PEO China

Professional Employer Organization (PEO)

Employer of Record (EOR) | Remote Work

peo china

World Bank Ease of Doing Business Ranking

  • DB Rank – 31
  • DB Score – 77.9

Rankings on Doing Business topics – China

Topic Scores

topic scores china

Global PEO in China

China holds significant appeal as a PEO (Professional Employer Organization) country, owing to its vast market size, rapid economic growth, and diverse range of industries. As one of the world’s leading manufacturing and trading hubs, China offers exceptional opportunities for international businesses seeking to establish a presence in the Asia-Pacific region. By leveraging PEO services in China, companies can access a skilled and cost-effective workforce, navigate the complexities of local labor laws and regulations, and streamline HR and payroll processes. Moreover, China’s government has been actively encouraging foreign investment, and its modern infrastructure and technological advancements make it an attractive destination for companies seeking to expand globally. While navigating the unique business and cultural landscape in China may present some challenges, utilizing PEO services can significantly simplify the entry and expansion process, allowing businesses to focus on growth and market penetration in this dynamic and promising market.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

China – Country Overview

China has the second-largest economy globally and is a prominent economic and technological dominion in eastern Asia. Additionally, the country has the world’s most significant hydroelectric power potential and numerous mineral resources. However, China can be a complicated country for newcomers since it has several provinces, each with its own set of criteria.

Capital City



Yuan Renminbi (¥)

Principal Language

Mandarin, Cantonese


Communist party-led state

Employment Contracts in China

Per the Labor Contract Law, a written contract is the most common type of contract in China. However, written agreements are not mandatory for part-time employees. 

The employer and employee must copy the agreement in Chinese and any relevant foreign language depending on the local dialect. 

China employment contracts typically include: 

  • Contract term 
  • Social security 
  • Protection against occupational hazards, labor protection, and working conditions 
  • Liability for contract breach
  • and more 

The different types of employment relationships are: 

  • Permanent Employment – Permanent employment relationship is also known as a contract without a fixed term as there is no indication of an end date in the agreement. Under these contracts, terminations can be complex. 
  • Fixed-Term Contracts – Under China’s Labor Law, fixed-term agreements are labor contracts in which both parties have agreed on the termination period.
  • Short-term Employment – Often, employers can use employment service agencies or labor dispatch agencies for temporary work that is less than six months. 

Probationary Period 

According to China’s Labor Contract Law, probationary periods vary from one to six months, subject to the length of the employment contract. 

Working Hours in China

Employees are required to work 8 hours per day or 44 per week. Overtime in China cannot exceed 36 hours per month.

Holidays in China

Employees in China are entitled to the following leaves: 

  • Annual leave in China – Per China’s labor law, employees are entitled to paid annual leave after working for a continuous period of one year. Annual leaves vary from 5 to 15 days, depending on the years of service. 
  • Sick leave in China – Employees in China are entitled to sick leave ranging from three months to two years, depending on their years of service. 
  • Maternity leave in China– Per China’s Special Rules on the Labor Protection of Female Employees, employees receive a minimum of 98 days of maternity leave are allowed. Many provincial governments, however, have raised this minimum threshold.
  • Paternity leave in China – Although China’s Labor Law does not provide statutory paternity leave on a national level, all municipal or provincial governments grant it. Paternity leave varies from 7 to 30 days, depending on the region. 

There are various other types of leave categories available to employees with specific situations. 

Public Holidays 

The following are the statutory national holidays in China: 

  • January 1 – New Year’s Day 
  • January 2 – New Year’s Holiday 
  • January 3 – New Year’s Holiday 
  • February 11 – Spring Festival Eve 
  • February 12 – Chinese New Year 
  • February 13 – Spring Festival Golden Week Holiday 
  • February 14 – Spring Festival Golden Week Holiday 
  • February 15 – Spring Festival Golden Week Holiday 
  • February 16 – Spring Festival Golden Week Holiday 
  • February 17 – Spring Festival Golden Week Holiday 
  • March 8 – International Women’s Day 
  • April 3 – Qing Ming Jie Holiday 
  • April 4 – Qing Ming Jie Holiday 
  • April 5 – Qing Ming Jie Holiday 
  • May 1 – Labor Day 
  • May 2 – Labor Day Holiday 
  • May 3 – Labor Day Holiday 
  • May 4 – Labor Day Holiday 
  • May 4 – Youth Day 
  • May 5 – Labor Day Holiday 
  • June 12 – Dragon Boat Festival Holiday 
  • June 13 – Dragon Boat Festival Holiday 
  • June 14 – Dragon Boat Festival Holiday 
  • September 19 – Mid-Autumn Festival Holiday 
  • September 20 – Mid-Autumn Festival Holiday 
  • September 21 – Mid-Autumn Festival Holiday 
  • October 1 – National Day 
  • October 2 – National Day Golden Week Holiday 
  • October 3 – National Day Golden Week Holiday 
  • October 4 – National Day Golden Week Holiday 
  • October 5 – National Day Golden Week Holiday 
  • October 6 – National Day Golden Week Holiday 
  • October 7 – National Day Golden Week Holiday 

Employee leave in China

Statutory paid annual leave in China is far less than in other countries and is calculated based on the employee’s tenure with the company:

  • Before one year = no leave entitlement
  • 1- 10 years of employment = five days of leave per annum.
  • 10 – 20 years of employment = 10 days of leaves per annum.
  • More than 20 years of employment = 15 days of paid leave per annum.

Female employees get 98 days of statutory maternity leave. For paternity leave, the laws may vary from province to province, but it is not more than 14 days.

Chinese employees have access to 3 to 24 months of paid leave for medical issues. How long the employee has been with the company determines the exact time a person will get.


Tax and other payroll deductions or contributions

China’s max Personal Income Tax Rate is 45% and has been for many years.

For employees earning below ¥960,000 the brackets are:

  • Up to  ¥36,000        3%
  •  ¥36,000 –  ¥144,000 10%
  •  ¥144,000 –  ¥300,000 20%
  •  ¥300,000 –  ¥420,000 25%
  •  ¥420,000 –  ¥660,000 30%
  •  ¥660,000 –  ¥960,000 35%

Both employees and employers are required to pay social insurance contributions in China. The approximate contributions for this are:


  • Pension – 8%
  • Unemployment – 0.1-1.0%
  • Medical – 2%
  • Occupational injury – N/A
  • Maternity – N/A
  • Housing fund – Matched by employer
  • Total = Around 10-11%


  • Pension – 14-22%
  • Unemployment – 0.2-2%
  • Medical – 3-12%
  • Occupational injury – 0.4-3%
  • Maternity – 0.5-1%
  • Housing fund – 5-25%
  • Total = Anywhere between 23-55%

Global Mobility in China

Visitors from most countries are obligated to have a visa to enter and stay in China. However, tourists from Japan, Brunei, and Singapore can enter the country without a visa for up to 15 days for traveling or personal visits. 

There are typically the following categories of visas in China: 

  • C – Crew 
  • D – Resident  
  • F – Non-business activities 
  • G – Transit  
  • J1 – Journalists whose intended duration of stay exceeds 180 days 
  • J2 – Journalists whose intended duration of stay is less than 180 days 
  • L – Tourist  
  • M – Business 
  • Q1 – Family Reunion where the intended duration of stay must exceed 180 days 
  • Q2 – Family Reunion where the intended duration of stay is less than 180 days 
  • R – Talent/ Skill 
  • S1 – Private Visit where the intended duration of stay must exceed 180 days 
  • S2 – Private Visit where the intended duration of stay is less than 180 days 
  • X1 – Students where the intended duration of stay must exceed 180 days 
  • X2 – Students where the intended duration of stay is less than 180 days 
  • Z – Work 

Before obtaining a work permit in China, foreign employees need an employment license (provided by their employer). Work permit applications are available at embassies and consulates and must meet specific criteria. 

Foreign employees in Beijing are required to obtain a non-criminal background check approved by Chinese authorities. 

Employee Benefits in China

Employers must provide their employees with social insurance benefits. They must contribute 20% to social security, covering pensions, health insurance, maternity insurance, work-related injury insurance, and unemployment insurance. Generally, the employer contributions differ by province.  

Per China’s Social Insurance Law, all employees hold the right to basic old-age insurance, contributed to by both the employee and the employer.  

Some examples of social insurance programs in China are: 

  • Dependents’/Survivors Benefit – The survivors of the deceased are entitled to receive bereavement allowances. The basic old-age insurance fund covers the expenses and determines the amount following local regulations. 
  • Life and Disability Insurance/Benefit – Employers must enroll their employees in the work injury insurance system, a part of the country’s social insurance system. Only the employer contributes to work-related injuries. 

Table of Contents