[Help] Social security in Tianjin, 8 Questions and Answers

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China's Social Security System

China’s Social Security System consists of 5 mandatory insurance schemes (pension fund, medical insurance, industrial injury insurance, unemployment insurance, and maternity insurance) + a housing fund (only applicable to Chinese employees).

 

After the measure indicating an increase of scrutiny of the 21st of November 2020, [Compliancy] Social security payment is handled by taxes bureau now.

 

Tianjin Link has made a quick Q/A with our Human Resource specialists on social security in Tianjin.


1. When shall the unit enroll employees for social security?

In a delay of 30 days after starting the labor relation (including the trial period), the enterprise should pay social security for the worker. 

If it does not, the worker can apply to labor arbitration, request supplementary payment, and get economic compensation. 


According to article 84 of the " Social Insurance Law of the People's Republic of China ", if the employer does not apply for social insurance registration, the social insurance administrative department shall order correction within a time limit; if it fails to make corrections within the time limit, the employer shall impose a fine of more than one time but less than three times the amount of social insurance premiums payable, and the person directly in charge and Other persons directly responsible shall be fined not less than 500 yuan but not more than 3,000 yuan.


2. Who pays what and how much?

Both employer and employee pay contributions. 


Employers will withhold employees’ contributions and may deduct them from salaries (according to the labor contract) 


Employees' contributions are deducted before the calculation of personal income taxes. Contributions are according to the table under:



Note 1: 

The minimum salary declaration base is 3364 yuan equivalent to 1222 yuan of social security monthly payment. 


The capped salary declaration base is 18969 yuan equivalent to a capped 7117 yuan of social security monthly payment. 


Note 2: 

Part of the employee medical insurance is monthly withdrawable and pension insurance is withdrawable when the employee leaves China. 

How to claim social insurance payments when leaving china


Note 3:

Without a social security card, the employee won’t be able to enjoy medical insurance. But the employee has to apply for it himself. 

How to apply for a social security card.


3. Which enployees shall be enrolled? 

All employers must enroll their Chinese and foreign employees into China’s social security system. 


It is considered illegal if a company does not contribute any social insurance or housing fund for its employees in China. 


Then we recommend every employer to hire a licensed and qualified human resource personnel or a licensed service provider to handle it. 


4. Can employees opt-out? 


Unless Shanghai, Tianjin does not offer any opt-out option. 


Any agreement between an employer and an employee not to contribute to the social security system or to make contributions on a smaller salary will be invalid in the case of a labor dispute.


The employer might be required to repay salary contribution and can face fines


5. Which employees are exempted? 


In short: Except for foreign talents of more than 60 years all, all foreign employees shall be enrolled. (and for foreigners of more than 60 years old mandatory private insurance shall be subscribed)


-Part-time workers (not available for foreigners). 


-Employees with an age of 60 years old and more (for foreigners mandatory private insurance shall be subscribed). Interns (for foreigners only after EEA approval). 


-Employees with no wages, for less than 2 years (no wages contracts are not accepted by SAFEA for work permit application). 


-Labor dispatched employees (not available for foreigners, for Chinese employees the dispatching unit will contribute and charge a service fee to the receiving unit). 


6. Is there some exemptions for Foreigners? 


As said previously, generally they are no exemption for foreign employees in Tianjin But citizens of Germany, Korea, Denmark, Canada, Finland, Switzerland, the Netherlands, Spain, Luxembourg, and Japan could be exempted from some of the contributions of the social security in China and only if the social security is paid in their home country


7. Can an employer provide private insurance instead of Chinese Social security? 


No, private insurance or medical insurance is only a benefit on top of the mandatory social security. 


8. How is the base salary calculated, how to change it? 


When registering a new employee into social security, the employer will declare a base salary.


Base salary will be adjusted every year in January according to the real income of the employee in the previous year. 


Important notice taxes and social security are merged now! 


Bonus and other derived income have to be included in the social security base. 


When an employee starts a new contract with a new employer the social security can be adjusted ( up or down )


 

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