Many cities across China have published average salary figures recently. Despite the economic pressures caused by Covid lockdowns, average salary has increased significantly across major cities.
The release of average salary has implications on a number of employee entitlements. This includes the calculation of statutory severance, social insurance contributions and housing fund contributions.
The table below shows the latest cap on monthly salary that is used to calculate statutory severance in major cities, which is equal to three times average salary of the city.
The above numbers are also used as the ceiling for calculating social insurance and housing fund contributions in Shanghai, as well as the social medical insurance and housing fund contributions in Shenzhen and Guangzhou. The social pension insurance contribution ceiling base in Shenzhen or Guangzhou uses the average monthly salary at the Guangdong provincial level instead.1 In Beijing, the ceiling amount of social insurance contributions for 2022 is RMB 31,884, different from the salary cap for severance (RMB 41,628), and the ceiling amount of the housing fund is yet to be announced.