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Introduction to minimum wages in China

A minimum wage is the lowest remuneration that employers can legally pay their employees. Generally, minimum wage doesn’t include overtime pay, night shift allowance, summer high temperature allowance, the special working environment allowance, and subsidies for meals, transportation, and housing.

What are the minimum wages in China?

According to China’s Provisions on Minimum Wage, the legal minimum wage refers to the minimum labor remunerations that shall be paid by the employers to the employees under the precondition that the employee has provided normal labor within the promissory working hours or within the working hours that is prescribed in the labor contracts.

The minimum wage standards are determined by provincial governments by taking into consideration factors, such as the minimum living costs of local employees and their dependents, the urban residents’ consumption price index, the social insurance premiums and the housing funds paid by the employees themselves, the average salary of the employees, the level of local economic development, the local employment status, etc.

In general, the minimum wage standards appear in two forms, namely the monthly minimum wage standard and the hourly minimum wage standard. The monthly minimum wage standard applies to full-time employees while the hourly minimum wage standard applies to non-fulltime employees, such as part-time and temporary employees.

To be noted, the minimum wage is just the basic wage that employers must pay their employees, which excludes overtime pay, night shift allowance, summer high temperature allowance, the special working environment allowance, and subsidies for meals, transportation, and housing.

Nevertheless, China’s minimum wage standards do include the social insurance premiums and housing fund contributions paid by employees in most regions. In fact, it is possible that the employee’s take-home pay is lower than the corresponding minimum wage standard in these regions. Only a few regions, such as Shanghai, clearly stipulate in their local rules that their local minimum wage standards exclude social insurance premiums and housing fund contributions.

Local governments in China are generally required to update their minimum wages every few years but have the flexibility to adjust wages according to local conditions.

Most provinces set different classes of minimum wage levels for different areas depending on the given region’s level of development and cost of living. For example, a higher minimum wage class is established for the provincial capital and the most developed cities in the province, whereas smaller cities and rural areas fall under a lower wage class.

Minimum wage in China 2022

Minimum wages in China continue to rise.

Starting in 2022, Shenzhen and Henan raised their minimum wage standards from January 1, while Chongqing and Fujian will raise their minimum wage standards from April 1. Meanwhile, Hebei province has announced that it plans to adjust its minimum wage standards in 2022 after completing an ongoing process of evaluation and calculation.

Since 2021, more than 20 provinces in China have raised their minimum wage standard, including Anhui, Beijing, Guangdong, Hainan, Heilongjiang, Hubei, Jiangsu, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Tianjin, Tibet, Xinjiang, and Zhejiang.

Currently, Shanghai has the highest monthly minimum wage among 31 provinces (RMB 2,590/US$400 per month) and Beijing has the highest hourly minimum wage (RMB 25.3/US$3.9 per hour). Eight regions – Shanghai, Guangdong, Beijing, Tianjin, Jiangsu, Shandong, Hubei, and Zhejiang – have surpassed the RMB 2,000 (US$308) mark in their monthly minimum wage standards.

Yunnan’s minimum wage level (RMB 1,350/US$213 per month) is slightly higher than that in Anhui (RMB 1,340/US$212 per month).

A complete guide to China’s minimum wages can be found below.

Minimum Wages in China 2021

Province/region

Class

City/urban area*

Monthly minimum wage (RMB)

Hourly minimum wage (RMB)

Effective date

Anhui

A

Hefei

1,650

20

2021.12.03

B

Bengbu

Huaibei

Huainan

Xuancheng

1,500

18

C

Anqing

Fuyang

Huangshan

1,430

17

D

Certain county-level cities

1,340

16

Beijing

2,320

25.3

2021.08.01

Chongqing

A

Certain suburban districts and counties

2,100

21

2022.04.01

B

Certain suburban districts and counties

2,000

20

Fujian

A

Xiamen

2,030

21

2022.04.01

B

Fuzhou

Quanzhou

Pingtan FTZ

1,960

20.5

C

Zhangzhou

Ningde

1,810

19

D

Sanming

Nanping

1,660

17.5

Gansu

A

Lanzhou

Jiayuguan

Yumen

Dunhuang

1,620

17

2017.06.01

B

Hezuo

1,570

16.5

C

Linxia

1,520

15.9

D

Certain county-level cities

1,470

15.4

Guangdong

A

Guangzhou

2,300

22.2

2021.12.01 (Shenzhen’s minimum wage standards was effective since January 1, 2022)

Shenzhen

2,360

B

Zhuhai

Foshan

Dongguan

Zhongshan

1,900

18.1

C

Shantou

Huizhou

Jiangmen

Zhanjiang

Zhaoqing

1,720

17

D

Other cities

1,620

16.1

Guangxi

A

Nanning

Liuzhou

Guilin

Wuzhou

Beihai

Fangchenggang

Qinzhou

1,810

17.5

2020.03.01

B

Yulin

Baise

Guigang

1,580

15.3

C

Certain county-level cities

1,430

14

Guizhou

A

Guiyang

Qingzhen

Chishui

1,790

18.6

2019.12.01

B

Kaiyang

1,670

17.5

C

Xifeng

Xiuwen

1,570

16.5

Hainan

A

Haikou

Sanya

Yangpu Economic Development Zone

1,830

16.3

2021.12.01

B

Qionghai

Danzhou

Sansha

1,730

15.4

C

Wenchang

Other cities

1,680

14.9

Hebei

A

Shijiazhuang

Baoding

Langfang

Tangshan

Qinghuangdao

1,900

19

2019.11.01

B

Handan

Xintai

Hengshui

Zhangjiakou

Chengde

1,790

18

C

Shenzhou

Xinle

Yizhou

1,680

17

D

Certain county-level cities

1,580

16

Heilongjiang

A

Harbin (except certain districts)

Daqin

1,860

18

2021.04.01

B

Qiqihar

Mudanjiang

Jiamusi

Suihua

1,610

14

C

Heihe

Yinchun

Daxinganling

1,450

13

Henan

A

Zhengzhou

Luoyang

Anyang

2,000

19.6

2022.01.01

B

Kaifeng

Puyang

Nanyang

1,800

17.6

C

Weihui

1,600

15.6

Hubei

A

Wuhan

2,010

19.5

2021.09.01

B

Huangshi

Yichang

Huanggang

Tianmen

1,800

18

C

Certain county-level cities

1,650

16.5

D

Shengnong

Other county-level cities

1,520

15

Hunan**

A

Changsha

Zhuzhou

1,930

19

2019.09.06

B

Xiangtan

Yueyang

Changde

1,740

17

C

Zhangjiajie

Yongzhou

Yiyang

1,550

15

D

Loudi

1,220

12.5

Inner Mongolia

A

Hohhot

Erenhot

1,760

18.6

2017.08.01

B

Hulunbuir

Xilinhot

1,660

17.6

C

Bayanur

Ulanhot

1,560

16.5

D

Arxan

1,460

15.5

Jiangsu       

A

Nanjing

Suzhou

Zhenjiang

Changzhou

Wuxi

2,280

22

2021.08.01

B

Yangzhou

Nantong

Lianyungang

2,070

20

C

Suqian

1,840

18

Jiangxi

A

Nanchang

1,850

18.5

2021.01.21

B

Jiujiang

Shangrao

Pingxiang

Ji’an

1,730

17.3

C

Yichun

Fuzhou

1,610

16.1

Jilin

A

Changchun

1,880

19

2021.12.01

B

Jilin

Songyuan

Yanji

Huichun

1,760

18

C

Siping

Liaoyuan

Tonghua

Baishan

Qianguo county

Fusong county

1,640

17

D

Baicheng and the rest counties (cities)

1,540

16

Liaoning

A

Dalian

Shenyang

1,910

19.2

2021.11.01

B

Anshan

Dandong

Fushun

Yingkou

1,710

17.2

C

Chaoyang

Fuxin

1,580

15.9

D

Huludao

Tieling

1,420

14.3

Ningxia

A

Yinchuan

Shizuishan

1,950

18

2021.09.01

B

Lingwu

Wuzhong

Zhongwei

1,840

17

C

Guyuan

1,750

16

Qinghai

1,700

15.2

2020.01.01

Shaanxi

A

Xi’an

1,950

19

2021.05.01

B

Baoji

Hancheng

Hanzhong

Tongchuan

Weinan

Xianyang

Yan’an

Yulin

1,850

18

C

Ankang

Shangluo

1,750

17

Shandong

A

Dongying

Jinan

Qingdao

Weifang

Weihai

Yantai

Zibo

2,100

21

2021.10.01

B

Binzhou

Jinning

Laiwu

Linyi

Rizhao

Tai’an

Zaozhuang

1,900

19

C

Dezhou

Heze

Liaocheng

1,700

17

Shanghai

2,590

23

2021.07.01

Shanxi

A

Most districts under Taiyuan; some districts and county-level cities under Datong, Changzhi, Jincheng, Shuozhou, Yizhou, Jinzhong, Linfen, Lvliang, and Yuncheng

1,880

19.8

2021.10.01

B

Most county-level cities under Datong, Changzhi, Shuozhou, Yizhou, Jinzhong, Linfen, and Yuncheng

1,760

18.5

C

Other county-level cities

1,630

17.2

Sichuan

A

Chengdu

1,780

18.7

2018.07.01

B

Certain districts under the jurisdiction of Chengdu

1,650

17.4

C

Other districts and county-level cities

1,550

16.3

Tianjin

2,180

22.6

2021.07.01

Tibet

1,850

18

2021.05.25

Xinjiang

A

Karamay

Taxkorgan Tajik Autonomous Region

1,900

19

2021.04.01

B

Changji

Shixenze

Urumqi

Wujyachu

1,700

17

C

Aksu

Arai

Kashgar

Korla

Kumul

Tumxuk

Turpan

Wusu

1,620

16.2

D

Atlay

Atush

Bortala

Dacheng

Gulja

Kuytun

1,540

15.4

Yunnan

A

Kunming

1,670

15

2018.05.01

B

Certain counties under the jurisdiction of Kunming

1,500

14

C

Other county-level cities

1,350

13

Zhejiang**

A

Hangzhou

Ningbo

Wenzhou

2,280

22

2021.08.01

B

Huzhou

Jinhua

Shaoxing

Taizhou

2,070

20

C

Lishui

Zhoushan

1,840

18

*Certain provinces set minimum wage standards at the county or district level. The cities listed in the table are examples and are not exhaustive.
Note: Highlighted areas denote jurisdictions that updated their 
minimum wage in 2021. The monthly minimum wage is for full-time employment while the hourly minimum wage is for part-time employment. 

**Hunan, Zhejiang provinces allow each city to decide which minimum wage level to apply. The cities given as examples are therefore subject to change.

Impact of minimum wage increase on China’s labor costs

Minimum wages only tell part of the story of labor costs in China.

As China’s economy moves up the value chain and makes the transition to innovation and services, most workers employed by foreign-invested enterprises earn above the minimum wage.

For example, workers in Shanghai made an average of RMB 10,338 (US$1,632) per month through 2020 – nearly four times the local minimum wage.

Moreover, employer social insurance and housing fund obligations add around an additional 37 percent to employers’ labor cost on top of the employees’ gross salary.

For foreign investors, rising wages are an unavoidable feature of doing business in China. Yet, when other factors like productivity, infrastructure, transportation costs, and access to a massive domestic market are considered – China may still emerge as the more cost-efficient option compared to countries with lower statutory labor costs.

When comparing locations for foreign investment into China, minimum wages are a helpful barometer to gauge labor costs across different regions.

From there, identifying industry-specific wage levels, availability of talent, and access to regional incentives offer a more nuanced view of ultimate labor costs within a given region.

How are overtime wages calculated in China?

In China, overtime is paid differently depending on the work hour system adopted by the employer, by either standard work hours, comprehensive work hours or non-fixed work hours. The standard work hour system requires that an employee’s normal working day should not exceed eight hours, that the normal working week not exceed 40 hours, and that each employee should be guaranteed at least one rest day per week. The majority of white-collar jobs in China now operate according to this model.Daily overtime cannot be over three hours and monthly overtime cannot be over 36 hours. Workers shall be granted at least one rest day per week.

Under standard work hour system, overtime payments are subject to the below overtime rates:

  • For overtime work in normal days, not less than 150 percent of the normal wage shall be paid;
  • For work on a rest day, and where such rest days cannot be postponed and taken at another time, not less than 200 percent of the normal wage shall be paid; and
  • For work on an official public holiday, not less than 300 percent of the normal wage shall be paid.

Overtime Payment under the Standard Work Hour System

Time of work

Percentage of hourly salary*

Extra hours worked on weekdays

150%

Hours worked on weekends

200%

Hours worked on public holidays

300%

*Basic hourly salary is calculated by taking the monthly pay of the employee and dividing it by 174 (average number of working hours in the month).

The comprehensive work hour system accumulates work hours over a specified cycle (weekly, monthly, quarterly, or yearly). The average number of hours is then determined based on this accumulation period. Broadly speaking, this system is most suited to work roles with irregular shifts, including seasonal or project-based work.

Although the distribution of hours worked during this period may be quite irregular, the average number of work hours per day and per week should roughly correspond to the levels set out in the standard work hour system.

Under comprehensive work hour system, overtime is applicable for hours worked above the standard set per cycle. Such rates match those of the standard work hour system for extra hours worked and work on public holidays. However, no rest day is outlined under this system. 

Lastly, the non-fixed work hour system is geared towards positions like senior management, salespeople, and employees in the transport, warehousing and railway sectors who generally do not receive overtime payments, as it is considered impractical to measure their time spent on working.

Note that comprehensive and non-fixed work hour systems require special approval to implement.

Overtime Payment under the Comprehensive Work Hour System

Time of work

Percentage of hourly salary

Extra hours worked outside of normal shift

150%

Extra hours worked on public holidays*

300%

The non-fixed work hour system accommodates employees whose work hours are impractical to measure. Employees on such a work hour system will generally be paid as a salaried employee. This salary is a set amount paid per period, often monthly in China.

Generally, no overtime cost is associated with the non-fixed work hour system except for hours worked on public holidays. The latter is subject to local variances. For example, Beijing doesn’t take hours worked on public holidays by non-fixed work hour employees as overtime, while such hours are regarded as overtime in Shanghai and 300 percent of the normal wage shall be paid.

Employers are required to observe appropriate work and rest schedules, though it is ultimately up to the employer’s discretion.

This type of work hour system and payment method makes sense when outcomes trump specific hours spent at work, such as lawyers and senior management. 

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