Planning to hire employees in China? Here’s a quick guide

China has a strong infrastructure and a large and highly educated workforce. When you hire in China, you get access to a huge talent pool and stand to improve the cost-effectiveness of your recruitment. But, as in any country, you need to understand your obligations as an employer to stay on the right side of local labor laws.

If your organization is interested in engaging talent in China, take a look at the guide below. Here, we explain methods to engage talent, legal considerations, and how Payoneer Workforce Management can simplify the process.

How to hire in China

American companies hiring in China have three key options. They can set up a legal entity in China, hire contractors in China, or use an Employer of Record. Let’s take a look at the pros and cons of each approach.

1) Set up a legal entity in China

To set up a legal entity in China, you need to register your business there. This is an excellent option if you plan to establish a long-term presence in the country. It means you can hire Chinese nationals directly.

However, this option may not be right for your organization if you don’t plan to maintain a Chinese base for years to come. It’s a time-consuming and expensive process. And you’ll also likely need a specialized team, with an understanding of Chinese labor law, to help you meet your obligations as an employer.

Setting up a legal entity is a huge undertaking, and it’s simply not suited to companies looking for fast or flexible hiring solutions in China.

2) Hire contractors in China

Are you hiring in China for a short-term project? Then, hiring contractors in China is a logical option. This approach allows you to tap into the Chinese talent pool without setting up a legal entity.

Any contractors your company hires in China will work for a fixed period and won’t enjoy the same benefits as employees. But you have to be careful to classify workers correctly.

Misclassifying an employee as a contractor can lead to severe fines and penalties. You may have to back pay employee benefits, and the government may even ban your business from the country.

3) Use a workforce management platform

One may typically look for a local EOR to engage international workers, like an Employer of Record in China; however, this model may not be applicable in China, so you can use a workforce management platform instead.

A workforce management platform, like Payoneer Workforce Management, is a third-party entity that employs local workers on your behalf so you don’t have to set up a legal entity.

When you partner with them, you take responsibility for managing the employee’s day-to-day work, while they help manage the onboarding process, payroll, taxes, and statutory benefits.

This approach helps you to reduce risk and manage your legal obligations. It simplifies the international talent onboarding process so you can focus on getting the most from local talent.

Learn more about working with an EOR in China.

Where to find employees in China

When looking to hire in China, you can find employees in a couple of different ways. You can use job boards, work with a local recruitment agency, or partner with a workforce management platform.

Popular job boards in China

Using job boards, you can post a job listing online and start receiving applications in minutes. Popular places to advertise jobs in China include:

• Zhaopin
• 51job
• Zhipin
• Liepin

Job boards are often very affordable, but you have to manage all aspects of the recruitment process yourself.  

Work with local recruitment agencies

Another option is to work with a recruitment agency in China.

These agencies can bridge cultural and language barriers, helping you advertise roles in a way that appeals to Chinese workers. Agencies also typically have an existing talent pool, which can speed up the hiring process.

Just bear in mind that recruiters typically charge high fees for sourcing and screening candidates.

Support of a workforce management platform

Use a workforce management platform when you engage talent in China so that your business can focus and get control over recruitment and candidate selection.

For instance, Payoneer Workforce Management may help manage the administrative and legal aspects of employment. They offer assistance to prepare employee contracts, provide support with onboarding, payroll, and statutory benefits.

Onboarding employees in China

When you engage talent in China, you want to ensure a smooth and compliant onboarding process. Here’s what you need to do:

• Extend an offer and negotiate salary.
• Gather essential documents, including employee ID, proof of address, and education/employment certificates.
• Conduct background checks.
• Draw up an employment contract.
• Register the employee with the social security.
• Enroll your new employee in payroll and benefits
• Provide bilingual induction and training materials.
• Provide cultural guidance to help local talent understand workplace norms and communication styles.
• Make introductions to the team, assigning an onboarding buddy or support contact.
• Set up the devices and workplace software your employee will be using
• Establish goals and expectations, clearly outlining the employee’s responsibilities, performance objectives, and success metrics.

Key employment laws and requirements in China

American companies hiring in China need to abide by local labor laws. Here’s a summary of the employment practices in China you need to know.  

Employment contracts

When you engage talent in China, an employment contract has to be in writing and signed by both employer and employee.

Typically, an employer will initially onboard an employee on a fixed-term contract. However, you can only offer an employee a maximum of 2 consecutive fixed-term contracts before you’re required to provide an open-ended contract.

A contract has to include the following:

• The contract duration
• A description of the work undertaken
• A description of labor protection and labor conditions
• The employee’s remuneration
• Conditions for contract termination
• Liabilities for contract violations
• Read more about employment laws in China.

You can also add additional clauses as long as both the employer and the employee agree.

Employee benefits

When you engage employees in China, you need to offer statutory benefits, including the following:

• Sick leave: The amount of sick leave and sick leave pay in China varies by region and according to the length of time an employee has worked in total (at all jobs) and for their current company.
• Maternity leave: Female employees are entitled to a minimum of 98 days of maternity leave. In some regions, additional maternity leave is granted as standard.
• Bonus payments: Most companies provide a yearly bonus, often equivalent to 1 month’s salary, before or around the Chinese New Year.
• Pension/social security: Employers in China contribute around 20% of an employee’s salary to social security, up to a maximum of 3 times the average monthly wage.

Working hours and holidays

Employees in China typically work 8 hours per day and 40 hours per week. They should work no more than 44 hours per week on average.

Employees are entitled to at least 1 day off per week. They are also entitled to 28 public holidays each year, with several of these holidays lasting multiple days.

Employees who have worked for more than 1 year and less than 10 years (with any employer) are entitled to 5 days’ paid vacation. Those who have worked for 10 to 20 years are entitled to 10 days’ paid vacation. Those who have worked for more than 20 years are entitled to 15 days’ paid vacation.

Tax obligations

Employers have to withhold employee taxes in China. They are also responsible for withholding and contributing to the social security.

Income tax

Income tax in China is charged at a progressive rate. Tax bands in 2025 are as follows:

Annual income (in CNY)	Tax rate
0 to 36,000	3%
36,000 to 144,000	10%
144,000 to 300,000	20%
300,000 to 420,000	25%
420,000 to 660,000	30%
660,000 to 960,000	35%
960,000+	45%

Social security

Social security contributions vary by region, and foreign employees must make contributions too.

Termination and severance

The standard notice period in China is 30 days. However, an employer and employee can agree to a longer notice period, adding this stipulation to the employment contract.

If an employer terminates an employment contract without due cause, the employee is entitled to statutory severance pay. This is roughly equivalent to 1 month’s salary for every working year.

Explore Payoneer Workforce Management in China

Hiring practices in China vary from region to region, making it a particularly tricky landscape to navigate. You need to meet your obligations in terms of employee contracts, payroll, statutory benefits, and more, with regional differences taken into account.

An employer also has to decide how they want to engage talent in China, whether that’s by setting up a legal entity, by hiring contractors, or by partnering with a workforce management platform.

With Payoneer Workforce Management, engaging employees in China is fast, flexible, and straightforward. We help you take care of the most complex tasks and comply with local labor laws. We give you the support you need to engage independent contractors and full-time employees in 160+ countries, without setting up a local legal entity.

Our unified platform allows you to:

• Onboard local talent quickly and compliantly without a local entity
• Run global payroll securely in a few clicks
• Manage taxes, benefits, timesheets, and more

From onboarding in days to multi-currency payroll, Payoneer Workforce Management supports your need to onboard, pay, and manage a global workforce.

Request a demo today.

FAQs

1) What are the options for American companies hiring in China?

When you engage employees in China, you can choose from three main options:

• Set up a local legal entity: This allows you to hire in China directly, but it’s a time-consuming, inflexible, and costly process.
• Hire contractors: This approach is suitable for limited-scope projects, but misclassifying workers can result in substantial fines and penalties.
• Work with a workforce management platform: Payoneer Workforce Management acts as the local legal entity and employs workers on your behalf.

2) What is the 996 rule in China?

The “996” rule refers to a work culture in China where employees are required to work from 9:00 am to 9:00 pm, 6 days per week.

This may go against Chinese labor law, which states that employees are only allowed to work up to 44 hours per week. However, the law has not been well-enforced.