According to Guangdong Taxation Bureau, all companies must buy social insurance for their staff including foreigners. It implies the government will go further on regulating this issue. Why are foreigners required to buy social insurance in China?
According to Guangdong Taxation Bureau, all companies must buy social insurance for their staff including foreigners. It implies the government will go further on regulating this issue. Why are foreigners required to buy social insurance in China?
The photo above is the message from Guangzhou Local Taxation Bureau. Photo:Hitouch
Guangdong Taxation Bureau starts to send the message to notice certain companies, those failed to fulfill the obligation on social insurance before. They are required to register social insurance, make a payment and fill certain registration for their staff.
Chinese Social Insurance Law
In China, every company is required to register social insurance at local government’s office. Also, it’s a compulsory obligation for companies to buy social insurance for their staff.
- According to Article 57 of Chinese social insurance law, startup companies are required to register social insurance at local government’s office in 30 days since the date they were set up. The business license is needed for the registration.
- According to Article 58 of Chinese social insurance law, companies should buy the social insurance for their staff in 30 days since the date they recruit that employee.
Companies May Get Loss If Fail The Obligation
- According to Article 23 of Chinese social insurance law, the government has the right to give a fine punishment (from 1000 to 10,000 RMB) to those company fail to fulfill the obligation of registering social insurance.
- According to Article 38 of Chinese social insurance law, employees have the right to sue to the company to court, the company should shoulder up all the cost, compensation and pay back the insurance for the employees.
As the running of a Company becomes more and more transparent to the Chinese government. Illegal behaviors hard to escape from the law.
Do I Have to Buy Social Insurance?
Yes
If you work in China, you are required to buy social insurance. After the reform of “five certificates in one”, systems between governments are connected.
In the long term, your social insurance record in Social Security Bureau will be submitted online shared with local Taxation Bureau, Foreign Experts Bureau, Immigration office and other government organizations.
It means in the future, the record of buying social insurance may be taken into the consideration of acquiring a work permit extension from Foreign Experts Bureau.
What Can I Do with Social Insurance？
Medical Insurance
Seeing a doctor in China is not cheap, but the medical insurance of the social pooling is affordable to fund you the majority of medical fees.
Maternity Insurance
Maternity insurance is NOT just to apply for reimbursement of giving a baby or have a body check before the childbirth.
You can get a big amount of maternity insurance after giving a baby. That amount of money depends on a systematical calculation, check the article below.
Other Benefits
With social insurance, you are also entitled to buy property in China, like houses, vehicles; send your children to public school; get a pension after retirement or acquire alms when losing a job…etc.
Five Categories under Social Insurance in China
How to Buy Social Insurance?
Only one document needed
For a foreigner, you can buy social insurance with a work permit.
How much I need to pay?
Social insurance is funded through social pooling, formed from payments made by the employer, and employee, to varying base pay.
See the picture below, the base pay is a standard given by the government to make the calculation.
The calculations below are only for a reference
If your monthly salary is 10,000RMB before taxation, you need to pay:
10,000*(8%+2%+0.2%)=1020RMB
Correspondently, your company needs to pay:
10,000*(14%+7%+0.64%+0.4%+0.85%)
=2289RMB
If you need HK Company Registration and HK Company Audit help, you may find the below information helpful.
