In 2025, employee benefits in China remain a cornerstone of compliance, workforce retention, and employer branding. China’s labour market is highly regulated by the Labour Law of the People’s Republic of China, Labour Contract Law, and mandatory contributions to the country’s “five social insurances and one housing fund” (五险一金). For global employers, offering compliant benefits is not just a retention strategy — it is a legal requirement.
China’s social security system, combined with provincial and municipal regulations, shapes statutory entitlements, while employers often add voluntary perks to stay competitive. However, navigating compliance is complex, especially for foreign companies without a local entity. That’s where Employer of Record (EOR) services in China simplify payroll processing, benefit delivery, and legal compliance.
This guide covers everything global employers need to know about employee benefits in China in 2025, including statutory entitlements, voluntary perks, compliance challenges, and how an EOR can streamline hiring.
Table of Contents
- What Are Employee Benefits in China?
- Types of Employee Benefits in China
- Emerging Benefit Trends for 2025
- Steps to Launch Employee Benefits in China
- Estimated Timeline to Implement Benefits
- Legal Framework Governing Benefits in China
- Key Compliance Challenges for Employers in China
- How Asanify Supports Employers in China
- FAQs on Employee Benefits in China
What Are Employee Benefits in China?
Employee benefits in China include all non-salary compensation provided to employees, ranging from mandatory social security contributions to additional allowances and perks. Unlike base wages, these benefits are tied closely to local labour laws and vary by city.
For employers, benefits ensure compliance with labour laws in China, while for employees, they provide essential financial security, healthcare, and work-life balance.
Payroll processing plays a key role in benefits administration, as companies must calculate and remit contributions correctly to avoid penalties.
Examples of employee benefits in China include:
- Social security contributions (pension, healthcare, maternity, unemployment, and work injury)
- Housing fund contributions
- Paid annual leave and public holidays
Types of Employee Benefits in China
China has one of the most structured employee benefits systems in Asia, combining legally mandated entitlements with additional perks that employers offer to remain competitive. Below we break down the key categories.
Statutory Entitlements
By law, Chinese employers must provide a wide range of benefits that ensure employee financial security, healthcare, and work-life balance. These include:
Five Social Insurances
Employers must contribute to the “five social insurances”:
- Pension insurance – Supports retirement income.
- Medical insurance – Covers basic healthcare costs.
- Unemployment insurance – Provides income support for job loss.
- Work injury insurance – Covers workplace accidents.
- Maternity insurance – Funds maternity benefits and related medical expenses.
Housing Fund (公积金)
Both employers and employees contribute to the Housing Provident Fund, which employees can use for buying, renting, or renovating housing. Contribution rates vary by city (generally 5–12% of salary).
Paid Annual Leave and Public Holidays
Employees receive 5–15 days of annual leave depending on years of service, plus 11 national public holidays (with local governments sometimes adding more).
Sick Leave
Employees on sick leave are entitled to 60–100% of their base salary, depending on tenure and local rules, funded jointly by the employer and social insurance.
Maternity and Paternity Leave
- Maternity leave: At least 98 days, often extended provincially (up to 158+ days).
- Paternity leave: Varies by region, usually between 7–30 days.
Compliance Reminder: Employers must register with local social security and housing fund bureaus, make timely contributions, and keep accurate payroll filings to avoid penalties.
Suggested Read: Employer of Record China: A Comprehensive Guide 2025
Common Voluntary Perks
Beyond the statutory framework, many Chinese employers provide voluntary benefits to remain competitive, especially in industries like IT, finance, and manufacturing.
Some of the most common voluntary perks include:
- Supplementary commercial health insurance to extend coverage beyond the public system.
- Meal and transport allowances.
- Housing subsidies in addition to the housing fund.
- Annual performance bonuses (often a “13th month” salary).
- Wellness programs such as gym memberships and mental health initiatives.
- Training and upskilling budgets, including foreign language courses.
- Equity incentives (ESOPs, RSUs) in startups and multinational firms.
These voluntary benefits strengthen employer branding and help attract top talent in China’s competitive labour market.
Global Contractor Management and Benefits
Independent contractors in China are not entitled to statutory employee benefits like social insurance or housing fund contributions. They must manage their own taxes and insurance independently.
For global employers, this creates two main challenges:
- Misclassification Risks – Chinese labour authorities strictly monitor employment relationships. Misclassifying contractors as employees can result in fines, retroactive social security payments, and legal disputes.
- Limited Benefits Access – Contractors cannot easily access company-provided perks without being engaged as employees.
Solution: Partnering with an Employer of Record (EOR) in China enables companies to compliantly hire contractors as employees where necessary. This ensures workers receive fair statutory and voluntary benefits, while protecting employers from compliance risks.
Emerging Benefit Trends for 2025
China’s benefits landscape is rapidly evolving, with employers adapting to global HR practices and local workforce expectations. Key trends include:
- Mental health and wellbeing programs – Counselling services, stress-prevention workshops, and wellbeing subsidies are becoming more common.
- Remote work and digital allowances – Companies now provide stipends for internet, utilities, and ergonomic equipment to support hybrid workers.
- Expanded parental benefits – Many provinces have extended maternity and paternity leave beyond national minimums to align with family policy goals.
- Financial wellbeing programs – Employers are adding savings schemes, supplementary pensions, and financial literacy workshops.
- Flexible cafeteria-style benefits – Customised benefit packages allow employees to choose between perks such as extra leave, enhanced insurance, or training funds.
- AI-driven HR and benefits platforms – Digital tools are reshaping delivery by offering personalised benefits and optimising costs.
For global employers, rolling out these perks in China requires strict compliance. Partnering with an Employer of Record (EOR) in China ensures new benefits are implemented quickly and legally.
Steps to Launch Employee Benefits in China
Rolling out employee benefits in China requires a balance of strategic planning and strict compliance with national labour laws, social insurance regulations, and regional variations. Employers must first define a clear benefits strategy, ensure accurate payroll processing and contribution filings, and partner with local experts to avoid compliance pitfalls.
Define Your Benefits Strategy
- Align with company goals and workforce expectations.
- Benchmark against sector-specific practices in China.
- Balance statutory obligations with voluntary perks.
Understand Compliance Rules
- Register with local social security and housing fund authorities.
- Ensure accurate payroll processing, including contributions and tax withholdings.
- Avoid penalties for late filings or under-contributions.
Partner with Local Experts
- Work with an EOR in China or HR outsourcing firm.
- Guarantee compliant onboarding, payroll, and benefit delivery.
- Minimise risks of misclassification and payroll errors.
Estimated Timeline to Implement Benefits
| Implementation Step | In-House (Local Entity) | With EOR in China |
| Entity setup & registrations | 3–6 months | Not required |
| Payroll & social security setup | 4–8 weeks | Immediate |
| Insurance & benefit enrolments | 4–8 weeks | 1–2 weeks |
| Full benefits rollout | 3–6 months | 2–3 weeks |
Partnering with an EOR in China drastically reduces implementation time while ensuring compliance.
Legal Framework Governing Benefits in China
China has a highly regulated employment system where benefits are defined by national labour laws, reinforced through regional regulations, and implemented via mandatory social security and housing fund contributions. For global employers, understanding this framework is essential to remain compliant.
Core Labour Framework and Institutions
Several key laws and authorities establish the rights and obligations of employers and employees in China:
- Labour Law of the People’s Republic of China – Sets standards for working hours, wages, leave, and basic employee rights.
- Labour Contract Law – Governs employment contracts, termination, and mandatory benefit entitlements.
- Social Insurance Law – Regulates contributions to the five social insurances (pension, medical, unemployment, maternity, and work injury).
- Housing Fund Regulations – Define rules for mandatory employer and employee contributions to the Housing Provident Fund.
- Local Social Security Bureaus & Housing Fund Bureaus – Enforce registration, contributions, and compliance checks.
Together, these laws create the foundation for statutory benefits such as annual leave, social insurance, maternity and paternity protections, and housing support.
Regional Regulations
Unlike many countries, China applies a region-specific benefits system, where contribution rates, leave entitlements, and allowances vary by city or province. For example:
- Shanghai and Shenzhen often require higher housing fund contributions than smaller cities.
- Beijing has extended parental leave beyond the national standard.
- Sick leave payments and calculation methods differ between provinces.
This decentralised system means employers must carefully monitor and apply local rules in addition to national laws.
Key Compliance Challenges for Employers in China
Employers face several compliance risks when administering benefits in China:
- Misclassification of contractors or dispatch workers
- Errors in calculating social insurance and housing fund contributions
- Regional variations in benefits creating inconsistent compliance
- Late or inaccurate filings with social security bureaus
- Failing to provide mandatory maternity/paternity leave
- Non-compliance with overtime and paid leave requirements
An EOR in China helps reduce these risks by managing payroll, benefits, and compliance on behalf of employers.
Suggested Read: Understanding Labour Laws in China: Contracts, Wages, and Termination Rules
How Asanify Supports Employers in China
Managing employee benefits and compliance in China can be complex due to regional variations, mandatory social contributions, and strict labour laws. Asanify makes it simple. Through its Employer of Record (EOR) providers in China, global companies can expand quickly while ensuring full compliance with national and local regulations.
With Asanify, employers are able to:
- Onboard employees compliantly under Chinese labour and contract laws.
- Streamline payroll processing and handle mandatory filings with local social security and housing fund bureaus.
- Guarantee statutory benefits including five social insurances and one housing fund (五险一金).
- Offer voluntary perks such as supplementary health insurance, housing stipends, and performance bonuses.
- Administer modern benefits like hybrid work allowances, training budgets, and customised cafeteria-style plans.
- Provide bilingual payslips in Chinese and English for international teams.
- Maintain compliance with both national laws and region-specific regulations.
- Manage contractors compliantly by converting them into employees when needed through Global Contractor Management solutions.
By partnering with Asanify, global employers reduce compliance risks, accelerate hiring, and deliver a seamless benefits experience for their teams in China.
FAQs
Five social insurances (pension, medical, maternity, unemployment, work injury) and housing fund contributions.
Between 5 and 15 days annually, depending on years of service, plus public holidays.
Employees receive 60–100% of salary depending on local rules, partly funded by employers and social insurance.
At least 98 days, with many provinces granting extensions.
Varies by region, typically 7–30 days.
Rates vary by city, but combined contributions often range between 30%–40% of gross salary.
No, contractors must manage their own taxes and insurance, but an EOR can employ them compliantly.
Employers must register and file contributions with local social security and housing fund bureaus.
Not by law, but many employers offer a “13th month” annual bonus.
An EOR ensures payroll accuracy, compliance with local laws, and fast hiring without a legal entity.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
