.
China benefits management
Companies have 2 main options for benefits management in China:
- Some employers may choose to provide benefits directly to employees. This process involves a complete understanding of compensation and benefits laws and a commitment to your subsidiary in China. You will need to make sure employees get every benefit they are entitled to as well as supplemental benefits.
- Companies may opt to partner with a global employer of record such as G-P. We take the stress out of managing global HR, payroll, benefits, and more — no entity setup needed.
Restrictions for benefits and compensation
Standard benefits and compensation restrictions include working hours, minimum wage, and annual leave. It is essential to study each law so that you stay compliant during every step of your global growth journey.
Partner with G-P to build your everywhere workforce.
As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.
Learn more about our platform and request a proposal today.