Regional authorities manage the social insurance system – not all regional governments have enacted implementation rules for China’s international social security agreements. However, expatriates from Germany, Korea, Denmark, Canada, Finland, Switzerland, and the Netherlands are eligible for exceptions across China, and soon those from France and Spain will be as well. In this article, we look at who is eligible for exemption, and how to apply. Social insurance premiums in China
The Ministry of Human Resources and Social Security requires foreign employees working in China to participate in its social insurance scheme, as detailed in the Interim Measures for the Participation in Social Insurance of Foreigners Employed in China, 2011.
According to Chinese labor law, any foreigner employed by a legally registered entity in China, or any foreigner dispatched to a registered branch or representative office of a foreign company, must participate in basic pension insurance for employees, basic medical insurance for employees, work injury insurance, unemployment insurance and maternity insurance.
However, since social insurance is managed at a regional level, a range of inconsistencies exists amongst cities. As a result, most major cities have implemented their respective requirements for foreign employees.
For example, in cities such as Beijing, Tianjin, Shenzhen, and Nanjing, among many others, social insurance payments are compulsory for foreign employees, who are treated in the same way as domestic workers. Contrarily, Shanghai does not currently require foreign employees to contribute towards social insurance.
While not all regional authorities have implemented rules in accordance with international social security agreements, increasing the difficulty in obtaining exemptions for eligible expatriates, employees from countries that have agreements with China are eligible for social insurance exemptions.
To date, seven such agreements have been implemented between China, and the following countries: Germany, Korea, Denmark, Canada, Finland, Switzerland, and the Netherlands. China has also signed agreements with France and Spain; these agreements are not yet in effect.
All existing agreements define the groups of employees eligible for exemption, and lay out the categories of social insurance for which employees are exempt from paying. In turn, Chinese employees sent to the participating country will also be exempt from making the relevant social insurance contributions there.
Social insurance exemptions are only available to a defined group of labor categories, and not to all foreign employees. The seven bilateral agreements with China for social insurance payment exemptions that have been implemented are as follows: