China Social Security Insurance Rates 2023: What to Know

If you are run­ning a busi­ness or work­ing in Chi­na, you need to be aware of the social secu­ri­ty insur­ance sys­tem and the rates that apply to you and your employ­ees. Social secu­ri­ty insur­ance is a manda­to­ry and com­pre­hen­sive sys­tem that cov­ers basic pen­sion, med­ical, unem­ploy­ment, work-relat­ed injury, and mater­ni­ty ben­e­fits for Chi­nese cit­i­zens and for­eign work­ers. It is joint­ly fund­ed by employ­ers and employ­ees, as well as the gov­ern­ment in some cases.

In this arti­cle, we will explain the basics of the social secu­ri­ty insur­ance sys­tem in Chi­na, the rates and cal­cu­la­tion meth­ods for dif­fer­ent regions and indus­tries, the ben­e­fits and oblig­a­tions for employ­ers and employ­ees, and the expect­ed changes and trends in 2023.

What is social security insurance in China?

Social secu­ri­ty insur­ance in Chi­na is a sys­tem that pro­vides pro­tec­tion and assis­tance to indi­vid­u­als and fam­i­lies in case of old age, ill­ness, injury, unem­ploy­ment, child­birth, or oth­er con­tin­gen­cies. It is reg­u­lat­ed by the Social Insur­ance Law of 2011 and admin­is­tered by the Min­istry of Human Resources and Social Secu­ri­ty (MOHRSS) and its local branches.

The social secu­ri­ty insur­ance sys­tem con­sists of five types of insur­ance schemes:

• Basic pen­sion insur­ance: This scheme pro­vides month­ly pay­ments to retirees who have reached the statu­to­ry retire­ment age (60 for men, 55 for female white-col­lar work­ers, and 50 for female blue-col­lar work­ers) and have con­tributed for at least 15 years. The pen­sion amount is based on the indi­vid­u­al’s con­tri­bu­tion his­to­ry, the aver­age wage lev­el of the local area, and the num­ber of con­trib­u­tors in the pool.
• Basic med­ical insur­ance: This scheme cov­ers part of the med­ical expens­es incurred by insured indi­vid­u­als for out­pa­tient and inpa­tient ser­vices, as well as chron­ic dis­eases and seri­ous ill­ness­es. The reim­burse­ment rate varies depend­ing on the type and lev­el of med­ical insti­tu­tion, the type and amount of med­ical ser­vice, and the local pol­i­cy. The insured indi­vid­u­als need to pay a cer­tain amount of deductible and co-pay­ment before get­ting reimbursed.
• Unem­ploy­ment insur­ance: This scheme pro­vides month­ly pay­ments to insured indi­vid­u­als who have lost their jobs invol­un­tar­i­ly and are active­ly seek­ing employ­ment. The pay­ment amount is based on the local min­i­mum wage lev­el and the dura­tion of unem­ploy­ment. The pay­ment peri­od ranges from 12 to 24 months depend­ing on the con­tri­bu­tion period.
• Work-relat­ed injury insur­ance: This scheme cov­ers part or all of the med­ical expens­es, dis­abil­i­ty ben­e­fits, funer­al expens­es, and depen­dent allowances for insured indi­vid­u­als who have suf­fered from work-relat­ed injuries or occu­pa­tion­al dis­eases. The pay­ment amount and peri­od depend on the degree of injury or disability.
• Mater­ni­ty insur­ance: This scheme cov­ers part or all of the med­ical expens­es, birth allowances, and nurs­ing sub­si­dies for insured female employ­ees who have giv­en birth or adopt­ed a child. The pay­ment amount is based on the local aver­age wage lev­el and the num­ber of chil­dren. The pay­ment peri­od is usu­al­ly 98 days for nat­ur­al birth and 128 days for cesare­an section.

What are the social security insurance rates in China?

The social secu­ri­ty insur­ance rates in Chi­na are deter­mined by the cen­tral gov­ern­ment with­in a cer­tain range, but they may vary by region, indus­try, and type of employ­ment. Gen­er­al­ly speak­ing, both employ­ers and employ­ees need to con­tribute a cer­tain per­cent­age of the employ­ee’s month­ly salary to each type of insur­ance scheme. The salary base for cal­cu­la­tion is capped at three times the local aver­age wage level.

The fol­low­ing table shows the aver­age social secu­ri­ty insur­ance rates for employ­ers and employ­ees across Chi­na in 2022:

Type of Insur­ance	Aver­age Employ­er Rate (%)	Aver­age Employ­ee Rate (%)
Basic pen­sion insurance	16	8
Basic med­ical insurance	6.5	2
Unem­ploy­ment insurance	0.8	0.2
Work-relat­ed injury insurance	0.5	0
Mater­ni­ty insurance	1	0
Total	24.8	10.2

The above table is only for ref­er­ence, as the actu­al rates may dif­fer by region, indus­try, and type of employ­ment. For exam­ple, the employ­er rate for basic pen­sion insur­ance ranges from 14% to 20%, and the employ­ee rate ranges from 6% to 12%. The employ­er rate for basic med­ical insur­ance ranges from 4% to 10%, and the employ­ee rate ranges from 0.5% to 3%. The employ­er rate for unem­ploy­ment insur­ance ranges from 0.5% to 2%, and the employ­ee rate ranges from 0.2% to 1%. The employ­er rate for work-relat­ed injury insur­ance ranges from 0.2% to 2%, and the employ­ee rate is usu­al­ly zero. The employ­er rate for mater­ni­ty insur­ance ranges from 0.5% to 1.5%, and the employ­ee rate is usu­al­ly zero.

More­over, some regions and indus­tries may have dif­fer­ent cal­cu­la­tion meth­ods or addi­tion­al require­ments for social secu­ri­ty insur­ance. For exam­ple, some regions may use a fixed salary base or a float­ing salary base instead of the actu­al salary for cal­cu­la­tion. Some regions may require employ­ers to pay social secu­ri­ty insur­ance for part-time or tem­po­rary work­ers, or for for­eign work­ers who have obtained a work per­mit and res­i­dence per­mit. Some indus­tries may have high­er or low­er rates for work-relat­ed injury insur­ance depend­ing on the risk level.

There­fore, it is advis­able to con­sult the local author­i­ties or pro­fes­sion­al ser­vice providers for the lat­est and accu­rate infor­ma­tion on the social secu­ri­ty insur­ance rates in your spe­cif­ic region and industry.

Shanghai Social Security Base in 2023

What are the benefits and obligations of social security insurance in China?

Social secu­ri­ty insur­ance in Chi­na pro­vides ben­e­fits and oblig­a­tions for both employ­ers and employ­ees. The ben­e­fits include:

• For employ­ers: By pay­ing social secu­ri­ty insur­ance for their employ­ees, employ­ers can enhance their rep­u­ta­tion, attract and retain tal­ent, reduce labor dis­putes, and com­ply with the law.
• For employ­ees: By par­tic­i­pat­ing in social secu­ri­ty insur­ance, employ­ees can enjoy pro­tec­tion and assis­tance in case of old age, ill­ness, injury, unem­ploy­ment, child­birth, or oth­er con­tin­gen­cies. They can also enjoy pref­er­en­tial poli­cies such as tax deduc­tions, hous­ing fund con­tri­bu­tions, and visa applications.

The oblig­a­tions include:

• For employ­ers: Employ­ers are oblig­ed to reg­is­ter their employ­ees with the local social secu­ri­ty author­i­ties, pay social secu­ri­ty insur­ance con­tri­bu­tions on time and in full, keep records of pay­ments and ben­e­fits, and report any changes or inci­dents that may affect the social secu­ri­ty insur­ance sta­tus of their employees.
• For employ­ees: Employ­ees are oblig­ed to pro­vide accu­rate and com­plete infor­ma­tion to their employ­ers and the social secu­ri­ty author­i­ties, pay social secu­ri­ty insur­ance con­tri­bu­tions on time and in full, keep records of pay­ments and ben­e­fits, and report any changes or inci­dents that may affect their social secu­ri­ty insur­ance status.

What are the expected changes and trends of social security insurance in China in 2023?

The social secu­ri­ty insur­ance sys­tem in Chi­na is con­stant­ly evolv­ing and improv­ing to bet­ter sup­port the devel­op­ment of the coun­try and the well-being of its peo­ple. Some of the expect­ed changes and trends of social secu­ri­ty insur­ance in Chi­na in 2023 include:

• Nation­al inte­gra­tion: Chi­na is work­ing on inte­grat­ing its frag­ment­ed social secu­ri­ty sys­tem into a uni­fied nation­al sys­tem that cov­ers all regions and indus­tries. This will facil­i­tate the trans­fer and con­tin­u­a­tion of social secu­ri­ty rights and ben­e­fits across dif­fer­ent regions and indus­tries, as well as reduce admin­is­tra­tive costs and improve efficiency.
• Dig­i­tal trans­for­ma­tion: Chi­na is accel­er­at­ing the dig­i­tal trans­for­ma­tion of its social secu­ri­ty sys­tem by apply­ing infor­ma­tion tech­nol­o­gy, big data, arti­fi­cial intel­li­gence, blockchain, cloud com­put­ing, and oth­er advanced tech­nolo­gies. This will enhance the con­ve­nience, trans­paren­cy, accu­ra­cy, and secu­ri­ty of social secu­ri­ty ser­vices and management.
• Sus­tain­abil­i­ty enhance­ment: Chi­na is enhanc­ing the sus­tain­abil­i­ty of its social secu­ri­ty sys­tem by adjust­ing its poli­cies, rates, and mech­a­nisms accord­ing to the chang­ing eco­nom­ic and demo­graph­ic con­di­tions. This will ensure the bal­ance and ade­qua­cy of social secu­ri­ty funds and ben­e­fits in the long term.
• Inclu­sive­ness improve­ment: Chi­na is improv­ing the inclu­sive­ness of its social secu­ri­ty sys­tem by expand­ing its cov­er­age, scope, and stan­dards to include more groups of peo­ple, espe­cial­ly those who are vul­ner­a­ble or dis­ad­van­taged. This will pro­mote social equi­ty, jus­tice, and harmony.

Frequently Asked Questions

Here are some com­mon ques­tions and answers relat­ed to social secu­ri­ty insur­ance in China:

Sources:

1. Chi­na’s Social Insur­ance sys­tem con­tin­ues to improve | State Coun­cil of the Peo­ple’s Repub­lic of China
2. Chi­na has built up the World’s Largest Social Secu­ri­ty Sys­tem | State Coun­cil of the Peo­ple’s Repub­lic of China
3. How Chi­na Secures Pen­sion Pay­ment Through Reform, State Asset Sup­ple­ment | State Coun­cil of the Peo­ple’s Repub­lic of China