How to Hire Staff in China


How to Hire Staff in China With Embark

Our staff are experts in fields ranging from operations, payroll, accounting, and more. Learn what you need to expand your business and hire staff in China.

Photo by Li Yang

Introducing China

China, officially the People’s Republic of China (PRC), is a country in East Asia. It is the world’s most populous country with a population exceeding 1.4 billion people. China has the world’s second largest economy when measured by nominal GDP, totalling around US$17.7 trillion. China has four of the world’s top ten most competitive financial centers and three of the world’s ten largest stock exchanges (both by market capitalization and by trade volume).

Capital City - Beijing

Currency - Renminbi (¥, RMB)

Languages Spoken - Mandarin, Yue (Cantonese), Xiang (Hunanese) and various other dialects

Population Size - 1.41 Billion (2021)

Time Zone - GMT +08:00

GDP - USD 17.7 Trillion (2021)

Employee Classification

Employees can be majorly divided into two categories –  Contractors and Employees and defining relation with the employee is very important to avoid risks associated with misclassification.

The courts in India have applied the control and integration test to determine whether a person can be classified as an employee or independent contractor. The prima facie test is the control test to determine whether an employer-employee relationship exists and it is not merely to direct the nature of work that has to be carried out but also to control the manner in which it is done.

Another difference between an employer and contractors is an employer is required to withhold tax at the time of payment of salary to employees. The salary paid to an employee may include benefits and allowances that the employee is entitled to, which is beneficial to the employee from a tax perspective. However, with respect to independent contractors, the employer must withhold the applicable taxes; however, the amount paid may not be in the form of salary, but as professional fees for services performed. In both these cases, the employee and independent contractor/s will be required to file their income tax returns as prescribed under law.

Hiring Structure in China

Payroll Cycle

The payroll cycle in China is generally monthly, and payments are made on the last working day.

Public Holidays



January 1st

New Year’s Day

February 1st

Spring Festival (aka Chinese New Year)

April 5th

Tomb-Sweeping Day

May 1st

Labour Day

June 3rd

Dragon Boat Festival

September 10th 

Mid-Autumn Festival

October 1st

National Day


English name

January 1st

New Year

Febuary 1st

Spring Festival (Chinese New Year)

February 15th

Lantern Festival

March 4th

Zhonghe Festival (Dragon Raising its Head)

March 8th

International Women’s Day

March 12th

Arbor Day

April 5th

Qingming Festival (Chinese Memorial Day)

May 1st

Labour Day

May 4th

Youth Day

June 1st

Children’s Day

June 3rd

Dragon Boat Festival (Duanwujie)

July 1st

Chinese Communist Party Founding Day

July 11th

China National Maritime Day

August 1st

People’s Liberation Army (PLA) Day

August 4th

Double Seven Festival

September 3rd

Victory over Japan Day

September 10th

Mid-Autumn Festival (Moon Festival)

September 30th

National Memorial Day (Martyrs’ Day)

October 1st

National Day

October 10th

Wuchang Uprising

October 4th

Chongyang Festival

December 13th

Nanking Massacre Memorial Day

Benefits & Health Insurance

Mandatory benefits in China are based around the State Social Insurance System, which is administered by the municipal government. 

Mandatory employee benefits in China are state administered and they include retirement, medical care, unemployment, workers compensation, and maternity benefits. Supplemental employee benefits in China include three types of retirement benefits, life insurance and ADD, and healthcare.

Personal Income Tax

For residents, calculation of PIT on annual comprehensive income is based on progressive tax rates using the following formula:


(Annual taxable income x Tax rate) – Quick deduction


Annual taxable income (RMB*) (1)

Tax rate (%)

Quick deduction (RMB)


0 to 36,000



Over 36,000 to 144,000



Over 144,000 to 300,000



Over 300,000 to 420,000



Over 420,000 to 660,000



Over 660,000 to 960,000



Over 960,000



* renminbi


Employment Termination

Terminating an employee in China is more difficult and often more expensive than in many other countries, as the Chinese Labor Contract Law offers a high degree of protection to workers’ job security.

Termination with 30 days’ notice and compensation payment

Under the following three circumstances, an employer is allowed to terminate an employee unilaterally with 30 days’ notice or an additional month’s salary:

1. The employee can no longer work after becoming sick or injured.

2. The employee is incompetent for the position, even after training or a job transfer.

3. The objective situation on which the employment was originally based has changed considerably. As a result, the labor contract can no longer be fulfilled.

The terminated employee is also entitled to severance payment. And the employer is required to inform the labor union in advance when there is one.


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