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12 min read

How to Hire Employees in China Using an Employer of Record (2025)

Employer of record

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Author

Jemima Owen-Jones

Last Update

June 27, 2025

Table of Contents

What is a China Employer of Record (EOR)?

Top reasons to use an EOR in China

How to hire employees in China: Step-by-step guide

Employment compliance tasks an Employer of Record manages in China

How much does it cost to hire through an EOR in China?

Which China Employer of Record should you choose?

Is Deel Employer of Record a strong choice for hiring in China?

Hire employees in China confidently with Deel Employer of Record

Key takeaways
  1. Setting up a Chinese entity to hire local talent can take months and cost over RMB 100,000 in legal, tax, and payroll setup.
  2. A China Employer of Record lets you engage talent through its local entity, bypassing setup delays, legal costs, and compliance headaches, including PIPL liability.
  3. Deel EOR owns its China entity for full control, supports hiring in 150+ countries, delivers transparent pricing, real-time compliance monitoring, and has top G2 ratings.

China is now home to more than 400 million highly skilled workers, a thriving tech startup scene, and world-class manufacturing clusters. The market potential is undeniable, yet building a local team means wrestling with unfamiliar statutory costs, city-by-city payroll rules, and China’s strict Personal Information Protection Law (PIPL). Miss a filing deadline or misclassify a contractor, and the penalties can wipe out months of growth.

That’s why global companies increasingly turn to Employer of Record (EOR) solutions for market entry. An EOR enables you to hire employees in China immediately, while the EOR—not you—becomes the legal employer, shouldering social insurance, payroll, employment contracts, and ongoing audits.

Deel EOR, with 14 wholly owned entities across Mainland China, adds an extra layer of transparency: flat fees, real-time compliance alerts, and a single dashboard to run payroll in 120+ countries.

See also: What’s the Fastest Way to Enter Markets and Hire Globally?

What is a China Employer of Record (EOR)?

A China Employer of Record has a licensed local entity in each Chinese province that hires employees on your behalf, appearing on the labor contract and payslips as the legal employer. You retain day-to-day control—job description, KPIs, compensation—while the EOR assumes the legally required statutory obligations to ensure compliance with Chinese labor laws:

  • Contracts and onboarding: Drafts bilingual fixed-term or open-ended contracts within the Labor Contract Law’s three-part format (name, job scope, compensation)—essential because employment contracts must be in writing within one month of the hire
  • Payroll & taxes: Calculates and withholds Personal Income Tax (PIT) and pays five social insurances plus one housing fund each month through China’s PAYE system
  • Liability shield: If an audit arises, authorities pursue the EOR’s local entity first, not your HQ, helping you avoid compliance pitfalls
  • Local expertise: Navigates city-level contribution rates that swing five percentage points between Shanghai and Chengdu, ensuring every employee in China is covered under local law

See also: Employer of Record (EOR): A Complete Guide

Deel Employer of Record
Hire employees globally with the #1 Employer of Record
Deel provides safe and secure EOR services in 100+ countries. We’ll quickly hire and onboard employees on your behalf—with payroll, tax, and compliance solutions built into the same, all-in-one platform.

Top reasons to use an EOR in China

China’s employment landscape differs depending on the province and is often unclear. An EOR cuts through that complexity, making it easier to hire employees in China and unlock immediate advantages:

  • Entity-free entry: Bypass the two-to-four-month timeline and unpredictable setup and running costs when establishing a legal entity in China
  • Social insurance accuracy: One misfiled pension contribution can trigger late fees. An EOR like Deel files on time, every time
  • Misclassification protection: Court rulings like the Meituan delivery case (2023) cement steep back-pay penalties for disguised contractors. An EOR protects you from these misclassification risks
  • Data-localization compliance: PIPL mandates in-country data storage and security assessments for cross-border transfers—Deel EOR’s China servers and SCC templates keep you covered and compliant
  • Cost clarity: Deel EOR bundles the variable 27% to 44% statutory costs with a flat EOR fee, eliminating hidden markups tied to salary bands, so you know the true cost to hire employees in China
  • Scalable growth: Spin up new headcount in any mainland city, leverage Deel Compensation to benchmark local pay, and take advantage of Deel EOR across 150+ other countries. Deel will even help with setting up a legal entity in China when the time feels right

Choosing Deel was easy—they offer unmatched compliance and HR support that scales with fast-growing companies like ours. They’ve been the best partner for executing our global hiring strategy.

Yunjung (Rina) Bae,

Director of People, MarqVision

How to hire employees in China: Step-by-step guide

Use this eight-step checklist to onboard your first employee in China without the headaches of establishing a legal entity, opening local bank accounts, or dealing with municipal tax bureaus.

1. Choose an EOR with a wholly-owned China entity

Start by confirming that the EOR owns its Chinese legal entities rather than outsourcing to in-country partners. Ownership guarantees full control over payroll and compliance and avoids middleman fees. Deel EOR operates wholly-owned entities in 14 provinces, including Shanghai, Beijing, Shenzhen, and Chengdu, enabling city-specific social insurance and housing fund filings.

Tip: Ask the sales rep to confirm the EOR’s Unified Social Credit Code certificate during due diligence to ensure compliance.

2. Book a demo and verify social proof

Get a live platform walkthrough to understand how the EOR handles Mandarin payslips, multi-city contribution tables, and PIPL data segregation. Check G2, TrustRadius, and online forums like Zhihu for client feedback. Deel scores 4.8/5 on G2 across 3,000+ reviews, many citing China payroll stability.

Tip: During the demo, request a mock payslip for Shanghai and another for Chengdu to confirm city-tier adaptability and adherence to local law.

3. Request a transparent EOR quote

A compliant quote should separate: 1) gross salary, 2) real statutory costs (five insurances + housing fund), and 3) EOR fee. Social insurance contributions range from 21%-32% of salary, depending on location. Deel EOR lists each rate line-by-line and locks the management fee for the year.

Tip: Compare costs before you expand—read our article EOR vs. Entity Costs: What’s More Affordable?

4. Submit a 12–24-month hiring plan

Chinese tax bureaus scrutinize abrupt payroll fluctuations. Sharing your growth roadmap lets the EOR pre-register workforce quotas with local authorities, smoothing approvals. Deel’s workforce-planning tool, powered by AI, forecasts headcount costs over two years.

Tip: Include an optional 10% buffer in your plan to accommodate unplanned hires without re-filing.

5. Create the employment contract in the platform

Chinese labor law requires fixed-term or open-ended contracts in writing, Mandarin-Chinese or bilingual, with probation capped at six months. Deel’s contract generator guides you through mandatory clauses: job duties, working hours, social insurance, confidentiality, and non-competition, ensuring every employment contract is fully compliant.

Tip: Enable Deel IP Guard to attach the invention-assignment language—key because the employer owns service inventions by default

6. Confirm the candidate’s right to work

Hiring foreigners? You’ll need a Foreigner Work Permit and a Residence Permit. Deel Immigration can sponsor visas and work permits, coordinate medical checks, and register residence within 24 hours of arrival. For Chinese nationals, the EOR verifies the ID card against the National Citizen Identity database.

Tip: Run background, work authorization, and work permit eligibility checks at the offer stage to avoid last-minute surprises.

7. Run the onboarding workflow

Click “Onboard” in Deel; the employee fills bank, tax, and social insurance details. Deel automatically enrolls them in:

  • Pension
  • Medical
  • Unemployment
  • Work-injury
  • Maternity
  • Housing fund

All within city-specific portals, ensuring the employee in China receives all legally required benefits. The worker approves the bilingual contract via e-signature; Deel affixes the company chop digitally, then stores the file in an encrypted China-based cloud.

Tip: Use Deel Engage to roll out training and performance goals, and Deel IT to provision equipment.

8. Maintain ongoing compliance

Each month, Deel’s payroll engine withholds PIT using China’s cumulative tax method, files electronic payslips, and remits contributions. Real-time compliance alerts flag regulatory changes, like Shenzhen’s housing fund rate bump announced with only one week’s notice in 2024.

Tip: Subscribe to Deel’s compliance newsletter to receive clear and concise summaries of relevant compliance changes.

Platform Tour
Explore the Deel platform
See how easy it is to add and configure a brand-new employee contract through the Employer of Record service. Click to launch a platform demo.

Employment compliance tasks an Employer of Record manages in China

Below is an overview of core 2025 statutory requirements and how a China EOR like Deel manages them for you, ensuring compliance with Chinese labor law and local regulations.

Category Key Requirements (2025)
Statutory Employer Costs Social insurance contributions—including pension (14–20%), healthcare (5–10%), unemployment (0.5–0.8%), work injury (0.2–0.5%), and maternity insurance (0–1%)—all of which apply to all employees. Employers must also contribute 7%–12% to the Housing Fund, matched by the employee. These rates vary by city. Optional benefits, such as private health and life insurance or business travel coverage, can be offered via Deel partners (e.g., Allianz, Ping An, Chubb), but must be provided equally to all employees if offered.
Employment Contracts & Probation Rules In China, employers must sign a written contract within one month of an employee’s start date or face double salary penalties and a default non-fixed term contract after one year. Probation is allowed once and cannot be extended. Length depends on the contract: up to 1 month (contracts <1 year), 2 months (1–3 years), or 6 months (>3 years). Termination during probation requires cause and proof. While not mandatory, probation is common and varies by region, with a typical 3-day notice period.
Pay and Working Hours Salaries must meet or exceed local minimums—Shanghai has the highest monthly rate (RMB 2,690/US$370), and Beijing has the highest hourly rate (RMB 26.4/US$3.70) as of June 3, 2025. Standard hours are 8 per day, 40 per week, with paid overtime (150%–300%) capped at 36 hours monthly. Flexible schedules are permitted, but may not require overtime pay.
Payroll & PAYE Compliance China follows a monthly payroll cycle, with a cut-off on the 20th and payment on the last day of the month. Gross salary includes base pay and bonuses; net pay reflects statutory deductions and taxes. Income tax is calculated annually with progressive rates (3%–45%) after a standard deduction of CNY 60,000 and applicable contributions. Employee deductions vary by province, based on capped salary bands. Payslips itemize all earnings and deductions, including pension, medical, unemployment, housing fund contributions, and taxes.
Vacation and Public Holiday Allowances Starting in 2025, China’s public holidays increase from 11 to 13 days, adding Lunar New Year’s Eve and May 2 for Labour Day. Employees working on these days receive 300% overtime pay. Statutory annual leave depends on cumulative work tenure: none for under 1 year, 5 days for 1–10 years, 10 days for 10–20 years, and 15 days for over 20 years. Annual leave is prorated for new hires based on days worked. Rest days are at least one per week, typically weekends but flexible by employer. Paid annual leave is reduced if employees take extended sick leave or personal leave. Unused leave must be compensated at 200% of the daily wage plus the regular wage if not carried over.
Income Taxes China taxes individual income with rates from 3% to 45%. Employers must withhold tax on wages, bonuses, and allowances before paying net salary. Residents—those living in China 183+ days yearly for over six years—are taxed on worldwide income after a RMB 60,000 annual deduction. Non-residents pay tax only on China-sourced income with a RMB 5,000 monthly deduction. The six-year rule exempts foreigners from global tax until they meet residency criteria. Employers must classify employees correctly for tax withholding.
Expenses, Allowances, and Bonuses Allowances cover specific employee expenses like housing, transportation, meals, communication, and education. Bonuses reward performance or company profits, including performance bonuses and the common annual (13th-month) bonus. All bonuses are taxable and must be included in payroll for accurate tax withholding.
Statutory Benefits & Pension Requirements In China, statutory employee benefits include Social Security with employer contributions of 21%-32% and employee contributions of 10%-11%, covering State Pension (14%-20% employer, 8% employee), Public Healthcare (5%-10% employer, 2% employee), Unemployment Insurance (0.50%-0.80% employer, 0.20%-0.50% employee), Worker-related Injury Insurance (0%-0.50% employer), and Maternity Insurance (0%-1% employer). The Housing Fund requires equal contributions from employers and employees, ranging from 7%-12%. Optional benefits offered through providers include private health insurance (Allianz China), private life insurance (Ping An), and travel, kidnap, and ransom insurance (Chubb). These optional benefits are employer-discretionary but must be offered equally if provided. Benefit availability may vary by province and should be confirmed locally.
Maternity, Paternity, Parental, Adoption & Foster Leave Maternity leave in China includes 98 days of paid leave nationwide, plus extra local leave varying by region. Payment depends on maternity insurance; if not covered, employers pay. Leave usually starts 15 days before birth but can be flexible. Foreign employees get basic leave but often not local extras. Employers should enroll employees in maternity insurance, set clear policies, communicate well, and follow local rules. Paternity leave varies by region, typically 7 to 30 days.
Sick Leave, Bereavement Leave, and Carer’s Leave In China, bereavement leave is typically 1–3 paid days for the loss of a parent, spouse, or child, though local rules may extend this to in-laws or other family members. Leave terms are guided by national labor laws but vary by region and employment contract. Sick leave entitlements depend on total and current job tenure, ranging from 3 months to 2 years, with pay between 60%–100% of wages, often tiered by length of service and region. For example, Shanghai uses a detailed pay scale, while Tianjin ties compensation to minimum wage. Some regions, like Beijing, also offer elder care leave—up to 10 days annually for only children—while others, like Shanghai, do not.
Terminations/Dismissals, Redundancy, Severance, and Resignations Terminating employees in China is tightly regulated and often costly due to strong worker protections. Employers can only dismiss staff under specific legal grounds—such as serious misconduct, incapacity, or operational changes—and must follow strict procedures, especially for mass layoffs. Severance is generally required unless termination is for cause or the employee declines a contract renewal on equal or better terms. Special protections apply to pregnant employees, those on medical leave, or nearing retirement. To stay compliant and avoid disputes, employers must notify labor unions where applicable, document justifications clearly, and follow local procedures precisely.
Health & Safety Employers in China must protect worker health and safety through risk reporting, training, medical exams, and proper equipment. They must ensure safe premises, respond to accidents, and disclose hazards in contracts and on-site. Duties extend to some non-workers under tort law. Regular risk assessments and insurance are mandatory, and certain groups (e.g. minors, pregnant workers) are barred from hazardous roles.
Misclassification Risk Employee misclassification—treating a worker as a contractor instead of an employee—is a high-risk issue in China. Authorities focus on the actual working relationship, not just the contract terms. Key indicators include the employer’s control over work, the worker’s economic dependence, and their integration into the business. Employers must sign written employment contracts and verify legal qualifications. Misclassification can trigger back pay, fines, unpaid taxes, social security liabilities, and double wage penalties if contracts are missing for over a month. China enforces these rules through specialized labor arbitration and courts.
Data & IP Protection China’s data protection is governed by the PIPL, CSL, and DSL, supported by a patchwork of laws, standards, and sector rules. While 2024 rules eased cross-border HR data transfers, core compliance under PIPL still applies. Non-binding guidelines are often enforced in practice. With frequent updates and overlapping rules, ongoing monitoring is critical for compliant data and IP handling.
Continuous Compliance™
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How much does it cost to hire through an EOR in China?

Three cost pillars matter when hiring employees in China compliantly:

  1. Gross salary negotiated with the employee
  2. Statutory employer costs—five social insurances and the housing fund at 27% to 44%
  3. EOR management fee—Deel charges a flat monthly fee that includes contract generation, payroll, filings, and compliance support

Below is a side-by-side snapshot of the cost to hire employees in China via your own entity versus using an Employer of Record.

Factor Your Own China Entity Deel EOR
One-off setup costs RMB 20,000 to RMB 100,000 or more, depending on the type of business entity, location, and services used. RMB 0
Ongoing annual costs (Local accountants, tax filings, audit, HR admin) TBD RMB 0
Deel EOR annual management fee N/A RMB 51,549.84 per employee
Estimated total annual cost TBD RMB 51,549.84
Time to first hire 2 - 4 months < 5 days

With Deel, you pay predictable, transparent fees—no hidden mark-ups when salaries rise. For precise budgeting, plug figures into Deel’s Employee Cost Calculator. This clarity is essential for companies planning market entry or scaling headcount in China.

Check our Employee Cost Calculator to see the full cost of hiring talent in China, including salary, taxes, pensions, and statutory fees.

Global Hiring Toolkit
EOR vs. Entity Calculator
Looking for the most cost-effective way to expand your team abroad? Discover the best option for your business with our calculator.

Which China Employer of Record should you choose?

Selecting the right EOR in China is critical for compliance, speed, and cost-effectiveness. Four criteria separate a compliant partner from a costly mistake:

  1. Entity ownership: Favor providers with wholly owned, not partner, entities. Local control is crucial for onboarding, IP protection, and compliance with Chinese labor law. It also eliminates intermediaries, reducing costs
  2. Compliance expertise: Look for in-house counsel tracking PRC labor updates. Deel’s Compliance Hub issues real-time alerts across 150+ jurisdictions to ensure you always meet local law requirements
  3. Platform breadth: Beyond hiring, you’ll want global payroll, equity, benefits, mobility, and IT asset management—Deel bundles all in one login for seamless HR operations
  4. Global coverage: Hiring talent outside China next year? Choosing an EOR provider already present in 150+ countries future-proofs your roadmap and simplifies global expansion

See also: Owned Entity vs. In-Country Partner: The Best Choice for Global Hiring

Discover how Lloyd’s List Intelligence expanded to new markets with Deel

Lloyd's List Intelligence provides business intelligence, data, and analysis on maritime trade and operations.

As a leader in a complex and regulated market, they faced challenges in expanding and managing teams across multiple locations. They explored different ways to set up entities but found it complicated, as each country had its own payroll regulations and tax requirements.

“We just didn’t have the economies of scale, time, and resources to be able to set up entities in each of those different locations. We went with Deel because they were able to provide us with everything we needed in one platform.”

Hetty Townsend, APAC People And Culture Business Partner, Lloyd's List Intelligence

Learn more

Is Deel Employer of Record a strong choice for hiring in China?

Yes—Deel is a top-rated Employer of Record for hiring employees in China, offering unmatched compliance, speed, and transparency. Deel’s wholly-owned entities across Mainland China make it easier for you to hire employees quickly while sidestepping the pain of entity setup and ongoing local compliance. With Deel, you gain a trusted G2 leader, proven global reach, and flat, predictable pricing.

With Deel EOR, you benefit from:

  • G2 leader: Rated #1 for Employer of Record services worldwide for user satisfaction and market presence
  • Wholly-owned entities in 14 Chinese provinces: Direct ownership in key cities ensures control, compliance, and faster onboarding
  • 150+ countries covered: Effortlessly scale hiring in China or anywhere your growth demands
  • Transparent, flat pricing: No hidden markups—statutory costs and management fees are clearly separated
  • Fast onboarding: Hire employees in as little as 4 days, no need for your own local entity or bank account
  • China-specific compliance: Deel handles complex social insurance and housing fund requirements, as well as PIPL data localization
  • Automatic tax and payroll filings: Deel manages PAYE, tax withholding, and electronic payslips with monthly accuracy
  • Bilingual employment contracts and local support: Contracts in Mandarin and English, with local experts guiding every step
  • IP and data protection: Deel IP Guard ensures inventions and sensitive data stay secure and compliant with China’s laws
  • Upgrade option: Start with EOR, then let Deel help you with setting up a legal entity in China as your business grows

With Deel, you skip the headaches of local entity setup and ongoing compliance with Chinese labor laws, letting you focus on building your team and business in China.

See also: More Than a Service: EOR as a Strategic Partner in Business Growth

Hire employees in China confidently with Deel Employer of Record

Ready to unlock China’s top talent without the delays and risks of establishing a legal entity in China? Deel’s Employer of Record lets you hire, onboard, and pay employees across Mainland China in days, not months. You’ll get transparent pricing, rapid onboarding, and a dedicated team that keeps you compliant with Chinese labor, payroll, and data protection laws.

Book a Deel demo today to see how you can launch in China with confidence. Experience how Deel’s platform simplifies compliance, payroll, and benefits management—plus, you’ll see why thousands of companies trust Deel as their global EOR partner for hiring employees in China.

FAQs

You can typically hire and onboard employees in as little as four business days through Deel, much faster than the 2–4 months required to set up your own legal entity in China.

No—Deel’s wholly-owned entities handle all payroll, contracts, and statutory filings, so you don’t need a local bank account or company registration.

Deel supplies bilingual (Mandarin/English) fixed-term or open-ended contracts that comply with the Chinese Labor Contract Law, including all required clauses and probation limits.

Deel calculates and withholds personal income tax and social insurance contributions monthly, filing them through China’s PAYE system to ensure compliance with Chinese payroll regulations.

Employer contributions for social insurance and housing fund total about 27% to 44% of salary, with exact rates varying by city; Deel itemizes these in your quote for transparency.

Deel enrolls employees in all mandatory benefits (five insurances and housing fund) and manages statutory leave entitlements such as annual, sick, maternity, and paternity leave.

Yes, probation is allowed— 6 months for contracts up to 3 years, with shorter limits for shorter contracts, following Chinese labor law.

Yes, employees are paid in RMB to a Chinese bank account.

Deel stores employee data on servers located within China and ensures all processing complies with the Personal Information Protection Law (PIPL).

You can set up anytime—Deel can help you transition from EOR to your own local entity, ensuring a seamless handoff and continued compliance.

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About the author

Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.

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