Hiring in China

A foreign company can hire in China through its own Chinese employing entity, a locally lawful employer of record arrangement, or a genuinely independent contractor. An employer of record arrangement needs structural review because labour dispatch has role and quota limits; a contractor must remain independent in practice. 4dev.com's Contractor Platform works with independent contractors in China, as its country list shows.

Three ways to hire in China

Choose the route by identifying the legal employer and how the person will work in practice. For a full-time Shanghai hire, the local wage floor is ¥2,740 a month before employer additions.

Route	Legal employer	What you pay on top of salary	How you end it
Your own entity	Your Chinese employing entity	In Shanghai, the fixed employer social-insurance rates total 25.5%; work-injury insurance and the housing fund are additional and variable.	Use a statutory ground; for statutory no-fault dismissal, 30 days or 1 month pay applies.
Employer of record	The named Chinese employing party in the underlying arrangement, which may be a licensed dispatch agency.	Gross salary, locally applicable statutory employer additions and a separately quoted provider fee.	The underlying employment structure and contract govern; there is no universal EOR exit rule.
Contractor	The contractor or its registered business contracts for services.	The agreed service price and contract terms; employee salary contributions and statutory employment notice do not set this route.	The service contract controls, provided the working relationship remains genuinely independent.

For a Shanghai entity, the 25.5% figure combines fixed employer rates of 16% for pension, 9% for medical and maternity insurance, and 0.5% for unemployment insurance. Add work-injury insurance, with an industry base rate of 0.2%–1.9%, and the elected ordinary housing-fund rate of 5%, 6% or 7%. These Shanghai rates do not yield a complete employee cost by themselves.

An EOR label does not establish a permitted employing structure. Where the arrangement is labour dispatch, the using unit must test the temporary, auxiliary or substitute-role rule, the general 10% staffing cap and the provider's licence. A registered foreign-enterprise representative office has a specific exception from the role-type and proportion limits, not a general entity-less employment route.

The labour market: which China salary figure can you use?

Match any salary figure to the hire’s location, employment population and role. Shanghai’s contribution-base average, national wage series and a three-area manufacturing survey measure different groups; none gives a national job-offer or net-pay benchmark.

Salary reference points

Shanghai, 2025 all-calibre urban-unit average; used to set the 2026 social-insurance base	Shanghai ¥12,577 / month	Shanghai 2026 social-insurance bases
China, 2025 urban non-private units; mean annual wage	CNY 129,441 / year	NBS 2025 wage report
China, 2025 urban private units; mean annual wage	CNY 71,590 / year	NBS 2025 wage report
China, 2025 enterprises above designated size; mean annual wage	CNY 106,080 / year	NBS 2025 wage report
Shanghai Qingpu, Jiangsu Wujiang and Zhejiang Jiashan, 2024 manufacturing survey; information and communications engineers, median annual wage	CNY 128,592 / year	Yangtze River Delta manufacturing wage report
Same three-area 2024 manufacturing survey; electrical engineers, 75th-percentile annual wage	CNY 180,948 / year	Yangtze River Delta manufacturing wage report

The national figures are separate means for their stated employment populations; check the definitions in the National Bureau of Statistics wage report before using one in a budget. The role observations come from a 2024 manufacturing survey covering Qingpu, Wujiang and Jiashan. They are useful for those roles and areas, not as Shanghai-wide software salary medians.

Registering as an employer, step by step

For a foreign-invested company in Shanghai, prepare the company application before hiring through that entity. Setup time varies; the written-contract and social-insurance deadlines both run from the employee’s start date.

Step	What happens	Takes
Choose the employing structure and local jurisdiction	Confirm that a direct Chinese employing entity, rather than a dispatch or contractor route, fits the role and work location.	Varies
Prepare the company application	Assemble the application form, articles of association, shareholder-qualification documents and lawful-domicile documents for the foreign-invested company.	Varies
Submit through the integrated portal	Use Shanghai’s integrated startup portal for company registration, seal-making, tax matters and the employee social-insurance application.	Varies
Set up the first hire	Put the agreed terms into a written labour contract.	Within one month after work begins
Register social insurance	The employer applies to register the employee for social insurance.	Within 30 days after employment starts

The last two rows are parallel legal deadlines measured from the start of employment: conclude the written contract within one month and apply for social-insurance registration within 30 days. Neither period estimates incorporation or time to first payroll.

Hiring and onboarding

Set the written terms and any probation period, register the employee for social insurance, and keep the monthly wage record.

Legal limits in the first month

Conclude the written labour contract within one month of the start date and apply for social-insurance registration within 30 days of that same date. A probation period forms part of the contract term and may be agreed only once with the same worker. It can be up to 6 months only for a fixed-term contract of at least three years or an open-ended contract. In Shanghai, pay is due at least monthly and the employee must receive a pay slip.

Onboarding checklist

• Record the role, workplace, agreed wage and contract term in the written labour contract.
• Check the local minimum-wage floor and the deductions that will appear in the payroll record.
• Apply for social-insurance registration within 30 days after employment starts.
• Keep the monthly pay slip and the underlying wage record.
• For a foreign national, resolve the work-permission and Z-visa documents with the actual employing party before setting the start date. A work-class residence-permit applicant entering on a Z visa submits work-permission proof and an employing-unit letter; where a residence permit is required, the application is due within 30 days after entry.

Minimum wage: local rates, not one China figure

China’s minimum-wage floor is set locally, so use the rate for the employee’s work location and employment type.

Shanghai full-time monthly minimum, from 1 July 2025	Shanghai ¥2,740 / month	Shanghai 2025 minimum-wage notice
Beijing monthly minimum, from 1 September 2025	CNY 2,540 / month	Beijing 2025 minimum-wage notice
Shenzhen monthly minimum, from 1 September 2026	CNY 2,700 / month	Shenzhen 2026 minimum-wage notice
Shanghai part-time hourly minimum, from 1 July 2025	CNY 25 / hour	Shanghai 2025 minimum-wage notice

For Shanghai’s full-time monthly floor, overtime pay, specified allowances and subsidies, and the employee’s statutory social-insurance and housing-fund deductions sit outside the minimum-wage calculation. The part-time hourly rate has a different basis, so it is not a monthly rate converted into an hourly one.

Shanghai’s monthly floor rose from CNY 2,480 in April 2019 to CNY 2,590 in July 2021, CNY 2,690 in July 2023 and CNY 2,740 in July 2025. There was no adjustment in 2020 or 2022; the chart plots the effective-date changes.

Taxes and contributions in Shanghai

In Shanghai, separate the employee’s income-tax calculation from the employer’s statutory additions to gross pay.

Resident individuals’ comprehensive income is taxed at 3–45%, after the CNY 60,000 annual standard deduction and any other prescribed deductions. That individual tax calculation does not describe the employer’s cost.

Employer pension	16%	Shanghai employment-insurance rates
Employee pension	8%	Shanghai employee contribution rates
Employer medical and maternity insurance	9% through February 2027	Shanghai medical-insurance rate
Employee medical insurance	2%	Shanghai medical-insurance rate
Employer unemployment insurance	0.5%	Shanghai employment-insurance rates
Employee unemployment insurance	0.5%	Shanghai employee contribution rates
Employer work-injury insurance	0.2%–1.9% industry base rate; the actual rate can float	Shanghai work-injury rates
Ordinary housing provident fund	Employer and employee each elect 5%, 6% or 7%	Shanghai housing-fund rate options
Social-insurance assessment base	CNY 7,546–37,731 / month from 1 July 2026	Shanghai 2026 social-insurance bases
Housing-fund assessment base	CNY 2,740–37,731 / month	Shanghai housing-fund base rule

The fixed employer pension, medical and maternity, and unemployment rates add to 25.5%. That is a Shanghai social-insurance subtotal, not a national rate or an all-in employment cost: work injury and the housing fund sit outside it.

What an employee actually costs you

The examples below apply Shanghai July 2026 bases and rates, a class-I 0.2% work-injury rate and a chosen 7% ordinary housing-fund rate. They exclude bonuses, voluntary or supplemental benefits and funds, provider fees, and employer-specific levies; the annual figures are twelve repeated ordinary months under those assumptions.

Salary input	Gross / month	Pension	Medical + maternity	Unemployment	Work injury	Housing fund	Employer additions	Monthly total	Annual total
Shanghai 2025 all-calibre city average wage	¥12,577.00	¥2,012.32	¥1,131.93	¥62.89	¥25.15	¥880.39	¥4,112.68	¥16,689.68	¥200,276.16
Three-area 2024 manufacturing survey: information and communications engineers, median	¥10,716.00	¥1,714.56	¥964.44	¥53.58	¥21.43	¥750.12	¥3,504.13	¥14,220.13	¥170,641.56
Three-area 2024 manufacturing survey: electrical engineers, 75th percentile	¥15,079.00	¥2,412.64	¥1,357.11	¥75.40	¥30.16	¥1,055.53	¥4,930.84	¥20,009.84	¥240,118.08
Shanghai minimum-wage illustration	¥2,740.00	¥1,207.36	¥679.14	¥37.73	¥15.09	¥191.80	¥2,131.12	¥4,871.12	¥58,453.44
Shanghai contribution-ceiling illustration	¥37,731.00	¥6,036.96	¥3,395.79	¥188.66	¥75.46	¥2,641.17	¥12,338.04	¥50,069.04	¥600,828.48

The two role rows apply Shanghai rates illustratively to one-twelfth of a 2024 manufacturing survey covering Qingpu, Wujiang and Jiashan. They do not represent Shanghai-wide software salaries. The minimum-wage, local-average and contribution-cap examples also show how employer additions change with the applicable assessment bases.

Why the two lower bases matter

At the Shanghai minimum-wage illustration, social insurance uses the CNY 7,546 lower base while the ordinary housing fund uses the CNY 2,740 lower base. Both reach a CNY 37,731 cap, so the CNY 2,740 and CNY 37,731 examples illustrate assessment boundaries rather than market salaries. The calculation uses the selected class-I work-injury rate and 7% housing election; other employers may use different rates.

Working time and overtime

For the standard national working-time system, schedule eight hours a day and 40 hours a week, then treat overtime as a limited exception rather than a routine extension of the week.

Ordinary overtime is generally limited to one hour a day. In special circumstances, it can reach three hours a day where workers’ health is protected, but it remains capped at 36 hours a month; the rule also requires consultation with the union and workers for production or operational need.

Extended hours	At least 150% of normal working-time pay	Labour Law
Rest-day work where no compensating rest is arranged	At least 200%	Labour Law
Statutory-holiday work	At least 300%	Labour Law

Compensating rest affects the rest-day payment rule, while statutory-holiday work has its own rate. If a role uses a different working-time system, check the approval and rules applicable to that arrangement before scheduling it.

Leave, sick pay and parental leave

Apply national leave rules first, then add the Shanghai entitlements that depend on the employee’s location and eligibility.

Paid statutory annual leave, national	5–15 days after one continuous year of work, based on cumulative work history	National annual-leave regulation
Statutory public holidays, national	13 days	National holiday regulation
2026 holiday calendar	Compensating working weekends around Spring Festival, Labour Day and National Day	2026 holiday notice
Maternity leave, national	98 days, including 15 before birth; difficult or multiple births add time under the stated conditions	Female employees protection regulation
Birth leave, Shanghai	60 additional days for qualifying births	Shanghai Population and Family Planning Regulation
Spouse birth leave, Shanghai	10 days	Shanghai Population and Family Planning Regulation
Childcare leave, Shanghai	5 days each year for each parent until the child turns three	Shanghai Population and Family Planning Regulation
Short sick leave, Shanghai employee with under two years’ service	For five days, 60% of own wage, with a floor of 80% of the city minimum wage	Shanghai sick-pay guidance

If an employer cannot arrange earned annual leave with the worker’s consent, the statutory pay for the unused days is 300% of daily wages. The 13 statutory days are distinct from longer calendar breaks created by compensating working weekends.

The 98-day maternity baseline is national; the additional birth, spouse and childcare leave and the short sick-pay example are Shanghai-specific. For leave pay and maternity cash benefits, check the applicable local social-insurance and benefit rules.

Termination: which rule applies to the reason?

End a China employment relationship by first identifying the statutory ground, because notice, process and compensation change with that ground.

Route	Applicable rule
Employee resignation	The employee may resign with 30 days’ written notice, or three days’ notice during probation.
Serious-fault dismissal	Article 39 includes serious rule violations and serious dereliction; this is a distinct statutory route.
Statutory no-fault dismissal	The employer gives 30 days or 1 month pay. This wording applies only to the Article 40 no-fault route.
Collective redundancy	At least 20 workers, or fewer than 20 but at least 10% of the workforce, triggers a 30-day advance explanation to the union or staff and a report to labour authorities.

Statutory economic compensation is one month’s average wage for each full year of service. For a remaining period shorter than a year, six months or more counts as a full year; less than six months earns half a month. For wages above three times the local prior-year average, the compensation wage base is capped at that level and the paid service years at twelve; do not substitute Shanghai’s social-insurance average for the relevant severance benchmark without checking it.

Before dismissal, check whether a protected-employee rule limits the proposed ground. If the termination is unlawful and reinstatement is not pursued or possible, the employer owes twice the statutory economic-compensation amount.

Recent changes affecting employers

• From 2025: China began a gradual retirement-age increase over fifteen years, moving the male age from 60 to 63 and the former female ages of 50 and 55 to 55 and 58.
• 1 March 2026–28 February 2027: Shanghai’s employer medical-insurance rate remains 9% for that published period. Check the applicable rate again for a payroll period beginning in March 2027.
• 1 August 2026: Shanghai’s revised enterprise wage-payment measures took effect.
• 2026 calendar: Spring Festival, Labour Day and National Day arrangements include compensating working weekends, so plan the work calendar against the official holiday notice rather than the statutory-holiday-day count alone.

What a mistake costs and who pays

A late written contract can trigger double wages, and unlawful dismissal can require twice the statutory economic-compensation amount. Minimum-wage and social-insurance underpayments have case-dependent consequences.

Party	Risk	Amount
Employer	No written employment contract after the first month and before one year of employment	Double monthly wages
Employer	Unlawful termination where reinstatement is not pursued or is not possible	Twice the statutory economic-compensation amount
Employer	Minimum-wage or social-insurance underpayment	Case-dependent

Track the written-contract deadline during onboarding. Before ending employment, check the statutory ground, notice or payment-in-lieu requirement, and compensation calculation against the circumstances of the case. Calculate any contribution arrears or wage shortfall from the employee’s actual records and the applicable rule; the Shanghai cost examples show employer additions only at the stated wage and assessment-base boundaries.

Questions people actually ask

What is the minimum wage in China in 2026?

China does not have one national monthly minimum wage: provincial, autonomous-region and municipal governments set local floors. As current examples, Shanghai’s full-time monthly floor is ¥2,740 from 1 July 2025, Beijing’s is ¥2,540 from 1 September 2025, and Shenzhen’s is ¥2,700 from 1 September 2026. Use the rule for the employee’s place of employment and check the effective date.

Is ¥10,000 a good salary in China?

¥10,000 cannot be rated as “good” across China without the city, occupation, seniority and employer population. For context only, Shanghai’s 2025 all-calibre urban-unit average was ¥12,577 a month, while the 2024 median annual wage for information and communications engineers in a three-area Yangtze River Delta manufacturing sample was ¥128,592. Neither measure is an offer benchmark or a Shanghai-wide software median.

What is the average salary in Shanghai?

Shanghai’s 2025 all-calibre urban-unit average wage was ¥12,577 a month, the figure used for its 2026 social-insurance contribution base. It is a citywide all-calibre measure for that administrative purpose, rather than an average for a particular role, sector, seniority level or take-home pay.

Does China have a 40-hour work week?

China’s standard working-time system is eight hours a day and 40 hours a week. Under that system, ordinary overtime is generally limited to one hour a day, or up to three hours in special circumstances while protecting health, and 36 hours a month; different approved working-time systems need their own legal basis.

Can a foreign company hire directly without a China entity?

A foreign company assessing a China hire should identify the Chinese legal employer before treating the arrangement as direct employment. The routes to assess are a Chinese employing entity, an employer of record arrangement subject to its applicable structural limits, or a genuinely independent contractor whose day-to-day work supports that status.

How much does a Shanghai employee cost beyond gross salary?

At a ¥12,577 monthly gross wage, the Shanghai illustration adds ¥4,112.68 of employer contributions, for a total monthly cost of ¥16,689.68. It uses July 2026 rates and bases, a class-I 0.2% work-injury rate and a 7% ordinary housing-fund election; voluntary benefits, provider fees and employer-specific levies are excluded. Actual cost changes with the employee’s assessment base, industry and housing-fund election.

How much notice must an employer give?

For an Article 40 no-fault termination, the employer gives 30 days’ written notice or one month’s pay in lieu; that rule does not apply to every termination ground. An employee ordinarily gives 30 days’ written notice to resign, or three days during probation, while serious-fault cases and other statutory grounds have different rules.

Can a foreign employee start before work permission is complete?

Confirm the required work permission before setting a foreign employee’s start date. A Z-visa entrant applying for a work-class residence permit must submit work-permission proof and an employing-unit letter; a foreigner whose visa requires a residence permit must apply within 30 days of entry. An incomplete permission process is no clearance to begin work.

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