Needless to mention, the interest of foreign countries is about to reach the peak of demand. Many business owners prefer investing here for their business because of their lowest tax rates. Are you on the same plan? That’s great! But before you expand your business there and hire us to handle employee payroll in China, you must have an idea of its structure.
Without understanding the China labour cost laws, you can’t hire the employees and calculate the salary even! In today’s blog, we can help you get some idea of it!
Essential aspects to ideate employee payroll in China
Though the China Corporate Tax is low, the laws are quite complicated to handle on your own. And while hiring us for China payroll services for your company, we prefer to let you know from the start!
Here, we have unveiled three facts to ideate the structure of the labour cost and employee payroll. Such as:
Monthly gross salary
While talking about the accurate salary count of your employees, this one plays a vital role here! Gross salary is the amount that you consider paying your employee as a fixed salary or flexible one. In other words, you can say that it is the amount your employees have before the individual tax deductions.
Also, gross salary consists of two parts that are fixed and flexible, as mentioned. The former one is that you will mention in the contract of recruitment while hiring the employee. The bonus, commission, and allowance refer to flexible salaries that are not constant and vary from time to time.
How much monthly net salary should you pay to your employee?
At APAC Taxation Group, our CPAs suggest calculating the contribution base and mandatory benefits of your employees. Generally, it depends on the rate policy and contribution base of the city.
Net salary is nothing but the amount that your staff takes home at the of the day after his Individual Income tax deduction. Yet, you have to consider the tax rates and contribute to mandatory benefits while deciding the net salary for an employee.
What’s the employee payroll cost at the time of hiring?
Apart from tax, we can help you in China Employment Service too. And in this regard, we advise you to add the mandatory benefits to the payroll cost during recruitment.
Do you need more help? Feel free to consult and follow us on Twitter for more information. Stay in touch!