Payroll system is one of the most important things you'll do as a business owner. Benefiting from this system is literally the reason most of your employees will show up to work each day. Doing payroll is much more complicated than just writing out a check to each employee every week or two. Numerous state laws come into play and dictate how you must calculate the employees’ pay and any overtime required, make any necessary deductions from paychecks, and get the pay into the workers’ hands.
Which Workers Are on Your Payroll?
As a part of the initial setup of your payroll, you’ll need to determine which of your workers are “employees” who must receive a paycheck, and perhaps more importantly, whose paychecks are subject to payroll taxes.
Each state law imposing a payroll tax has its own definition of the taxable workers. However, as a practical matter, the basic governing standards is whether an individual who performs services for you meets the definition of “employee” under the common-law and civil law rules. Under the common-law and civil law rules, your workers are employees if you have the right to direct and control not only the results of the work, but also the details of when, where, and how their work is done.
What Is the Payroll System in China?
In China, employer needs to pay compensation to employees in monetary form. There is a minimum salary guarantee policy. Except Tibet, there is different minimum salary level in different municipalities and provinces according to their actual situation.
In China, most companies participate in employee social security plans, organized by the government authorities in accordance with relevant regulations. According to these relevant regulations, premium and welfare benefit contributions should be paid by the employer to the social welfare authorities and are calculated based on percentages of the total salary of employees, subject to a certain ceiling.
China has some unique rules regarding employment, for example, foreign nationals must pay local Tax and Health Insurance and also carry their own Health Insurance. Additionally employers of Chinese nationals must register and make contributions, which vary by region, to China’s social insurance system, known as the “Five social insurances and one housing fund”. The Five social insurances comprise a pension fund, medical insurance, industrial injury insurance, unemployment insurance and maternity insurance.
In China, employee has responsibility to pay Individual Income Tax ("IIT"). But the employer should withhold IIT for employees every month and pay to the tax authorities. Taxable income is the salary less deductible expenses (RMB 3500 currently) plus employee portion of social benefits.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu , Shenzhen, China.
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