Due to a recent change in the law, New Horizons will be able to credit certain payroll costs back to clients in China
New Horizons Global Partners, China’s leading PEO that has assisted many companies to hire and retain employees in the Chinese workforce without having to go through the ordeal of establishing a separate legal entity, has recently announced its plan to provide a payroll credit to clients with staff in China who are paid through the New Horizons’ payroll platform.
Due to a recent change in Chinese payroll law and in an effort to reduce labor burden on enterprises during the COVID-19 pandemic, the Chinese government has decreased the required social security contribution from February 2020 to June 2020.
The government is attempting to implement policies that ease the financial burden on companies during this uncertain time.
By decreasing the required social security contribution for this six-month window, the government is able to reduce employer wage costs. The government is also taking this action so that companies will be able to retain more workers by paying less out of pocket for local employees.
The government will provide these credits to New Horizons. In turn, New Horizons can reimburse clients for costs that were already paid in.
New Horizons acknowledges that the government action was intended to assist companies that employ people in China and is dedicated to ensuring this important goal is carried out.
The changes include:
- 123.9 billion yuan of social contribution have already been exempted in February 2020
- 09 billion yuan of social contributions have been exempted in March
- 81% of beneficiaries are small and medium enterprises
Social Security Reductions
Region-specific social security reduction details include:
All categories are reduced in half.
Other Cities Except Beijing
The following adjustments are being made in other cities excluding Beijing:
- Pension obligation is reduced to zero
- Unemployment insurance is reduced to zero
- Work-injury insurance is reduced to zero
- Medical and maternity insurance are reduced to half
Housing funds remain the same.
Social Contribution Rates and Overall Labor Burden Changes
Region-specific changes to social contribution rates and overall labor burdens include:
The social contribution rate is down to 26% from 40%. The overall burden is reduced to 90%.
The social contribution rate is down to 12.25% from 33.76%. The overall burden is reduced to 84%.
The social contribution rate is down to 16.35% from31%. The overall burden is reduced to 89%.
The social contribution rate is reduced to 15.45% from 29.26%. The overall burden is reduced to 89%.
New Horizons knows that it is especially during this important time to have the right support for your business so that you can make important decisions with the most up-to-date information.
The COVID-19 emergency has had a global impact, and flexibility is key in making prompt changes in your workforce when needed.
For more information on our services and how we can assist you through the COVID-19 epidemic, contact us.
About New Horizons Global Partners
New Horizons Global Partners helps companies quickly expand internationally to targeted markets in China, Asia and other countries.
We have global offices to assist clients expand their horizons without the expense or logistical challenges of setting up local branch offices. Clients are able to hire employees throughout our global network of talent without having to burden themselves with complex legal, tax or human resources issues.
Our specially-qualified team of business experts with a robust understanding of multiple industries help you to test new markets and expand your business’ reach. We develop a customized strategy to help make your expansion a success and pride ourselves on our commitment to client satisfaction.