Payroll In China
What tax considerations are there?
China uses a progressive tax system for individual income tax (IIT) from 3% to 45%. Residents of China are subject to income tax on worldwide income by category. These nine categories are: employment income (i.e. wages and salaries), remuneration for labour services, author’s remuneration, royalties, business income, interest, dividends, and profit distribution, rental income, income from transfer of property and incidental income. Non-residents are taxed separately by category on a monthly/transaction basis.
There is also corporate income tax (CIT) to consider, which is deducted at a standard rate of 25%. This can be reduced to 15% if a business is within an industry encouraged by the Chinese government.
HR in China
What are the regular working hours in China?
The Chinese government enforces business hours of 44 hours a week under the Labor Law of People’s Republic of China, for no more than 8 hours a day.
Regular working hours are Monday to Friday, usually from 08:00 – 17:00, 08:30 – 17:30 or 9:00 – 18:00. Saturday and Sunday are usually days off.
Termination
Employee termination in China can be a very lengthy and complex process, no matter how serious the reason for letting an employee go. This is because Chinese employment termination law prioritizes job security above all else. These termination law guidelines must be adhered to by employers.
There is also regional labor administration to consider, as there may be additional guidelines and rules which vary considerably between jurisdictions.
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