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China Salary and Wages

Salary and Wages

What is the minimum wage in China?

Minimum wages in China continue to rise. 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.


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.

In general, the minimum wage standards appear in two forms:

  • 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.

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The minimum wage is 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. Here, 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 based on the level of development and cost of living in that region. For example, the provincial capital and the province's most developed cities have a higher minimum wage class, whereas smaller cities and rural areas have a lower wage class.

Minimum wage in China guide

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

Minimum Wages in China **

Province/region

Class

City/urban area*

Monthly minimum wage (RMB)

Hourly minimum wage (RMB)

Effective date

Anhui**

A

Hefei

2.060

21

2023.3.1

B

Bengbu

Huaibei

Huainan

Xuancheng

1,930

20

C

Anqing

Fuyang

Huangshan

1,870

19

D

Certain county-level cities

1,780

18

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

1,820

19

2021.09.01

B

Hezuo

1,770

18.4

C

Linxia

1,720

17.9

D

Certain county-level cities

1,670

17.4

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

Cangzhou

Handan

2,200

22

2023.01.01

B

Xintai

Hengshui

Zhangjiakou

Chengde

2,000

20

C

Certain country-level cities 

1,800

18

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

2022.04.01

B

Xiangtan

Yueyang

Changde

1,740

17

C

Zhangjiajie

Yongzhou

Yiyang

1,550

15

Inner Mongolia

A

Hohhot

Erenhot

1,980

20.8

2021.12.01

B

Hulunbuir

Xilinhot

1,910

20.1

C

Bayanur

Ulanhot

1,850

19.5

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**

1,880

18

23.02.2023

Shaanxi

A

Xi’an

2,160

21

2023.05.01

B

Baoji

Hancheng

Hanzhong

Tongchuan

Weinan

Xianyang

Yan’an

Yulin

2,050

20

C

Ankang

Shangluo

1,950

19

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**

2,690

24

2023.07.01

Shanxi**

A

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

1,980

21.3

2023.01.01

B

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

1,880

20.2

C

Other county-level cities

1,780

19.1

Sichuan***

A

Chengdu

2,100

22

2022.4.01

B

Certain districts under the jurisdiction of Chengdu

1,970

21

C

Other districts and county-level cities

1,870

20

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

1,900

18

2022.10.01

B

Certain counties under the jurisdiction of Kunming

1,750

17

C

Other county-level cities

1,600

16

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

Notes

*Certain provinces set minimum wage standards at the county or district level. The cities listed in the table are examples and are not exhaustive.

**Highlighted areas denote jurisdictions that updated their minimum wage in 2023. The monthly minimum wage is for full-time employment while the hourly minimum wage is for part-time employment. 

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

Salary components

Base salary and bonus

The employee’s base salary needs to be stated in the labor contract. Employers can also include some one-off payments. For instance, many companies make a 13th month salary payment to their employees around Chinese New Year.

Companies should exercise caution when including payments other than the base salary in the labor contract, as they will be legally obligated to make the payment. Employers can instead choose to pay this amount as an annual bonus. In this case, the employer can explain to staff that the company generally pays this amount under normal business circumstances but is not obligated to do so if performance is below expectations.

Base salary is the fixed monthly amount that the company guarantees to pay the employee.

The company can also pay bonuses at various points throughout the year. In this case, please note that under Chinese IIT law, employees can use a special tax treatment for a one-off annual bonus to reduce their tax burden (more below).

Allowances

The Chinese Tax Bureau allows foreign staff (including those from Hong Kong, Macau and Taiwan) to deduct certain “allowances” before calculating the tax burden on their monthly salary, provided that:

  • In the employment contract (and sometimes also in a board resolution depending on the location of the company), there should be a clear reference to the amount being paid to the employee under the title of each specific allowance; and
  • Each month, the employee should produce evidence to show the company that this money was indeed spent on the services described in the contract; this is done using the ubiquitous “fapiao”, or official invoice, which should be received whenever an official monetary transaction is completed in China, valid till December 31, 2023.

The following allowances are deductible:

  • Meal allowance;
  • Housing allowance;
  • Laundry allowance;
  • Children’s education allowance; and
  • Home visit allowance.

How much of a foreign employee’s salary can be allocated to allowances is not clearly defined by the law, which stipulates that the allowances should be “reasonable.” In practice, many companies adopt a proportion of 30 percent of the total salary of the foreign employee and classify this portion as allowances. There is always the possibility that the tax office will challenge the company on this issue, so we recommend that the proportion of allowance should be set at or below this level.

Overtime defined by Chinese Law

For employees that work beyond eight hours a day, the employer should pay a minimum 150 percent of the employee’s basic salary for overtime worked. However, companies can structure overtime in several different ways. For example, a company can adopt either the Comprehensive Working Hour system or the Flexible Working Hour systemboth of which usually do not entitle employees to typical overtime payments – but government approval must be sought for implementation.

For an employee to work overtime, employers must consult with the employees and labor unions first. As stated above, in the event that employees do work overtime, they must be paid 1.5 times their usual wage. Employers are not required to pay overtime compensation to high-ranking managers. If employees work on a weekend, they are to be paid double their regular wage or get an additional day off during the week. Finally, if employees work on a statutory holiday, they must be paid three times their normal wage.

Overtime Payments & Regulations

Overtime is regulated by the People’s Republic of China Labor Law. 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.

The standard work hour system

Working hours in the standard work hour system are subject to the usual overtime rates:

  • For overtime work, 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;
  • 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%

The standard work hour system is suitable for most types of jobs in China.

The comprehensive work hour system

In this 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.

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%
*This higher rate applies even if the standard shift for the worker is scheduled on a public holiday. 

Before a company can implement this system, it must first submit its plan to the local labor bureau and get approval.

Once this system is in place, the employee’s work hours will be calculated over a “comprehensive calculation period” (e.g., weekly, monthly, quarterly, or yearly). In contrast to the standard work hour system, employees on this system may work for up to 36 hours more before overtime rates apply. This system is employer-friendly because local labor bureaus will define the upper limits for employee’s monthly work hours.

The non-fixed (flexible) work hour system

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

No overtime cost is associated with the non-fixed work hour system. 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 roles include:

  • Senior management;
  • Salespeople; and
  • Employees in the transport, warehousing, and railway sectors.

Non-fixed working hours cannot be applied to employees in low-level management or non-management roles unless they fall under one of the following work roles:

  • Off-site sales personnel;
  • Personnel permanently based out of town;
  • Long distance transportation personnel;
  • Non-production on-duty personnel; or
  • Others in special work positions that may arrange their own work and rest schedules.

How Do Rising Minimum Wages Effect Labor Costs in China?

Housing fund

The minimum contribution base of the housing fund in many cities is the same as the local minimum wage standards. The change of the minimum wage means the adjustment of the housing fund contribution base in the following months. The ceiling of the housing fund contribution base is usually three times the local average monthly salary of employees in the previous year and the floor of the housing fund contribution base is usually the same as the local minimum wage standard.

However, the adjustment of the housing fund contribution base is not always in sync with the change of the minimum wage standard. For example, to reduce labor costs and help struggling businesses survive in the wake of the COVID-19 pandemic, the Shanghai government decided that its minimum contribution base of the housing fund in 2021 will follow the 2020 minimum wage standard, rather than 2021 one.

Companies are suggested to pay attention to announcements from the local government.

Wages during the probation period

Article 20 of the Labor Contract Law stipulates that the wage amount of a worker during their probation period shall not be less than the lowest wage amount for the same job position in the employer’s organization or 80 percent of the wage amount agreed in the labor contract. The wage amount shall not be less than the minimum wage standard of the locality of the employer.

Therefore, the wages paid by the enterprise to the probationary employees who are on regular attendance should not be lower than the corresponding standard amount.

Wages during sick leave

Different cities have different standards of sick leave payments. But one universal rule is that the sick leave wage shall not be lower than 80 percent of the local minimum wage, according to the Opinions on Several Issues concerning the Implementation of the Labor Law of the People’s Republic of China (Lao Bu Fa [1995] No. 309).

Correspondingly, the minimum sick leave wage standard shall be adjusted with the increase of the local minimum wage standard.

Severance payment

Article 27 of the Implementation Regulations for the Labor Contract Law of the People’s Republic of China stipulates that the monthly salary used for calculating the severance payment to an employee shall be no less than the local minimum wage standard. If the average pay of the employee in the 12 months before the termination of the labor contract is less than the local minimum wage standard, the local minimum wage standard shall be used to calculate the severance  .

Wages during the suspension of work or production

Companies may decide to suspend their businesses or production in the wake of internal or external difficulties, such as during lockdowns caused by the pandemic. As per relevant provisions on wage payment during the period of suspension of production:

  • If the suspension period is within one wage payment cycle, salaries shall be paid according to the standards stipulated in the labor contract; and
  • If the suspension period goes beyond one wage payment cycle, the living allowance shall be paid by the enterprise, and the living allowance shall be implemented in accordance with the relevant local regulations.

Referring to the regulations of Zhejiang Province, Hubei Province, and Shaanxi Province, the employer is required pay living allowance at 70-80 percent of the local minimum wage.

Wages of dispatched employees

According to Article 58 of the Labor Contract Law, during the period in which a dispatched worker is not assigned any work duties, the labor dispatch agency shall pay the worker remuneration on a monthly basis pursuant to the local minimum wage standard.

Wages of injured workers

Article 35 and Article 36 of the Regulations on Work-Related Injury Insurance stipulates that where a worker who sustained a work injury is certified grade 1 to grade 6 disability, they shall enjoy corresponding benefits, such as a one-off disability subsidy and monthly disability allowance covered by the work-related injury insurance fund in accordance with the disability grading, among other factors.

Regarding the monthly disability allowance, the injured workers shall be paid at 60-90 percent of their average monthly wage in the 12 months before the injury. Where the amount of disability allowance calculated is less than the local minimum wage standard, the shortfall shall be covered by the work-related injury insurance fund.

Unemployment insurance benefits

The Guiding Opinions of the Ministry of Human Resources and Social Security and the Ministry of Finance on Adjusting the Criteria for Unemployment Insurance Benefits (Ren She Bu Fa [2017] No.71) stipulates that:

With the development of the society and economy, all provinces shall, on the premise of ensuring a sustainable fund, appropriately improve the level of unemployment security step by step, to improve the unemployment insurance benefit criteria to 90 percent of the local minimum wage standard.

In practice, the unemployment insurance benefits are usually paid at 70-80 percent of the local minimum wage standard.

 

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