Employer of Record in China: 2026 Cost and Compliance Guide

China's employment law is national, under the Labour Law and the Labour Contract Law, but social insurance, the housing fund and the minimum wage are set by each city. This guide uses Shanghai, the only city whose 2026 figures we've checked; other cities differ, so ask for a quote for the city where your hire will live.

An Employer of Record (EOR) can employ your team under Chinese law, enrolling them in social insurance and the housing fund and running payroll, without you forming a wholly foreign-owned company.

One set of rules shapes EOR arrangements: labour dispatch. A licensed dispatch agency may place workers with a business only in temporary, auxiliary or substitute roles, and a business may use dispatched workers for no more than 10% of its workforce, though a foreign company's representative office is exempt from both limits. This guide covers costs, rules, providers and when to set up your own entity. Figures link to official sources. We do not test or use the providers listed; see our methodology.

An Employer of Record in China employs staff for foreign companies. It signs the Chinese labour contract, enrols the employee in pension, medical, unemployment and work injury insurance and the housing fund in their city, withholds individual income tax, and handles leave and termination under the Labour Contract Law.

Where the employee works under your direction, the arrangement can be labour dispatch (劳务派遣). Only a licensed agency with registered capital of at least CNY 2 million may run a dispatch business (Labour Contract Law art. 57), it must give the worker a fixed-term contract of at least two years (art. 58), and the worker is entitled to equal pay with the client's own staff in similar roles (art. 63).

Dispatch is meant as a supplementary form of employment, for temporary roles of up to six months, auxiliary roles serving the main business, or substitute roles covering absent staff (art. 66), and a business's dispatched workers may not exceed 10% of its workforce (Interim Provisions on Labour Dispatch, art. 4). Ask each provider how its model fits these rules for your hire.

New to EORs? Our guide to what an Employer of Record is answers the 30 most common questions, from who the legal employer is to what happens if a provider fails.

The Labour Contract Law treats ordinary labour contracts as the basic form of employment and labour dispatch as a supplement, allowed only in temporary roles lasting no more than six months, auxiliary roles that serve the main business, and substitute roles covering staff away for study, leave or similar reasons (art. 66). The client must also keep dispatched workers to no more than 10% of its total workforce (Interim Provisions on Labour Dispatch, art. 4).

A foreign company's resident representative office is exempt from the role and ratio limits (Interim Provisions, art. 25), and a representative office must in any case hire its staff through a local foreign-affairs service unit or another unit designated by the government (1980 State Council Interim Provisions, art. 11). A business that sends its own employees to work abroad isn't using dispatch (art. 26).

Breaches are fined at CNY 5,000 to 10,000 per worker if not corrected in time, the agency can lose its licence, and the agency and the client are jointly liable for harm the client causes the worker (Labour Contract Law art. 92). A business may not set up its own dispatch agency to dispatch workers to itself (art. 67).

Questions to ask a provider

Chinese employment cost has three layers: gross salary, employer contributions (social insurance and the housing fund, set by city) and the EOR fee. The figures below are for Shanghai in 2026.

In Shanghai, social insurance is charged on a base of the employee's previous year's average monthly pay, between CNY 7,546 and CNY 37,731 a month from July 2026, so the percentage falls above that ceiling. An employee earning less than the floor is still charged on the floor.

Annual cost at example salaries

What these figures include and exclude

• Rates and bases differ by city, and some change each July. Ask the provider for the rates for the city where your employee is registered.
• Social insurance has a minimum base as well as a maximum: in Shanghai, CNY 7,546 a month from July 2026, so contributions on a salary below that are higher than the percentages suggest.
• Overtime is paid at at least 150% of wages on working days, 200% on rest days if time off in lieu isn't given, and 300% on statutory holidays (Labour Law art. 44). These are not included above.
• Employee contributions and individual income tax are deducted from pay and are not employer costs.

Estimate your own cost

Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive. For worked examples at four salary levels, see cost to hire an employee in China.

Chinese employment is governed by the Labour Law and the Labour Contract Law, with State Council regulations on working time, leave and holidays, and city rules on social insurance and the minimum wage.

Labour dispatch (EOR relevance)

Dispatch is allowed only through licensed agencies with at least CNY 2 million of registered capital, only in temporary (up to 6 months), auxiliary or substitute roles, and for no more than 10% of the client's workforce. Dispatched workers get a fixed-term contract of at least 2 years and equal pay with the client's comparable staff.[1]

Labour Contract Law arts. 57, 58, 63 and 66; Interim Provisions on Labour Dispatch art. 4. Representative offices of foreign companies are exempt from the role and ratio limits (art. 25). Breaches: fines of CNY 5,000–10,000 per worker and joint liability (Labour Contract Law art. 92).

Employment contracts

Contracts are fixed-term, open-ended or for a specific task. An open-ended contract is required if the employee asks or agrees to renew after 10 years' continuous service or after two consecutive fixed-term contracts, and one is deemed to exist if no written contract is signed within a year of starting.[1]

Labour Contract Law art. 14.

Probation

Up to 1 month on a contract of 3 months to under a year, 2 months on 1 to 3 years, and 6 months on 3 years or more or open-ended, once per employee. Probation pay must be at least 80% of the agreed wage and not below the local minimum wage.[1]

Labour Contract Law arts. 19 and 20. No probation on task-based contracts or contracts under 3 months.

Notice periods

An employer terminating for illness, incapacity after training or redeployment, or a major change in circumstances must give 30 days' written notice or one month's pay instead. An employee resigning gives 30 days' written notice (3 days during probation).[1]

Labour Contract Law arts. 37 and 40. An employer may not terminate on these grounds while an employee is on medical leave, pregnant, on maternity leave or nursing, among other protected cases (art. 42).

Severance pay

Economic compensation of one month's pay for each year of service (half a month for under six months), based on the average of the last 12 months. Where monthly pay exceeds three times the local average wage, it's calculated at that cap and for no more than 12 years.[1]

Labour Contract Law arts. 46 and 47. It's due on the terminations listed in art. 46, including termination under arts. 40 and 41 and the expiry of a fixed-term contract, unless the employee turns down a renewal on the same or better terms. In Shanghai the cap is 3 × CNY 12,577 = CNY 37,731 a month.

Working time

Standard hours are 8 a day and 40 a week. Overtime is paid at at least 150% on working days, 200% on rest days without time off in lieu, and 300% on statutory holidays.[11]

State Council Provisions on Working Hours art. 3; Labour Law art. 44.

Annual leave

5 days of paid annual leave after a year of continuous work, 10 days after 10 years' total service and 15 after 20 years. Untaken leave the employer couldn't arrange is paid at 300% of daily wages.[13]

Regulations on Paid Annual Leave for Employees (State Council Order No. 514), arts. 2, 3 and 5.

Public holidays

13 days of public holidays from 2025: New Year's Day (1), Spring Festival (4), Qingming (1), Labour Day (2), Dragon Boat Festival (1), Mid-Autumn Festival (1) and National Day (3).[14]

Measures on National Holidays and Memorial Days, art. 2, as amended by the State Council decision of November 2024, in force from 1 January 2025.

Maternity leave

98 days' maternity leave, of which up to 15 can be taken before the birth, with 15 more for a difficult birth and 15 for each additional baby. Maternity allowance is paid by maternity insurance where the employee is covered.[15]

Special Rules on the Labour Protection of Female Employees (State Council Order No. 619), arts. 7 and 8. Provinces and cities can add leave under their own rules.

How China compares

• EOR pricing in China and other countries: Lowest published provider fee, employer costs and the monthly total.
• Employer social security: how China compares: Every mandatory employer contribution, with rates and ceilings.
• Severance pay: how China compares: What the law requires an employer to pay when employment ends.
• Notice periods: how China compares: Minimum employer notice, and how it grows with service.
• Minimum wage: how China compares: Official rates, annual equivalents and a US-dollar comparison.
• Annual leave: how China compares: Statutory minimum leave and public holidays, country by country.
• Employer pension contributions by country: Rates, earnings ceilings and scheduled increases.
• EOR labour hire rules by country: Where an EOR falls under staff-leasing licences or time limits.

These EOR providers publish a page about employing in China. Prices are their own published starting rates in USD; we haven't checked whether any of them charges more in China.

Also ask how the provider's model fits the labour dispatch rules, which city's social insurance it will register your hire in, and whether it can obtain a work permit for a foreign hire.

Compare providers for China

• RemoFirst vs PlayrollIn China: US$199 vs US$399 a month (published starting prices).
• Remote vs Atlas HXMIn China: US$599 vs US$599 a month (published starting prices).
• Globalization Partners vs Atlas HXMIn China: US$599 vs US$599 a month (published starting prices).
• RemoFirst vs Atlas HXMIn China: US$199 vs US$599 a month (published starting prices).

For China-specific selection criteria and a shortlist, see best EOR providers in China. For each provider's products and pricing model, see the provider directory.

Setting up your own presence usually means a foreign-invested company. A foreign company's representative office must hire its staff through a local foreign-affairs service unit or another unit designated by the government.

Running costs include accounting, tax filings, payroll, and social insurance and housing fund registration in the city where you operate.

What a team costs through an EOR

Annual cost of a team of mid-level professionals on CN¥300,000 each, with statutory employer costs from our cost model and an EOR fee of CN¥4,016 per employee per month (a common published starting price of US$599). Providers may price differently for larger teams, so ask for a quote. US-dollar amounts use the US Treasury rate of 6.705 CNY per US$1 (30 September 2026).

The salaries and employer costs are the same whoever employs the team. The difference is the EOR fees: CN¥240,960 a year for 5 employees, CN¥1,204,800 a year for 25 employees and CN¥2,409,600 a year for 50 employees. A Chinese entity becomes cheaper once running it, including payroll, costs less than that.

Work out your own break-even with the EOR vs entity calculator, or see the step-by-step method in EOR vs local entity: a break-even framework.

1. 1

   Define the role, salary and cityDay 0

   Agree a monthly salary, the city where the employee will be registered (which sets contributions and the minimum wage), any year-end bonus, and leave above the statutory minimum.

2. 2

   Check the employment model

   Ask whether the provider employs through labour dispatch and how your hire's role fits the temporary, auxiliary or substitute categories.

3. 3

   Compare itemised quotes1–3 days

   Request quotes for the city covering the fee, deposit, each social insurance line, the housing fund, severance and offboarding. Use the estimator to sanity-check totals.

4. 4

   Contract and onboardingDepends on the provider and permits

   The EOR issues a written Chinese labour contract with any probation within the legal limits and registers the employee for social insurance and the housing fund. Foreign hires need a work permit before they start.

5. 5

   Ongoing administrationMonthly

   Monthly payroll, social insurance and housing fund contributions, and individual income tax withholding.

Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.

1. 1
   中华人民共和国劳动合同法 (Labour Contract Law, 2012 revision)

   Shanghai Municipal People's Government

   Arts. 14 (open-ended contracts), 19–20 (probation), 37 and 40–42 (notice and protected employees), 46–47 (economic compensation), 57–59, 63, 66–67 (labour dispatch), 92 (penalties).

2. 2
   劳务派遣暂行规定 (Interim Provisions on Labour Dispatch, MOHRSS Order No. 22)

   State Council Gazette, 2014 No. 12

   Art. 4 (dispatched workers no more than 10% of the workforce), art. 25 (representative offices exempt from role and ratio limits), art. 26 (sending own staff abroad isn't dispatch).

3. 3
   国务院关于管理外国企业常驻代表机构的暂行规定 (1980)

   National Administrative Regulations Database, Ministry of Justice

   Art. 11: representative offices hire staff through a local foreign-affairs service unit or another unit designated by the government.

4. 4
   本市调整2026年度社保缴费基数上下限

   Shanghai Municipal Human Resources and Social Security Bureau

   From 1 July 2026 the contribution base is CNY 7,546 to 37,731 a month; Shanghai's 2025 average wage was CNY 12,577 a month.

5. 5
   单位缴纳社会保险费的比例是多少？

   Shanghai Municipal Human Resources and Social Security Bureau

   Employer rates: pension 16%, medical 9% (including maternity), unemployment 0.5%, work injury 0.2–1.9%.

6. 6
   关于继续阶段性降低本市职工基本医疗保险费费率的通知

   Shanghai Healthcare Security Bureau

   Employer medical contribution 9% (8.5% basic including maternity, 0.5% local supplementary), employee 2%, from 1 March 2026 to 28 February 2027.

7. 7
   关于本市失业保险和工伤保险费率有关事项的通知 (沪人社规〔2024〕25号)

   Shanghai Municipal People's Government

   Unemployment insurance 1% (employer 0.5%, employee 0.5%) from 1 January to 31 December 2025.

8. 8
   关于调整本市工伤保险费率等问题的通知 政策问答

   Shanghai Municipal Human Resources and Social Security Bureau

   Work injury base rates of 0.2%, 0.4%, 0.7%, 0.9%, 1.1%, 1.3%, 1.6% and 1.9% for industry classes 1 to 8; dispatch agencies are class 2 (21 January 2026).

9. 9
   上海市住房公积金缴存管理办法

   Shanghai Municipal People's Government

   Art. 17: the contribution base is capped at 3 times the city's average wage, with the local minimum wage as the floor; rates are set each year (art. 33).

10. 10
    上海市人力资源和社会保障局关于调整本市最低工资标准的通知 (沪人社规〔2025〕10号)

    Shanghai Municipal Human Resources and Social Security Bureau

    Monthly minimum wage CNY 2,740 and hourly CNY 25 from 1 July 2025.

11. 11
    国务院关于职工工作时间的规定

    National Administrative Regulations Database, Ministry of Justice

    Art. 3: 8 hours a day, 40 hours a week.

12. 12
    加班工资 (quoting Labour Law art. 44)

    Shanghai Municipal Human Resources and Social Security Bureau

    Overtime at no less than 150%, 200% on rest days without time off in lieu, and 300% on statutory holidays.

13. 13
    职工带薪年休假条例 (State Council Order No. 514)

    Central People's Government of the PRC

    5, 10 or 15 days of paid annual leave by total service; untaken leave paid at 300%.

14. 14
    国务院关于修改《全国年节及纪念日放假办法》的决定

    Central People's Government of the PRC

    From 1 January 2025: Spring Festival 4 days and Labour Day 2 days, 13 public holidays in all (art. 2).

15. 15
    女职工劳动保护特别规定 (State Council Order No. 619)

    Central People's Government of the PRC

    Art. 7: 98 days' maternity leave; art. 8: maternity allowance from maternity insurance.

China's employer costs are high and city-specific: in Shanghai, social insurance and the housing fund add about a third to salary up to CNY 37,731 a month, and severance is a month's pay per year of service.

The rule to raise with every provider is labour dispatch: if your hire's role isn't temporary, auxiliary or a substitute, ask how the provider's model complies, and get the city's rates in writing.

For a growing team, compare against your own entity with our EOR vs local entity guide, and see Hong Kong and Taiwan for nearby markets with different rules.