Social Security Agreement with China

Finally, companies should note that non-payment of social security contributions if they do not receive the explicit consent of the local social security office carries an inherent risk. For example, the Sino-Japanese social security agreement, which entered into force on September 1, 2019, will exempt Japanese nationals from China`s basic pension contribution, as well as Chinese nationals from Japan`s national pension and employee pension insurance. China has also signed tabulation agreements with France and Serbia, which will not enter into force until the two sides complete the necessary domestic legal procedures. Incoming employees from these countries may benefit from certain Chinese social security exemptions after the entry into force of the corresponding tabulation agreements. In general, China`s social security system consists of five different types of insurance, as well as a compulsory housing fund, as shown in the table below. Therefore, employers should conduct social security research from city to city or consult with professional third-party services to ensure compliance. Workers who have already been posted to Switzerland by their Chinese employers before the entry into force of the agreement must present a certificate of coverage to the competent Chinese authorities (within three months of the entry into force of the SSA) in order to remain in their original social security system. This certificate of coverage is valid from the date of entry into the SSA at the earliest. While the old social security system only covered urban workers, agricultural workers who move to cities to work (or « migrant workers ») have gradually become involved over time.

While Social Security Exemption Agreements offer cost advantages to China-based businesses, companies need to be careful about how they use them. For example, in cities like Beijing, Tianjin, Shenzhen and Nanjing, among others, social security payments are mandatory for foreign workers – who are treated in the same way as domestic workers. On the other hand, Shanghai does not currently require foreign workers to contribute to social security. China has also signed agreements with France and Serbia; these agreements are not yet in force. From 1. As of September 2017, posted workers to China may remain partially insured for social security purposes in the Netherlands for a maximum period of five (5) years (see below for a discussion on coverage that will continue while working abroad). Those who are already in China are also eligible for a maximum period of five years. Family members who move with the seconded worker are also insured (Dutch state pension and survivors` insurance), unless they themselves work in China. Social security contribution base = total income of the previous year / 12* International social security agreements are beneficial both for people who are working now and for those whose professional careers have ended. For current workers, the agreements eliminate double contributions they might otherwise make to the social security systems of the United States and another country. For people who have worked in the U.S. and abroad and are now retired, disabled, or dead, the agreements often result in the payment of benefits that the employee or his or her family members would not otherwise have been entitled to.

First, the base of social security contributions is not the actual payment that workers receive for each month, a figure determined by the employee`s average income in the previous year (i.e. from January to December). The method of calculation is as follows: each agreement (with the exception of the agreement with Italy) contains an exception to the territoriality rule, which aims to minimise disruptions in the careers of workers whose employers temporarily post them abroad. Under this exemption for « freelancers », a person who is temporarily transferred to work for the same employer in another country remains insured only in the country from which he or she was posted. For example, a U.S. citizen or resident who is temporarily transferred by a U.S. employer to work in a contracted country will continue to be covered by the U.S. program and will be exempt from coverage of the host country`s system.

Both the employee and the employer only make contributions to the U.S. program. In order to correctly calculate the monthly amount of social security contributions, it is important that employers understand the basic rules for deciding on the contribution base. This report addresses some aspects of the recently ratified social security agreement between the Netherlands and the People`s Republic of China (« China »), which will enter into force on 1 September 2017. Hello, I plan to set up a company in Guangzhou with foreign employees. I would like to know whether social security is required for foreign staff in Guangzhou, just like in Shenzhen or not like in Shanghai. Chinese workers posted to the participating country are also exempt from the corresponding social security contributions in that country. Employers in Shanghai must demand foreign workers from Hong Kong, Macau and Taiwan from September 16. Sign up for China`s national social security system in August 2021 and pay contributions for it. .