Employee Insurance Entitlements in China
July 6, 2009 · Print This Article
What insurance payments and employer contributions are required by law?
The following insurance coverage and contributions are required by law:
1. Basic Pension
2. Basic Medical Insurance Premium
3. Unemployment Insurance Premium
4. Work Injury Insurance Premium
5. Maternity Insurance Premium
6. Housing Accumulation Fund
How much is an employer required to contribute in Beijing?
Employers are required to contribute the following amounts on behalf of employees:
1. Pension: 20% of the employee’s basic salary.
2. Medical Insurance Premium: 10% of the employee’s basic salary.
3. Unemployment Insurance Premium: 1.5% of the employee’s basic salary.
4. Work Injury Insurance Premium: 0.5% of the employee’s basic salary.
5. Maternity Insurance: 0.8% of the employee’s basic salary.
6. Housing Accumulation Fund: In Beijing, prescribed amount is 12% of the employee’s basic salary.
How much is an employee required to contribute in Beijing? Employees are required to contribute the following amounts:
1. Pension: 8% of the employee’s basic salary.
2. Medical Insurance Premium: the employee’s basic salary multiplied by 2% +3 RMB.
3. Unemployment Insurance Premium: 0.5% of the employee’s basic salary.
4. Work Injury Insurance Premium: 0.5% of the employee’s basic salary.
5. Maternity Insurance: 0.8% of the employee’s basic salary.
6. Housing Accumulation Fund: In Beijing, prescribed amount is 12% of the employee’s basic salary.
It should be noted that in respect of the payment of Work Injury Insurance Premium and Maternity insurance, only the employer must pay for these two types of insurance.
How do you determine the employee’s basic salary?
The benchmark for all social insurance including pension, unemployment, work – injury, maternity and basic medical insurance shall be decided by the employee’s average salary of the previous calendar year (monthly average salary of actual income between January and December of the previous year). Once the benchmark is confirmed, any further changes shall not be possible within the year of payment.
On March 25, 2009, the Beijing Municipal Social Insurance Fund Management Center issued a Notice of Benchmark and Amount of Payment for Social Insurance for Employees in Beijing. For the year of 2009, the monthly average salary of Employees in Beijing is RMB 3, 726 . For the employee’s monthly salary which exceeds three times of the monthly average salary of employees in Beijing (means RMB 11,178), the maximum amount for benchmark for payment of social insurance shall be RMB 11, 178 .
What are penalties for failing to make the prescribed payments?
According to “Chapter IV Penalty Provisions” of “Interim Regulation on the collection and payment of social insurance premiums” and other regulations, if the entity fails to pay its proportion for employee’s insurance and housing accumulation fund or failed to withheld the employee’s proportion of social insurance and housing accumulation fund, the entity will be punished depending upon severity of the breach; this could be a fine, a warning and or the notation of a fault record.
By Kelly Zong , Attorney & Matthew McKee, Foreign Legal Counsel
Tags: China, medical insurance, injury insuranceRelated Posts:
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