Employing foreign employees in China requires careful attention to rules, regulations and costs. In this latest article in our series on financial services in China, we take a closer look at various benefits and obligations.
The Cost of Employing Foreigners in China
When it comes to employee services in China, it’s not surprising that CEOs and managers in parent companies would prefer to employ “one of their own” in senior positions in their China subsidiary. It is also not surprising that foreign employees relocating to China are faced with some hardships. Alongside the excitement and the new professional challenge, language and culture barriers also come into play.
Thus, when it comes to hiring foreigners in China, the process can sometimes be lengthy and costly.
Here are a few financial aspects that are worth paying attention to:
Before relocating to a different country, employees want to be guaranteed that they will enjoy the same standards of living as in their home country. This promise is embodied in the salary package.
In other words, the basic work compensation (such as base monthly salary, bonuses and social insurance) is just one component in the entire salary package. In order to incentivize them, the company includes a list of different allowances. By and large, a typical salary package is comprised of 30% such additional allowances:
- Housing (rent)
- Relocation expenses
- Daily meals
- International school tuition (when the family joins)
- Round trips for a home visit
- Business travel expenses
- Stock options
- Additional international insurances
Employees in China, either domestic or international, are entitled to the same protection and basic social benefits, including overtime pay and vacations.
However, as salaries and minimum wages across China vary, so does the contribution rate of employers to foreign employees’ social insurances:
Employers’ contribution rate for foreign employees
After conferring with their WFOE accounting, some employers are willing to offer even higher contributions to foreign employees, especially in industries that require highly professional and skilled labor.
Read more about HR services in China.
Working visa costs
Obtaining a working visa is one of the first steps in the employment process. It begins when the employee is still out of china, and continues during the short period after his or her arrival.
The cost for the working visa application changes based on the country of origin. It can go on a scale of between 1,000-1,500 RMB.
After landing in China, a medical check-up is another step in the process, which could cost between 300-700 RMB.
Last updated: May 2021
Regulations in China change relatively frequently. For the most up-to-date regulations, please check in with us.