Employer of Record in China

How an Employer of Record works in China

An Employer of Record (EOR) is a company that acts as an employer on behalf of another business.

It handles the administrative and legal aspects of a business, such as onboarding and dismissing employees, payroll, taxes, and employee benefits.

Many overseas business owners who want to hire employees in China use an EOR, as this removes the hassle and expense of setting up a registered legal entity there. It also relieves them from having to learn all the important Chinese employment laws.

Instead, these business owners remain free to focus on what they do best: managing their employees and growing their company.

Rivermate’s EOR services are built on three pillars:

• Local HR experts who understand the market and employment laws.
• A network of partners that allows us to provide competitive benefits.
• The Rivermate platform that simplifies every aspect of the employment relationship.

Using Rivermate to hire employees in China ensures they’ll be looked after by a reputable entity that understands all local laws and practices.

View Our Employer of Record Services

China labor market: At a glance

The hiring market
Greatest hiring activity:	Shanghai, Shenzhen, Beijing.
Hiring timelines:	Typically within seven days.
In-demand sectors:	Robotics, Artificial Intelligence, Clinical Research.
Sectors with skills shortages:	Tech, Manufacturing, Healthcare.

The salary market
Employer tax contributions:	Pension Medical Insurance Unemployment Insurance Work-Related Injury Insurance Maternity Insurance Housing Fund Rates differ depending on the region.
Monthly minimum wage:	It depends on the region. The lowest is ¥1,800 in Zhangjiajie Yongzhou Yiyang. The highest is ¥2,740 in Shanghai.
Average gross annual salary:	¥129,441.
Income tax rates:	Income tax is progressive, with brackets ranging from 3% to 45%, although each bracket includes a flat-rate deduction, with higher brackets deducting more.

What will it cost to hire in China?

China is a hard-working nation with a determined workforce, but hiring costs can differ dramatically depending on where an employee is based.

This huge country is divided into 22 provinces (or 23, if you include Taiwan). However, employment laws don’t only differ at a provincial level. In many cases, they will differ in two neighbouring cities within the same province.

Entrepreneurs are therefore advised to take care when choosing the location of their business, as this can greatly affect the cost of hiring employees.

Salary requirements

Minimum wage regulations are an example of employment law that differs across Chinese municipalities.

Typically, minimum wage standards are outlined in two forms; hourly and monthly.

The monthly standard applies to full-time employees, while part-time or temporary workers are more likely to be affected by the hourly standard.

As of September 2026, the lowest monthly minimum wage is ¥1,800 in Zhangjiajie Yongzhou Yiyang. The highest is ¥2,740 in Shanghai.

These are gross figures, as minimum wage standards include some taxes paid by employees.

Whenever minimum wage standards rise, other minimum financial standards for workers, such as overtime pay and various allowances, tend to increase as well.

Tier 1 Chinese cities, like Beijing, Shanghai, and Shenzhen, have higher minimum wage standards, partly due to a higher cost of living. Professionals in high-paying industries often relocate to these large cities in pursuit of better salaries.

Employer contributions

It is mandatory for employers in China to make contributions to the social insurance system for each of their employees.

This complex system is split into “the five social insurances”, plus a housing fund.

Pension insurance	Provides retirement income.
Medical insurance	Covers healthcare costs.
Unemployment insurance	Offers temporary financial support during unemployment.
Work Injury Insurance	Provides compensation for work-related injuries or illnesses.
Maternity Insurance	Covers costs related to childbirth and provides maternity leave benefits (often integrated with basic health insurance in some regions).
Housing Fund (住房公积金 - Zhùfáng Gōngjījīn)	A long-term savings plan for housing purposes. Funds can typically be used for purchasing, building, or renovating a home, or for rental payments.

Contribution rates differ regionally. This is important to note because employers must pay to the region where their employee is registered to contribute.

There are cases where a new employee is registered to contribute in a different region than where their employer is based. This can happen when they relocate for work, as an example.

In some cases, the employee’s registration can be transferred to their new municipality. However, this is not always viable.

Chinese employees also have to make social contributions, though it’s the employer’s responsibility to withhold these from their paychecks.

Statutory benefits

Chinese employees are entitled to paid annual leave, with the number of days given dependent on how long they’ve been in the Chinese workforce.

Years of service	Days of paid annual leave
Less than one year	0
1 year - 10 years	5
10 years - 20 years	10
More than 20 years	15

To clarify, it doesn’t matter how long they’ve worked for their current legal employer*;* it matters how long they’ve been working in general.

Unused annual leave days must be paid at 300% of the employees’ regular daily wage.

China is generous when it comes to national holidays. In 2026, employees can enjoy 33 days' worth of time off, not counting the regional holidays observed in certain municipalities.

If a Chinese employee works during a national holiday, they are entitled to overtime pay worth 300% of their regular wage.

Holiday	2026 Date	Duration
New Year’s Day	January 1–3	3 days
Spring Festival (Chinese New Year)	February 15–23	9 days
Tomb-Sweeping Day	April 4–6	3 days
Labor Day	May 1–5	5 days
Dragon Boat Festival	June 19–21	3 days
Mid-Autumn Festival	September 25–27	3 days
National Day	October 1–7	7 days

Chinese employees are entitled to paid sick leave, maternity leave and bereavement leave. They are also authorised to ask for paid leave after they get married.

In each case, the number of days given differs depending on the region. Sick leave also depends on the number of years served in the Chinese workforce and with the legal employer.

The amount of sick leave taken can sometimes affect an employee's annual leave entitlement.

Such nuances can be confusing for foreign business owners, especially those operating across various Chinese municipalities. Many are pleased to leave this aspect of work to an EOR with expert knowledge of Chinese employment law.

Employment cost calculator

Use our Employment cost calculator to estimate the cost of hiring employees in China.

What it’s really like hiring in China

Market condition	What an employer needs to know
Talent availability	The main hubs for most high-paying industries are in Tier 1 cities like Beijing, Shanghai or Shenzhen. These are the three cities with the most hiring activity in 2026.
Top-paying sectors	Tech, Finance, Scientific Research.
Skills shortages	Robotics, AI.
Key employer challenge	Hiring nationwide typically involves creating several business entities in different regions of China, which is expensive and time-consuming.

The hiring process can take as little as seven days if all necessary information is provided on time.

However, monthly cutoffs for registering the next month’s social contributions can delay employee start dates.

Under China’s Electronic Signature Law, there are certain circumstances where employee contracts will not be able to be signed digitally. In such cases, employers must seek wet signatures on all contracts.

Foreign business owners operating in China are often surprised by cultural differences surrounding workplace communication.

Employees who haven’t worked for an international company might not understand that they’re expected to answer every call or e-mail. That’s not always how it works in domestic Chinese business, so it’s best for employers to explicitly state their expectations for employee communication.

A lot of popular business communication tools (Gmail, WhatsApp, Slack) are banned in China. Government-approved VPNs are usually provided by employers to circumvent this problem, but this doesn’t mean that all Chinese workers will be familiar with these tools.

Super-apps like WeChat or Alibaba are the most frequently used communication tools. Most Chinese people prefer local-language contact even if they are confident English speakers.

Compliance risks that employers in China must know about

Complications when hiring employees outside of your municipality

The State Council of China wants to ‘tidy’ their social contribution system so that every employee contributes to the same jurisdiction as where their employer is registered.

Currently, it’s more flexible than that. There are still many cases where businesses hire someone who continues to contribute taxes elsewhere.

However, this will not always be permitted. It’s considered on a case-by-case basis, and there’s every chance that the rules will tighten in the future.

Social contributions are different for foreign workers in China

Foreign employees working in China may or may not have to contribute, depending on their location and their nationality.

As of September 2026, there are 11 nationalities that don’t have to make social contributions when working in China.

These are Canada, Denmark, Finland, Germany, Japan, Luxembourg, The Netherlands, Serbia, South Korea, Spain and Switzerland. France has also signed an agreement with China about this, but it is yet to come into force.6

Dismissing Chinese employees isn’t as easy as some foreign business owners expect

In the United States, it’s easy to fire an employee. You don’t have to find a just reason for the termination, nor give any notice. It’s called “at-will employment”.

However, this does not exist in China. All terminations in this country require a justified and documented reason. Companies that do not give one could be sued.

Rivermate advises clients on all employee terminations to prevent such a messy situation from occurring.

Benefits of hiring employees through an EOR in China

It will typically take between three and 12 months to set up a legal business entity in China. The cost ranges from $40,000 to $100,000, and that’s to cover only one city or province. To hire across China, it will cost much more.

If you’re only looking to hire a handful of Chinese employees, it wouldn’t make financial sense to launch your own entity.

Once you have 30 or more employees, you might consider doing that. Before then, it’s far more cost-effective and time-effective to work with an EOR.

At Rivermate, we help employers by:

• providing a local business entity in China.
• handling all administrative aspects of running a Chinese business, including payroll, taxes, benefits, terminations and quarterly/annual reporting.
• ensuring they remain compliant with all aspects of Chinese employment and labour laws.

This way, instead of worrying about social contributions, employee terminations and other complicated aspects of Chinese employment, you can focus all efforts on managing staff and growing your business.

Ready to hire in China?

Hiring in China involves more than discovering the best person for the job. From managing payroll, taxes and benefits to ensuring full compliance with local employment law, Rivermate handles all the administration so you can hire with confidence.

Talk to a China Hiring Expert

Sources:

1. https://www.china-briefing.com/news/minimum-wages-china/
2. https://www.stats.gov.cn/english/PressRelease/202605/t20260518_1963740.html
3. https://taxsummaries.pwc.com/peoples-republic-of-china/individual/taxes-on-personal-income
4. https://www.beijing.gov.cn/fuwu/lqfw/gggs/202604/t20260422_4601924.html
5. https://global.chinadaily.com.cn/a/202607/08/WS6a4e5a73a310986e2b464383.html
6. https://www.china-briefing.com/doing-business-guide/china/human-resources-and-payroll/social-insurance
7. http://big5.www.gov.cn/gate/big5/www.gov.cn/zhengce/2022-08/31/content_5711300.htm
8. https://teamedupchina.com/average-salaries-by-industry-in-china/
9. https://www.weforum.org/stories/jobs-and-the-future-of-work/the-future-of-jobs-in-china-the-rise-of-robotics-and-demographic-decline-are-opening-up-skills-gaps/