PEO & Employer of Record (EOR) in China

Expand Your Business With Our China PEO

GlobalPEO delivers a top tier employer of record service for clients that are looking to recruit, hire, and operate payroll services without first setting up their own subsidiary in China. 

How it Works: Our China PEO & China Employer of Record (EOR) hires your candidate while abiding by local labor laws and cultural customs. The newly hired employee will communicate directly with your company and perform all job functions as if they were your own employee. We act as your in-country HR department and handle the entire onboarding, payroll, and benefits process in strict accordance to China’s regulations.

Why Choose our China PEO?

Market Entry Cost Savings

Without needing to setup a local entity in China, companies save thousands when expanding with GlobalPEO. From $400 USD.

Quicker Time to Hire

Scale and onboard your workforce in days, not months by using our local entities and experts in China.

Mitigate Risk

Minimize risk by ensuring your company is compliant with local laws and cultural customs and protecting your business from potential fines and legal fees.

Convenience + Flexibility

Streamlined process for managing your payroll, benefits, and HR responsibilities with full flexibility to make changes at any time.

China PEO & Employer of Record

Hire, onboard, and manage employees in China quickly and easily with GlobalPEO. Working with our China PEO and Employer of Record solution eliminates the headaches that come with establishing a foreign legal entity and guarantees full compliance with local regulations.

Local Employer of Record

Your employees based in China will sign a local employment contract with GlobalPEO's in-country entity. Labor contracts are available in English and Chinese, with employee payments processed in the local Chinese Yuan currency. As the local Employer of Record, GlobalPEO operates with full compliance to the laws and regulations of China's Bureau of Labor.

Payroll Processing

GlobalPEO's complete payroll processing includes:

- New employee setup
- Social Insurance contributions
- Individual income tax declaration
- Expenses declaration
- Payslip provision
- Dedicated payroll officer
- Support for standard employment documents

Employee Onboarding

After officially hiring your local candidate, our China HR team will schedule an onboarding conference call with both the candidate and client. The onboarding process typically takes between 3-5 days.

Legal Liability Coverage

Our PEO solution covers the following functions to take legal liability as the local employer of record:

- Obligatory social and pension insurance enrollment.
-Employee income tax withholding
- Liabilities of early-termination, including severance calculation and mediation.
- Onsite health and safety liability coverage, which is shared with the client

Termination Guidelines

In the event a client decides to pause or end their presence in China when employing staff through our PEO and Employer of Records service, there are no termination fees to be paid as long as the client adheres to the 60 day termination-notice period.

#1 - Fast Facts For Hiring in China

Put Everything In Writing

It is legally mandated that all full-time employees receive a written contract within their first month of employment. If an employer fails to do so within the first 30 days, the employee is entitled to receive twice their salary until a formal contract is established.

Respect The Concept of "Face"

In Chinese culture, "face" refers to the respect, honor, and reputation of its citizens. If you have a grievance to discuss with an employee, it is best to handle the situation privately to avoid disgracing the employee in front of their peers.

Understand The "13th Month Salary"

Also referred to as an annual bonus, the "13th month salary" is the standard kind of bonus allotted to employees working in China at the end of the year. Because of how common this practice is in China, we recommend being abundantly clear with the employee during the initial contract phase so you are on the same page regarding their annual salary and bonus structure.

#2 - Working Hours in China

The People’s Republic of China sets a standard five day working week that does not surpass 8 hours of work per day or 44 hours per week. Most companies operate in an 8am to 6pm schedule with a two hour lunch break during the middle of the day.

#3 - China Employment Contracts

The Chinese Government legally requires that employers provide a strong employment contract that clearly states the employee’s compensation, benefits, and termination requirements. All employment contracts in China should state the salary and any additional compensation in Chinese Yuan Renminbi instead of any foreign currency. 

#4 - Chinese National Holidays

There are 7 national holidays that are celebrated annually in China. These holidays include New Year’s Day, Chinese New Year, QingMing Festival, Labor Day, Dragon Boat Festival, Mid-Autumn Festival, and National Day. 

It is customary to allow employees flexibility for their travels around Chinese New Year so they have the opportunity to avoid peak travel days. The gesture of providing the day off before or after national holidays is seen as an extremely gracious benefit by local employees. 

Note that the statutory minimum is legally required to be paid for nationally recognized holidays. 

#5 - Bonus Payments in China

The “13th month salary” is the most commonly used bonus structure for employees operating in China. When negotiating a contract with your prospective employees, be sure to clearly state the salary and bonus structure from the beginning so that there is no miscommunication resulting in discontent employees at the end of the year.

#6 - Employment Benefits in China

Much like a 401k plan, employees working in China receive a housing fund through their employers. Chinese employers are required to contribute between 5% and 25% of an employee’s annual salary to this fund. The purpose of this fund is to provide a subsidy to the employee’s rent or housing purchasing expenses. It is common for employees to negotiate a higher housing fund percentage than is federally required. The exact percentages relating to the housing fund vary city to city. 

While standard health and pension insurance is provided by the national government, it is relatively common for supplementary health insurance to be provided by the employer. 

We suggest allotting 25% of your China expansion employee salary budget to account for employer taxes. 

#7 - Sick Leave in China

Depending on how long an employee has been with a company, they will be entitled to somewhere between 3 and 24 months’ of paid leave to address medical ailments and treatment. Sick pay should never drop below 80% of the local minimum wage. 

In terms of workers compensation for injuries or sicknesses incurred while working, the employee is legally entitled up to 1 year leave at full pay to receive medical treatment.

#8 - Maternity Leave in China

A 98 day paid maternity leave is the standard practice for women working in China. They have the option to begin this leave within 15 days before child birth. Depending on the city, women over the age of 24 are generally provided with an additional 30 days for their “late maternity leave.”

Women are traditionally granted full pay during their leave, which is either paid through social security or by their employers. 

China’s laws surrounding paternity leave differ greatly by location, but rarely exceeds 14 days. Men in Shanghai usually receive 3 days of paternity leave while men in Shenzhen are typically granted 10 days. 

Note that is is illegal to terminate an employee who is pregnant or still breastfeeding a newborn child. 

#9 - Termination & Severance in China

Terminating an employee in China must be supported by a strong cause for dismissal and clearly documented grievances leading up to the termination. The initial employment contract must contain an agreed upon probationary period that can last up to 6 months in length. 

The time requirements for submitting notice of termination vary widely by industry. Any employer terminating an employee of one month to two years tenure must provide at least a one week notice. Employees working for a company for over two years require notice of one week for each year of completed service up to 12 weeks of notice.

Employers have the option of including “payment in lieu of notice” in employee contracts which permit employers to pay employees instead of providing them with a notice of termination. This is common in Chinese business practice. 

#10 - China's Tax Laws

All Chinese employees are granted statutory benefits within the “five insurances” practice in China. These include health insurance, pension, worker’s compensation, maternity benefits, and unemployment insurance. However, additional benefits, such as housing, are predicated by the income tax bracket of the individual employee. 

Why Choose GlobalPEO?

Global expansion is a great step for your business – and now it’s easier than ever. Setting up your own entity in each country where you wish to operate can be expensive, complicated, and requires deep knowledge of the specific rules and regulations. Let GlobalPEO take care of everything. From International PEO & EORGlobal Payroll and International Recruiting  we deliver our exceptional services at an affordable price.