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- Human Resources and Payroll in China 2016-2017 (5th Edition)
Housing Fund Registration
Registering with the Housing Fund Bureau typically requires the following steps:
• Opening an account with the Housing Fund Bureau. Companies usually need to bring the
company business license, the enterprise code certificate and an ID document of the company’s
legal representative.
• Applications are generally approved immediately. The company will receive a special account
number for payments to the housing fund.
• Companies need to sign a contract between the Housing Fund Bureau, the company and an
eligible bank to automate contribution payments. As with social insurance, the first payment
needs to be made by a check issued by the company.
Summary
Contributions from the employee and employer can vary considerably depending on the city in
which the amounts of contribution are being made. For a company that has employees based in a
number of cities around the country, thismeans that the overall cost to the company for an employee
earning RMB 10,000 in one city may be quite different from someone on the same salary based in
another city, although the cost in first-tier cities, such as Beijing and Shanghai, tend to be similar.
Companies based in large cities may find that if they employ an individual froma regional city in their
head office, the employee will request to have social security paid in the city where the company
is based rather than in their hometown. The reason is simple – the employee will be able to earn
more money via the pension and housing fund.
The opposite situation occurs as well. For example, if an employee is relocated from Shanghai
to Shenyang, they will likely request that social security continues to be paid in Shanghai. This is
partly because the amount of pension and housing fund receivable in Shanghai will be higher.
Additionally, the employee will probably consider the fact that it is unlikely the company will employ
them permanently in Shenyang; there is a strong likelihood of a return to Shanghai at some point.
The social security contribution can affect the total compensation and benefits (C&B) cost quite
considerably. Companies should take this variance into considerationwhen decidingwhere to locate
their operations. Even within a single city, there are different percentages and bases for contribution
of social welfare, examples of which can be found in the Appendix.
Note:
1. Late payments can result in a fine.
2. If an employee suffers an injury at work, and occupational injury insurance has not been paid, the company is
liable for all the costs of treatment.