Guides - Human Resources & Payroll in China 2016

Human Resources and Payroll in China 2016-2017 (5th Edition) -

The payment amount will not be related to the amount of money paid by the individual or the

company into the fund. Individuals may claim unemployment benefits for a maximum period of

24 months.

Medical Insurance

Both employer and employee contribute to this fund. Proportions vary considerably between cities,

but generally the company will be expected to contribute between five and 12 percent of the

employee’s monthly salary, while the employee will contribute around two percent. Each individual

covered by medical insurance is issued a medical treatment card. Every month, a small amount of

money is added to the balance on this card. Cardholders can make purchases from pharmacies

using the balance.

A base charge will usually have to be paid up front to the hospital by the individual, and the rest of

the treatment expense should be received by the hospital from the insurance scheme. The precise

portion covered by insurance can depend on the type of sickness or injury.

Occupational Injury Insurance

The employer makes contributions to this fund. The premium is typically between 0.5 percent and

three percent of the monthly salary of the employee, depending on what kind of work is being

carried out by the employee.

If an employee is injured at work, the employer needs to collect evidence of the incident and send

it to the insurance company. Assuming everything is in order, the insurance company will then

reimburse the employer for the cost of the treatment.

Note: The employer needs to keep paying salary while the employee is rehabilitating.

Beware that your company may be liable for all costs of the treatment, if failing to pay insurance

premiums. These costs can be very high in case of serious

therefore recommend youmake

sure new hires are registered for occupational injury insurance with the Social Insurance Bureau,

and make timely contributions into the scheme.

Maternity Insurance

Usually only the employer pays maternity insurance.

During maternity leave, the pregnant employee’s maternity insurance is paid by the Social Security

Bureauwhere thewoman is registered. The amount that the bureauwill pay is the company’s average

monthly salary over the last 12 months.

Note: Some cities and regions, such as Shanghai, require the company to pay the difference between the average

salary for employees in the company and the actual wage of the female employee during the period of maternity, in

situations where the female employee’s salary is higher than the average.