Open-ended contracts must be in writing within one month of the start date (double-wage penalties otherwise) and become mandatory after 10 years' service or, generally, after two consecutive fixed-term contracts.
Fixed-term contracts are common and must be written; after two consecutive fixed terms (or 10 years' service) the employee can generally demand an open-ended contract on renewal.
Standard system is 8 hours/day, 40 hours/week; overtime is capped at 36 hours/month and paid at 150% (weekdays), 200% (rest days) and 300% (public holidays).
Probation is capped by contract length (1/2/6 months); only one probation per employer and probation pay must be at least 80% of the contract wage.
A 13th-month payment is not legally required but widely customary, typically paid before Chinese New Year, and becomes binding if promised in contract or policy.
No general job-title regulation, but licensed professions (doctors, teachers, lawyers, accountants, construction engineers) require state qualification certificates.
Shanghai employer: pension 16%, medical incl. maternity ~9%, unemployment 0.5%, work injury ~0.2-1.9% (industry-rated), plus housing fund 5-7% — approx. 26-27% + housing, on a capped base (~CNY 37,302/mo, floor ~CNY 7,460, 2025/26).
Shanghai employee: pension 8%, medical 2%, unemployment 0.5% (=10.5%) plus housing fund 5-7%, on the same capped base; individual income tax is separate, progressive 3-45% after the CNY 5,000/mo standard deduction.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Employers must register employees for China's mandatory social insurance schemes plus the housing provident fund (Shanghai reference rates; retirement ages gradually rising from Jan 2025):
Work-related injury insurance is funded entirely by the employer at roughly 0.2%-1.9% of the capped payroll base depending on industry risk class (Shanghai reference). The social insurance fund covers medical treatment, disability grades and death benefits for occupational injuries.
Statutory severance is one month's average salary per year of service, with 6-12 months counted as one year and under 6 months as half a month's pay. For employees earning over three times the local average monthly wage, the monthly base is capped at 3x the local average and severance at 12 years' service. Severance is owed on employer-initiated lawful terminations, most fixed-term non-renewals and employer-proposed mutual terminations.
A 13th-month salary is not required by law but is a widespread market practice, usually paid before Chinese New Year. Once promised in the employment contract or internal policy it becomes enforceable.
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
