China – Employment Terms and Conditions

What are the standard working hours in China, and how is overtime regulated?

China’s working hour regulations set a ceiling of 8 hours per day and 40 hours per week as the standard for most formal employment. The law also references a 44-hour weekly cap, which reflects older provisions still observed by some employers. In contemporary practice, however, a 40-hour week is the norm across most organised employment settings.

Employers are permitted to require overtime under defined conditions, but the law places firm limits on how much additional work can be demanded. As a general rule, overtime should not exceed one hour per day. In exceptional circumstances, and only where the employee’s health is not compromised, this may be extended — but the ceiling is three hours per day and 36 hours per calendar month.

Overtime compensation under the standard working hour system is tiered according to when the extra work takes place. Overtime on a regular working day must be paid at no less than 150% of the employee’s standard wage. When an employee works on a scheduled rest day and cannot be given a compensatory day off, the rate rises to at least 200%. Any work performed on an official public holiday must be compensated at no less than 300% and cannot simply be offset with time off in lieu — the enhanced payment is mandatory.

Some employers operate under a comprehensive working hour arrangement, where hours are calculated across an extended reference period — which could be a month, a quarter, or a year. Provided the cumulative total of hours worked within that period stays within the limits set by labour law, employees under this system may work more than eight hours on a given day or more than 40 hours in a given week. What matters is that the overall average remains compliant when assessed across the full calculation period.

From January 1, 2025, adjustments were made to the official working day calculations: the monthly working day figure shifted from 20.83 to 20.67, and the annual working hour standard dropped from 2,000 to 1,984 hours. Any hours worked beyond 1,984 per year will now attract overtime pay. The notorious “996” work pattern — whereby employees work from 9am to 9pm across six days a week — contravenes these rules outright, and the regulatory environment has shifted decisively. Practices once overlooked by authorities are now actively being pursued, with foreign-invested companies sometimes serving as high-profile enforcement targets.

Labour law in China additionally mandates minimum rest provisions: every employee is entitled to at least one full rest day per week, normally falling on Saturday and Sunday under the standard arrangement. Exemptions from overtime restrictions exist in limited circumstances for genuinely senior managerial roles, but these require formal approval from the local labour bureau. Employees seeking such status must hold real decision-making authority, receive compensation above the average, and have job responsibilities that inherently demand flexible scheduling.

What employment rights and benefits are workers entitled to in China?

Statutory annual leave entitlements in China are calculated on the basis of an employee’s total accumulated working years across all employers — not just their tenure with the current one. Employees who have been in work for less than one full year are not yet eligible for statutory paid annual leave. Once an employee passes the one-year mark, they become entitled to 5 days of paid leave annually, provided their service has not yet reached 10 years. Between 10 and 20 years of cumulative service, entitlement rises to 10 days, and employees with more than 20 years of service are entitled to 15 days each year.

Public holidays in China are established by the State Council at the national level and apply uniformly across all regions. There are no province-specific public holidays for employment law purposes, unlike in federal systems such as Canada. China recognises 7 statutory public holidays, which are frequently extended into longer consecutive breaks through government-directed adjustments to surrounding working days. From January 1, 2025, the total statutory holiday allocation increased by two days, with one additional day each added to the Spring Festival and Labour Day periods.

All female employees are guaranteed a minimum of 98 days of paid maternity leave under national law, and many provinces have legislated extensions bringing this figure to between 128 and 190 days. Both Shanghai and Beijing, for example, provide 158 days. Maternity leave pay is typically drawn from the social insurance maternity fund, provided the employer and employee have been making regular contributions. The amount is generally calculated based on the employee’s average monthly wage from the preceding year, subject to local upper and lower limits.

There is no national paternity leave provision in China. However, the majority of provinces have introduced their own paternity leave entitlements, most commonly around 20 days of paid leave, with figures ranging from 10 days in some locations to as many as 30 days in others. Fathers are generally required to present a birth certificate and satisfy any additional provincial eligibility conditions to access this leave.

Sick leave in China is governed by the concept of a “medical treatment period” — the maximum duration of protected sick leave to which an employee is entitled. The length of this period is determined by the employee’s cumulative years in employment. During the medical treatment period, sick leave pay is usually calculated as a proportion of the employee’s regular salary, commonly between 60% and 100%, subject to local minimum wage floors and internal company policies. Throughout this period, an employer is prohibited from dismissing the employee and must continue making salary payments at the prescribed rate.

Workers whose employment is ended by the employer are entitled to a severance payment equivalent to one month’s salary for each full year of service. For periods of less than one full year, service of under six months entitles the employee to half a month’s salary, while service between six months and one year is treated as a full year. Employees are also entitled to a minimum of 3 days of paid marriage leave at the national level, with certain provinces extending this to as many as 30 days.

One important distinction for expatriate families: foreign workers may be limited to the national baseline of 98 days of maternity leave and may not benefit from provincial extensions. This can be a significant consideration and is worth discussing in advance with both the employer and the local social security bureau before a pregnancy occurs.

What are the rules around minimum wage and pay in China?

China does not operate a single national minimum wage. Instead, each province and major municipality sets its own wage floor, which is reviewed periodically. All employers are legally obligated to pay their employees no less than the applicable local minimum wage.

To illustrate the variation in rates across the country: effective September 1, 2025, Beijing’s monthly minimum wage rose from CNY 2,420 to CNY 2,540, while the corresponding hourly rate for part-time and non-standard workers increased from CNY 26.4 to CNY 27.7. Other economically significant cities such as Shanghai typically set rates at a comparable or higher level, while lower-cost inland provinces tend to apply more modest minimums. Workers should always verify the rate applicable to their specific city by consulting the local Bureau of Human Resources and Social Security.

The minimum wage represents the lowest sum an employer can legally pay in base remuneration. It excludes overtime payments, allowances for hazardous or special working conditions, and welfare-related contributions such as social insurance. As a result, the true cost to an employer of engaging a worker at minimum wage exceeds the stated figure once mandatory social insurance payments are factored in.

An entrenched custom in Chinese workplaces is the payment of a 13th-month salary, typically disbursed around the time of Chinese New Year. Some employers also pay a 14th month in connection with the Lunar New Year or Spring Festival period. This practice is widespread but is not a statutory requirement unless it has been included as a term of the employment contract. For the most current regional minimum wage figures, the Ministry of Human Resources and Social Security (MOHRSS) and local labour bureaus are the authoritative sources.

How does the employment contract system work in China?

China’s Labour Contract Law imposes a clear requirement that every employment relationship be set out in a written contract. Employers are legally bound to ensure that the contract addresses all statutory working conditions, including pay, working hours, public holidays, overtime compensation, social insurance contributions, and severance entitlements. These elements are not optional extras — they are mandatory components of every employment agreement.

The base salary — the guaranteed fixed monthly amount the employer will pay — must be explicitly stated in the contract. Beyond this, contracts typically cover the employee’s job title and scope of responsibilities, the designated place of work, the working hour arrangement, the overall remuneration structure, social insurance enrolment details, and any applicable probationary period.

Probationary periods are not compulsory under Chinese law, but where they are used, their duration is capped by the length of the overall contract. Probationary periods range from a maximum of one month for shorter contracts up to six months for longer-term arrangements. During this period, employees must receive at least 80% of their contractually agreed salary, though many employers elect to pay the full amount. Importantly, only a single probationary period may be imposed for any individual working relationship — an employer cannot reset the probation clock if a contract is renewed.

The principal contract types used in Chinese employment are fixed-term, open-ended (permanent), and part-time. Fixed-term contracts are widely used and can be renewed, but any dismissal during the probationary phase must be grounded in legitimate, non-discriminatory reasons — such as a genuine performance deficit or a mismatch with role requirements — and must follow proper process, including at least three days’ written notice.

Severance is capped at three times the local average monthly salary for the area in which the employer operates, with a service ceiling of 12 years (equivalent to 12 months of pay). Where a dismissal is found to have been unlawful, the maximum potential severance doubles to two months’ salary per year of service. Employment disputes are typically resolved through a sequential process: internal mediation is attempted first, followed by formal arbitration before the local Labour Dispute Arbitration Committee, and ultimately litigation through the courts if earlier stages are unsuccessful.

How does the workplace pension system work in China?

The cornerstone of China’s public retirement provision is the Basic Pension Insurance scheme, which is built around two distinct but interconnected pillars. The first is a social pooling account, which operates as a pay-as-you-go mechanism — contributions from today’s workforce are used to fund the pensions of current retirees. The second is an individual account, funded through each employee’s own contributions and reserved for their personal retirement benefit. Participation in this system is compulsory for all urban employees. Employers typically contribute around 16% of gross wages to the social pooling account, while employees contribute approximately 8% into their individual accounts. At retirement, beneficiaries receive both a basic pension drawn from the pooled fund and a payment derived from their individual account balance.

The structure has some resemblance to Australia’s superannuation framework in that it combines compulsory employer contributions with individually held accounts. However, unlike superannuation — which rings the contributions for each individual — the social pooling component redistributes funds to all current pensioners collectively. It also differs from the United Kingdom’s National Insurance model, which builds entitlement through qualifying contribution years without maintaining individual savings pots. China’s system blends features of both approaches.

Social security in China encompasses five distinct insurance programmes and one mandatory savings mechanism. The five insurance streams are: pension insurance, medical insurance (which incorporates maternity coverage), unemployment insurance, work-related injury insurance, and maternity insurance as a separately administered component. The housing provident fund requires matched contributions from both employer and employee, typically between 5% and 12% of the employee’s monthly salary, with the precise rate varying by city.

Since January 1, 2019, under the reforms introduced through the Scheme for Deepening the Reform of the State Tax and Local Tax Collection Administration System, responsibility for collecting all social insurance premiums has been transferred to the tax authorities. The practical obligation to calculate and remit contributions on behalf of both the company and the employee falls on the employer, even though both parties are legally liable for their respective shares.

Alongside the mandatory state system, China has introduced market-based supplementary pension plans designed to give individuals greater control over their retirement accumulation and the potential for higher investment returns. These voluntary private pension schemes allow individuals to contribute up to RMB 12,000 per year into dedicated individual pension accounts. For detailed guidance on contribution structures and the pension framework, the MOHRSS website and the State Taxation Administration are the principal official sources.

What types of pension arrangements are available to expats in China?

Since October 15, 2011, foreign individuals holding a valid Chinese work permit have been subject to mandatory social security contributions encompassing pension, medical (including maternity), unemployment, and work-related injury insurance under the China Social Security Law. This means most expatriates in formal employment will be enrolled in the state system and will build up contribution years while working in China.

An important exception applies to nationals of countries that have entered into bilateral social security exemption agreements with China. As of the most recent available information, ten such agreements are in force: those with Germany, South Korea, Denmark, Canada, Finland, Switzerland, the Netherlands, Spain, Luxembourg, and Japan. Agreements have also been signed with France and Serbia, but these had not yet entered into effect as of the latest information available. The scope of exemptions and the qualifying conditions differ between agreements, and local social insurance bureaus may apply their own interpretations in practice.

Certain cities — including Shenzhen and Tianjin — permit expatriates to participate in social insurance on a voluntary basis, an arrangement intended to draw in skilled international talent rather than impose a mandatory burden. Expats whose home countries have not concluded a bilateral agreement with China will generally be required to contribute to the full range of applicable insurance programmes throughout their employment.

Expatriates arriving in China with pension savings already accumulated in another country should be aware that China has no universal mechanism for recognising or consolidating foreign pension entitlements. That said, expats who have paid into China’s pension system and subsequently leave the country permanently may — under certain conditions — apply to withdraw their individual account contributions as a lump sum upon departure. The rules governing this are nuanced and have been revised over time, so it is essential to confirm current entitlements with the local social security bureau and to take advice from a qualified financial adviser before making any decisions involving international pension arrangements.

Private international pension plans held abroad are not recognised within China’s mandatory social security structure, though there is nothing to prevent individuals from continuing to hold and fund such arrangements privately, subject to whatever tax treatment applies in their country of residence. It should be noted that overseas social security contributions made by an employer — whether voluntary or compulsory — are subject to Individual Income Tax in China. This IIT liability generally arises at the point when the contribution is made, not when funds are eventually withdrawn.

What is the retirement age in China, and how does the pension eligibility system work?

On September 13, 2024, the Standing Committee of the 14th National People’s Congress formally approved a decision to gradually raise China’s statutory retirement age. The changes came into force on January 1, 2025, representing one of the most consequential reforms to the country’s labour system in a generation.

Under the new arrangements, the retirement age for male employees will be raised incrementally from 60 to 63 over a 15-year transition period beginning in 2025. The schedule advances at a rate of one month for every four months that pass, continuing until the new benchmark of 63 is reached. Female employees face varying adjustments depending on the nature of their roles: those in general positions will see the retirement age increase from 50 to 55, while women in management and professional-grade positions will move from 55 to 58.

Certain categories of workers in physically demanding or hazardous occupations retain access to early retirement provisions, enabling them to stop working up to five years before the standard age that would otherwise apply to them.

Eligibility for a full state pension requires a minimum of 15 years of contributions to the Basic Pension Insurance. The benefit received at retirement increases with longer contribution histories — those who have paid in for many decades beyond the minimum threshold will receive substantially more than those who have only just reached 15 years. The final pension amount is also influenced by local wage levels, the employee’s contribution record, and the region where their working life was primarily spent. Workers with fewer than 15 years of contributions may be eligible for reduced benefits or a lump-sum withdrawal, with the precise outcome determined by local regulations.

Additional elements of the reform package include the introduction of illness and disability benefits under the basic pension framework, the creation of a more flexible retirement model allowing individuals to retire somewhat earlier or later than the statutory age, and increases to public holiday entitlements that affect wage and overtime calculations. For the most current information on pension eligibility conditions, the Ministry of Human Resources and Social Security and local Social Insurance Bureaus are the appropriate points of contact.

What taxes and social contributions are deducted from wages in China?

Comprehensive income — which encompasses salaries, wages, bonuses, and most allowances — is subject to Individual Income Tax (IIT) at progressive rates ranging from 3% to 45%. Employment income is broadly defined to include cash pay, benefits in kind, marketable securities, and other economic advantages. Certain items are excluded from this: reimbursements of genuine business expenses and specified non-cash benefits provided to foreign employees are not treated as taxable income, provided the amounts are reasonable and backed by valid documentation.

IIT is withheld at source by the employer on a monthly basis. Employees whose annual income remains below RMB 120,000 are generally not required to submit an annual self-assessment declaration. Those earning above this threshold, or those who draw income from more than one source, will typically need to file an annual return with the relevant local tax authority.

On top of income tax, employees are subject to mandatory deductions for social insurance. Both employers and employees contribute to the pension scheme — employer contributions typically run at around 16% of the employee’s wage, while the employee contributes approximately 8%. For medical insurance, employers generally contribute around 10% and employees contribute approximately 2% plus a fixed medical savings element, though local rules introduce variation into these figures.

Social insurance contributions are calculated against a base that is subject to both a ceiling and a floor. The upper limit is set at 300% of the local average salary, while the minimum base is generally determined either by the local minimum wage or by a specified proportion of the local average salary. Local governments typically update both the average salary benchmark and the minimum wage once a year, which in turn recalibrates the upper and lower limits for social security contributions.

Pension payments received after retirement in accordance with the Social Security Law are classified as tax-exempt income and are not subject to IIT. For comprehensive guidance on tax obligations as a foreign worker in China, the State Taxation Administration of China is the primary official resource, and consultation with a tax adviser who has specialist knowledge of China’s IIT framework is strongly recommended.

What are the rules around trade unions and collective bargaining in China?

Trade union organisation in China follows a singular, state-aligned model. The All-China Federation of Trade Unions (ACFTU) is the sole legally recognised national union body, and every enterprise-level union chapter operates as part of this overarching structure. This stands in sharp contrast to the pluralistic systems found in countries such as Germany or France, where multiple independent unions compete for membership and bargain autonomously with employers. In China, the entire union movement operates within a single federated hierarchy that maintains close alignment with state labour policy.

Before scheduling overtime work, employers are legally required to consult with the trade union and the affected employees. Enterprise-level union chapters are most commonly found in larger state-owned enterprises, joint ventures, and substantial private companies. Collective agreements may be reached at either the enterprise or sector level and can establish entitlements that exceed statutory minimums. However, the ACFTU’s capacity for genuinely independent collective bargaining is more constrained than that of union bodies in many other countries.

Foreign nationals employed in China are not legally barred from joining an enterprise union where one exists. In practice, however, expat participation is limited, and most foreign workers do not take an active role in union affairs. That said, where a collective agreement covers the workplace, all employees — regardless of nationality — benefit from its protections. When disputes arise between employers and employees, the preferred first step is mediation. Should mediation fail to resolve the matter, parties may proceed to formal arbitration before the Labour Dispute Arbitration Committee, and ultimately to litigation through the courts.

Are there any particular employment protections or challenges that expats should be aware of in China?

Employment contracts in China are most commonly prepared exclusively in Mandarin Chinese, and in the event of any dispute the Chinese-language version will be treated as legally authoritative. Expats should always insist on receiving a bilingual contract and arrange for an independent legal review before appending their signature. Differences between a translated version and the original text have been the root cause of numerous disputes involving foreign workers.

In China, both the work permit and the residence permit are tied directly to a specific employer. Moving to a new job requires the new employer to sponsor and complete a fresh work permit application, and a period of legal uncertainty can arise during any transition between positions. From December 1, 2024, the Foreigner’s Work Permit was consolidated into the social security card, simplifying certain administrative processes — but the fundamental dependency of visa status on the employment relationship remains unchanged. If employment ends, a foreign national’s legal entitlement to remain in China is immediately affected.

For organisations operating in China under foreign ownership or management, the central question is not whether Chinese employment law applies to them — it does, unequivocally — but rather how diligent compliance will affect day-to-day operations. Expats employed by foreign-invested enterprises are generally entitled to the same statutory protections as their Chinese colleagues, but should satisfy themselves that their contract explicitly confirms this and that all required social insurance registrations have been carried out promptly.

Engaging full-time workers under the guise of independent contractor or consultancy arrangements to sidestep tax obligations or employment benefits is unlawful under Chinese labour law. If such arrangements are identified by regulators, employers can be compelled to retrospectively formalise the relationship through an employment contract, pay outstanding wages and social insurance contributions, and face financial penalties. Expats should be cautious about accepting arrangements that characterise them as consultants or self-employed individuals if the substance of the working relationship is indistinguishable from regular employment.

Recognition of overseas professional qualifications in China is handled on a profession-by-profession basis. In regulated fields such as medicine, law, and accountancy, Chinese licensure is generally required and, in some cases, Chinese citizenship is a prerequisite. Expatriates more commonly find employment in sectors where international credentials carry greater weight: international schools, multinational corporations, financial services, technology, and higher education institutions tend to be more accommodating of foreign professional backgrounds. It is always advisable to confirm the qualification recognition requirements for your specific profession with the relevant Chinese regulatory authority before committing to relocation.

Frequently asked questions

Can I use my overseas professional qualifications to work in China?

The answer varies by profession. In many areas of international business, technology, and education, overseas qualifications are broadly accepted by employers. However, in regulated professions such as medicine, law, and accountancy, Chinese licensing is typically mandatory, and some roles are legally restricted to Chinese nationals. Before assuming your foreign credentials will transfer directly, verify the position with the relevant Chinese professional regulatory or licensing body.

What happens to my pension contributions if I leave China before retirement?

Expatriates who have contributed to China’s Basic Pension Insurance and subsequently leave the country on a permanent basis may, under certain conditions, apply to receive their individual account balance as a lump-sum withdrawal. The conditions for doing so vary by region and have been amended over time. Workers are not generally entitled to any portion of the social pooling fund. Before departing, confirm the current rules with your local Social Insurance Bureau and consider seeking advice from a qualified financial adviser familiar with cross-border pension matters.

Do my employment rights change if my visa or work permit changes?

Your core statutory rights under China’s Labour Law are attached to your employment contract, not to your visa category. However, if your work permit lapses or is revoked without renewal, you no longer hold the legal right to work in China, which effectively terminates the employment relationship. Whenever your employment circumstances change, ensure that your work permit documentation is updated accordingly, and inform your employer without delay of any developments affecting your immigration status.

Are foreign workers entitled to the same annual leave as Chinese nationals?

Yes. The statutory annual leave entitlements of 5, 10, or 15 days — determined by total years of service — apply equally to foreign nationals who hold valid work permits. However, certain locally extended leave provisions, particularly the provincial extensions to maternity leave, may not apply to foreign workers in the same way they do to domestic employees. Confirm the specifics of your entitlements with your employer and the local social security authority.

Is it common for employment contracts to be in Chinese only?

Yes, this is common practice. The Chinese-language version of a contract is legally binding and takes precedence in any dispute. Always request a bilingual contract — in Chinese and in a language you understand fully — and have it independently reviewed by a qualified employment lawyer before signing. Relying solely on a translation provided by the employer carries real risk.

Do expats have to pay into China’s social insurance system?

In most cases, yes. Since October 2011, foreign nationals with a valid Chinese work permit have been required to contribute to pension, medical, unemployment, and work-related injury insurance. An exemption may apply if your home country has concluded a bilateral social security agreement with China. As of 2025, ten such agreements are in force. Contact your employer and the local Social Insurance Bureau to establish precisely what contributions you are required to make.

What should I do if my employer does not pay overtime correctly?

If you have grounds to believe that your overtime entitlements are not being met — whether at the 150%, 200%, or 300% rate applicable to the relevant circumstances — begin by raising the issue through your employer’s internal HR or management channels. If that does not resolve the matter, you may lodge a formal complaint with the local Labour Bureau or submit your case to the Labour Dispute Arbitration Committee. Maintain detailed written records of your working hours and any relevant correspondence with your employer, as these will serve as essential evidence in any formal proceedings.

Are there sectors where expats commonly encounter employment issues in China?

Difficulties frequently arise in the technology and startup sectors, where an excessive-hours culture has historically been normalised despite being prohibited by law. The teaching and education sector is another area requiring careful scrutiny: contract terms covering salary, accommodation, and travel allowances vary considerably between employers, and the specifics should be examined closely. Across all industries, expatriates should be alert to contracts drafted solely in Chinese, to working arrangements that may misclassify them as independent contractors, and to employers who delay completing social insurance registration. Where there is any doubt about the terms of a contract or working arrangement, independent legal advice should be obtained before proceeding.