As regards foreign nationals employed in China, the Interim Measures for Participation in Social Insurance of Foreigners Employed in China (“Measures” -在中国境内就业的外国人参 加社会保险暂行办法, ), which came into force on 15 October 2011, requires foreigners employed by organisations/ legal entities incorporated in China to participate in social insurance programs.

Key features of Measures are as follows

  • The social insurance contributions (to be made by the employer and employee see table below for their respective contribution rates) consist of the PRC’s recognised categories of insurance – i.e. pension, medical, work related injury and unemployment etc
  • An employer employing any foreigner must make a social insurance registration on behalf of the foreigner within 30 days of issuing their employment certificate/ working permit.
  • If a foreign employee leaves China before qualifying for their pension benefits, their individual social insurance account will be left open and their period of contributions will be retained until they are employed in China again. However, the employee may apply in writing for termination of the social insurance relationship, so that any balance in their private social insurance account can be refunded in a lump sum

The table below shows the social security contributions which must be made by employer and employee as a percentage of the employee’s base** salary.

Click here to view table.

(**) The Base is the relevant employee’s average wage of last year, which is capped at 3 times the average monthly wage of employees in each particular city (as published by the government authorities). Note that the average wage of employees in Beijing for the year 2012 is around RMB 5,223 per month; in Shanghai it is around RMB 4,692.

In practice, the roll out of the Social Insurance Law varies in terms of substance and implementation from city to city in China. For local Chinese citizens, it has been fully implemented for many years.

As for the foreign employees, the Beijing government has already started accepting social insurance payments for Beijing’s foreign employees. On 20 December 2011, the Beijing Social Insurance Fund Management Center released the “Circular on Issues Concerning the Improvement of Participation in Social Insurance by Foreigners Employed in Beijing (“Circular” - 关 于进一步做好在本市就业的外国人参加社会保险工作有关问题 的通知). This document details issues relating to foreigners’ social insurance registration and backdated payment of the insurance premium etc.

In accordance with the Circular, “a foreigner who qualifies for participation in social insurance and has been employed in Beijing before 31 October, 2011 shall make a backdated payment of the insurance premium for the period from October to December 2011. A foreigner who qualifies for participation in social insurance and has been employed in Beijing after 1 November 2011 shall make a backdated payment of the insurance premium from the month in which the foreigner is employed to the month immediately before the one in which the foreigner’s social insurance registration is made”.

Measures has not yet been implemented in Shanghai but employers should watch this space as it remains possible that the Social Insurance Law for foreign employees could be enforceable and implemented at any time.