China Social Contributions Guide 2026 — Pension, Medical, Housing Fund Rates

Overview of China's Social Insurance System (社保)

China's social insurance system (社会保险, shèhuì bǎoxiǎn) is mandatory for all employers operating in China and covers their Chinese and foreign employees. The system comprises five compulsory insurance programs plus the Housing Provident Fund (住房公积金, zhùfáng gōngjījīn). Contribution rates vary by city and province, though national guideline rates exist. Employers must register with local social insurance authorities and withhold the employee portion from wages. Total employer contributions typically range from 28-35% of gross salary, while employee contributions are about 10-12%. Foreign employees are generally required to participate, though China has bilateral social security agreements with some countries (Germany, South Korea, Japan, Canada, etc.) that may provide exemptions. Learn about WFOE registration and social insurance obligations →

Pension Insurance (养老保险)

Employer contribution: 16% of gross salary (national guideline; range 14-20% by city). This goes into the pooled fund used to pay current retirees. Employee contribution: 8% of gross salary. This is credited entirely to the employee's individual pension account, which accrues interest at a rate set by the state (typically 2-3% per year in 2026). The individual account forms the basis of the employee's future pension entitlement upon retirement. To qualify for a basic pension, an employee must have contributed for at least 15 years and reached the statutory retirement age (currently 60 for men, 55 for female white-collar workers, 50 for female blue-collar workers — though gradual reform is extending these ages). The total pension benefit consists of a pooled component (based on local average wages and contribution years) plus the individual account balance divided by a statutory divisor (139 months for retirement at age 60). Detailed breakdown of China's pension system →

Medical Insurance (医疗保险)

Employer contribution: Approximately 6.5% of gross salary (varies by city, generally 6-10%). Employee contribution: 2% of gross salary. Both contributions are split between a pooled fund (统筹基金, tǒngchóu jījīn) and an individual medical account (个人账户, gèrén zhànghù). The individual account can be used for outpatient expenses, pharmacy purchases, and deductibles for inpatient care. The pooled fund covers major hospitalisation costs above a certain threshold (起付线, qǐfùxiàn — typically 1,300-1,800 CNY for general hospitals) up to a cap (封顶线, fēngdǐngxiàn — usually around 300,000-500,000 CNY depending on the city). Reimbursement rates for inpatient care range from 70-97% depending on the hospital tier and expense amount. Medical insurance is pooled at the municipal level, so coverage and portability between cities can be limited — though the government has been improving cross-province settlement systems.

Unemployment Insurance (失业保险)

Employer contribution: 0.5% of gross salary (national guideline; range 0.5-1.5% by city). Employee contribution: 0.5% of gross salary. Unemployment insurance provides temporary income replacement for workers who lose their jobs involuntarily. Eligibility requires at least one year of continuous contributions and registration as unemployed at the local labour bureau. Benefits are paid monthly for 3-24 months depending on contribution years, at a rate of approximately 70-90% of the local minimum wage. Unemployment insurance also covers partial reimbursement for vocational training and job placement services. During the COVID-19 period (2020-2023), many cities reduced employer rates or provided exemptions — these temporary reductions have largely expired by 2026.

Work Injury Insurance (工伤保险)

Employer contribution: 0.2-1.9% of gross salary (entirely employer-paid, based on industry risk classification). No employee contribution. Rates are set by the local government based on the employer's industry category — low-risk sectors (office work) pay ~0.2%, high-risk sectors (construction, mining) pay up to 1.9%. The insurance covers medical expenses, disability pensions, and death benefits for workplace injuries and occupational diseases. Employers must report workplace injuries within 30 days to the local social insurance bureau for coverage to apply.

Maternity Insurance (生育保险)

Employer contribution: 0.5-1% of gross salary (entirely employer-paid, varies by city). No employee contribution. Maternity insurance covers maternity medical expenses (prenatal check-ups, delivery, postpartum care) and provides a maternity allowance equal to the employee's average daily wage multiplied by maternity leave days. The standard maternity leave is 98 days under national law, extended to 128-158 days in most provinces (2026). Additional leave may be available for late childbirth, caesarean section, or multiple births. Some cities have merged maternity insurance into medical insurance for administrative convenience.

Housing Provident Fund (住房公积金)

Employer contribution: 5-12% of gross salary. Employee contribution: 5-12% of gross salary. Unlike the five social insurances, the Housing Provident Fund (HPF) is a compulsory savings scheme administered by the local Housing Fund Management Centre. Both employer and employee contributions are deposited into a designated HPF account in the employee's name. The fund can be used for home purchase, construction, renovation, or rental expenses. HPF loans offer significantly lower interest rates than commercial mortgages (typically ~3.1% for a 5+ year loan in 2026, compared to ~4.2% for commercial loans). The contribution rate is set within the 5-12% band by the employer, subject to a maximum contribution base (usually 3x the local average wage). Foreign employees may be exempt from HPF participation depending on the city's regulations, though many cities now allow voluntary participation.

Contribution Caps and City Variations

Each social insurance has an upper contribution base (上限, shàngxiàn) and a lower contribution base (下限, xiàxiàn). The contribution base is the employee's actual salary but capped at 300% of the local average wage and floored at 60% of the local average wage. For the Housing Provident Fund, the cap varies — in Beijing (2026), the HPF ceiling is about 33,000 CNY/month. High earners will find their total social insurance contributions capped, making the effective tax rate lower above the cap. City-by-city variations are significant: Shanghai has higher medical rates (~9% employer), Shenzhen has lower pension rates (~14% employer), and Beijing is close to the national guidelines. Employers should verify exact rates with the local social insurance bureau or use a professional employer organisation (PEO) for compliance.

Total Employer Cost Calculator (Shanghai, 2026)

For an employee earning 25,000 CNY/month in Shanghai: Pension 16% = 4,000, Medical 9% = 2,250, Unemployment 0.5% = 125, Work Injury 0.3% = 75, Maternity 1% = 250, Housing Fund 7% = 1,750. Total employer cost: 8,450 CNY (33.8% on top of salary). Employee deductions: Pension 8% = 2,000, Medical 2% = 500, Unemployment 0.5% = 125, Housing Fund 7% = 1,750. Total employee deduction: 4,375 CNY (17.5% of salary). The employer cost is not a deduction from the employee's salary but a separate expense paid by the employer to the social insurance authorities.

How Social Contributions Affect Taxable Income

The employee portion of social insurance contributions and the Housing Provident Fund are deductible from taxable income for Individual Income Tax (IIT) purposes. This means the IIT is calculated on salary after deducting the employee's social insurance and HPF contributions. The employer's portion is not taxable as a benefit to the employee. Additionally, the special additional deductions (专项附加扣除, zhuānxiàng fùjiā kòuchú) under the IIT law — for children's education, continuing education, medical expenses, housing loan interest, housing rent, and elderly care — are deducted after social insurance. The total deductions significantly reduce the effective IIT rate for most employees. How to file IIT and claim deductions →