China How To: Registering staff for Social Welfare

Once you’ve set up your own company, you can start to hire Chinese staff, but to do that you’ll need to register them for China’s social welfare programs. Here’s an introduction to some of the rules concerning the recruitment of Chinese labor: whereas hiring foreign staff requires one to apply to the authorities to get them a work visa and work permit, and you are automatically eligible to hire Chinese as soon as you finish registering your employees’ social welfare accounts, as outlined below.

What are the Five ‘Insurances’ Plus the Housing Fund?

• Pension: Cost to Company is usually 20% of the Employee’s salary, substantially lower in some cities and cost to the Employee is usually 8% of the Employee’s salary, uniform rate nationwide.
• Medical Insurance: Cost to Company is usually between 7%-12% of the salary, substantially lower in some cities and cost to the Employee is usually 2% of the Employee’s salary, substantially lower in some cities.
• Work-Related Injury Insurance: Cost to Company from 0.4%-3% of salary depending on the location and degree of danger of business engaged in and cost to the Employee ‘ No contribution required.
• Unemployment Insurance: Cost to Company is usually 2% of salary but sometimes 1% and only 0.4% in Shenzhen and cost to the Employee is usually 1% of the Employee’s salary.
• Maternity Insurance: Cost to Company from 0.5% of salary depending on location (no contribution at all in Dongguan). Cost to the Company.
• Housing Fund: Contribution towards Housing Funds are mandatory and come from both the Company and the Employee determined by local Government, Housing Fund regulations apply to the Employees in all geographic regions of the country. Contributions must be calculated based on each Employee’s average monthly wage over the last year. The actual percentage differs per city or province.

Registering for your employees’ social welfare accounts

Go to your local Social Insurance Management Center to set up an account for your company. Each city will usually have one of these in each district. For the addresses of the first-tier Chinese cities, look towards the bottom of this article.

You will need the following documents to set up the account:

1. The original copy of your company’s business license, and a photocopy 
2. The original copy of your company’s organization code certificate, and a photocopy 
3. A stamp by your company chop
4. Company Registration Form of Social Insurance; you can get this at the center
5. The company bank account number
6. The company’s tax registration number
7. A commitment letter of use social insurance card signed, which you can obtain at the center

You can now start employing Chinese staff!

Registering your employees onto the employment record

Next, you need go to the local Human Resource and Social Security Bureau to register your employees onto the employment record.

You will need the following documents:

1. The original copy of your company’s business license, and a photocopy 
2. The original copy of your company’s organization code certificate, and a photocopy 
3. Your company’s official “chop” (aka stamp or seal)
4. Completed registration form of employment record with your new employees’ names and a brief introduction of each of them. You can get this in the bureau and it should be completed in triplicate; one should be submitted with the above documents at the Human Resource and Social Security Bureau, one copy should be submitted when you return to the Social Insurance Management Center (see below), and one should be kept for your company’s files.

Registering the employees

Now you must actually register your specific employees. You will only need to do the above two procedures the first time you employ a Chinese person; the following procedure applies for each Chinese person you hire from then on. Return to the Social Insurance Management Center with the following documents to register the employee (or, if they already have a social insurance card, use the following documents to change their employer’s information to your company).

1. Company Registration Form of Social Insurance 
2. Employee Personal Information Registration Form; you can get this at the talent center in the district where the company is registered (for first-tier-city addresses, see bottom of article)
3. A list of all the employees at your company
4. The original copy of your company’s business license, and a photocopy
5. The original copy of your local tax registration certificate, and a photocopy
6. A spreadsheet showing how much your employees are paid, how much is paid into their insurance and housing fund, and any bonuses they have been paid
7. Photocopy of insured employees’ ID cards

It takes about two months to get the new employee’s social insurance card ready, but they can begin working straight away and you will need to start paying into their social security account from their very first paycheck. 

Registering your employees with the housing fund

You can do this at any point in the process outlined above, or afterward. Go to the local Public Housing Fund Management Center (you can find addresses for the first-tier cities towards the bottom of this article) to set up a housing fund account. You will need the following documents, and it will take five working days to process: 

1. Public Housing Fund Deposit Form, which you can get at the center 
2. Your company’s business license and a photocopy 
3. Your company’s organization code certificate and a photocopy 

Once the account is set up, you can place your employees’ personal accounts under your company account. The documents needed to do this are: 

1. Personal Housing Fund Account Set-up Form, which you can get at the center
2. A photocopy of the employee’s ID card

How to transfer your employees’ personal archives

Every Chinese citizen at birth is given a personal archive, which is stored at the same local talent center where their hukou is registered. When people move home from area to area – for study or for employment – their personal archives are transferred along with them, to the relevant talent center. 

In order for the employee to get a Personal Archive Transfer Letter, you should give them a letter (with your company’s official stamp or “chop”) stating that they work for your company, as well as a stamped copy of your company’s license. They will then take this to the talent center in which your company is registered (depending on the size of the city in which your business is registered, this will either be a city talent center or a district talent center). 

After the talent center has given them the Personal Archive Transfer Letter, the employee should take it and their ID card to the talent center where their personal archive is stored; the transfer will then be processed.

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