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SALARY PAYMENT IN Chinese Yuan (CNY, ¥)
CONTRACT LANGUAGES Mandarin & English
PAYROLL TAX 39.50% – 41.20%
PAYROLL CYCLE Monthly
TIME TO HIRE 12 hours
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As the most populous country in the world, there is, perhaps, no consumer market more appealing to growing international businesses than China. Furthermore, its global reputation as a manufacturing hub, means that many industries can benefit from opening a location in China. The complexity of local labor and business regulations mean, however, that it is generally preferable to hire employees in China with the support of a local partner. This ensures that your hiring is fully compliant, and that the best employees are sourced in-country.
Population 1.4B(746.5M Labor Force) | Capital City Beijing | Languages Spoken Mandarin (2nd most spoken language), plus regional dialects |
Currency Renminbi (RMB) | GDP per capita $12,556 | Ease of Doing Business 31st in the world |
Minimum Wage Around 20 RMB/hour (varies by region) | Average Wage 46 RMB/hour | Paid Leave 10-15 days |
In 2020, China’s GDP grew by 2.2% — an excellent result, given the challenges of the global pandemic. Then, in 2021, China fully recovered and moved its growth rate to 8.2%. While growth has slowed in 2022 along with the rest of the world, the growth forecast is still around 3.2% — an enviable figure.
With the second largest economy in the world, and the largest consumer market in Asia, China is a common location to initiate an Asia-Pacific expansion. While China has a diversified economy, technology and eCommerce brands are growing to become the dominant industries from an international perspective.
China has relatively strict labor laws that help to protect both employees and employers. This means it is important to understand your obligations before hiring employees in China.
Some of the most important labor laws in China relate to parental leave, sick leave, termination notice periods, severance, and working hours. For more information, check out our guide to China labor law and regulations.
Doing business in China is appealing to many global businesses, but operating there requires an in-depth understanding of local business culture. Two key aspects of business culture in China include:
1. Relationship-building (Guanxi) — this means seeing business engagements as more than just transactions, but rather built on mutual trust.
2. Saving face (Mianzi) — this means preserving the dignity and standing in a social context, even in the face of disagreement.
You can read more about these concepts in the context of business and employment relationships in our guide to motivating China-based employees.
For foreign businesses starting out in China, it often makes sense to use a recruitment agency in China to identify and secure top local talent. Having the local staff can really make a difference when trying to secure top-notch talent for your business quickly.
While interviewing in China has some similarities to the North American and European interview style, there are some differences to keep in mind.
Each interview will start off with a handshake greeting. However, it is also not uncommon for both parties to make a brief bow to each other. When stating names, it is common to state the surname first. In addition, the interviewers/employers should also state their titles.
It is common for some ‘break the ice’ questions to be asked to build initial trust, before launching into the main part of the interview. The interview will generally conclude with a handshake and information on next steps in the process.
You are allowed to ask a candidate’s previous salary; however the candidate does not need to disclose that information to you.
Salary increases can vary greatly when employees change jobs, but generally cap at around a 15% – 20% increase (or a 5%-10% increase for employees who are already very highly paid). In some rare cases, the salary increase may be more for employees who are changing jobs – but only for candidates who are already underpaid, or in cases where industry demand explodes (for example, Machine Learning Engineers in China in the mid-2010s).
Onboarding employees in China can be a bureaucratic challenge. There are various labor laws and tax regulations that differ regionally. In addition, things like social security and minimum wage differ throughout mainland China. This is why it is strongly recommended to seek the advice of a trusted local partner, such as an Employer of Record, when it comes to hiring employees in China.
Important tools for remote work in China include DingTalk by Alibaba, Feishu by ByteDance, and Wechat Work (“WeCom”) by Tencent. These allow for video calls, chat, document storage and project management just as easily as more familiar products like Microsoft Teams and Slack.
Microsoft has announced that it is introducing a localized version of Microsoft Teams in early 2023.
In China, national holidays are as follows:
| Date | Holiday name |
|---|---|
| 1 Jan Sunday | New Year’s Day |
| 21 Jan Saturday | Spring Festival Eve |
| 22 Jan Sunday | Lunar New Year |
| 23 Jan to 27 Jan | Spring Festival Golden Week holiday |
| 8 Mar Wednesday | International Women’s Day |
| 3 Apr to 4 Apr | Qing Ming Jie holiday (Tentative Date) |
| 5 Apr Wednesday | Qing Ming Jie |
| 1 May Monday | Labour Day |
| 4 May Thursday | Youth Day |
| 22 Jun Thursday | Dragon Boat Festival |
| 23 Jun to 24 Jun | Dragon Boat Festival holiday (Tentative Date) |
| 29 Sep Friday | Mid-Autumn Festival |
| 1 Oct Sunday | National Day |
| 2 Oct to 7 Oct | National Day Golden Week holiday |
A normal annual salary increase for employees in China is between 3% and 6%. This increase can be determined by company success or performance of the employee.
It is possible to conduct your recruitment alone and post jobs to WeChat and LinkedIn, however, without a local partner the risk of making a mistake/non-compliance is quite high. And once recruited, you still need a compliant entity to actually employ staff within China.
With a large regional office, and 40+ Shanghai-based staff, Horizons is there to help your business understand the ins and outs of the Chinese employment market. Our experts will help you hire, onboard, and pay your employees in China, all personalized to your needs.
Your business can easily hire employees in China without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
Holiday Schedule in China [2023]
