Date registered: July 1, 2011
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Well, I guess the employees are supposed to learn from their employers, although that's difficult when the employers don't know either. How the employers are supposed to find out? Maybe there is a secret vault somewhere, perhaps it's where they're keeping Xi Jinping? In our case though it was the SAFEA who told us to talk to the tax office about it.
We've been paying it since July in Chenghua district I can't imagine Chengdu's other districts coming up with a different policy (Sichuan Uni is just on the edge of Wuhou district I think). Here foreigners pay 11% of their base salary, made up of separate contributions for:
* Basic pension
* Basic medical
* Work-related injury
You should get a social security card and password / pin which you can use online to check contributions and account balances (although the interface is pretty terrible) and to pay for stuff directly in selected pharmacies and hospitals.
Not sure how the unemployment insurance would work for foreigners, but by far the largest portion of the contributions is for the pension. This only pays out after working here for 15 years, but they'll only issue foreign expert certificates to let you work here for 5 years! Individuals can (theoretically) claim this portion back when they leave China, but only if you sign something to say you're never coming back!
The employers contribute about 35% of basic salary and can't claim anything back. The other thing to note for staff coming back second and subsequent years is that both employer and employee must contribute for 12 months of the year — even if contracts are for a shorter period of time with no pay during the summer!
Other than the fact that they are now collecting it, not much has changed since my post at the bottom of this thread: http://www.gochengdoo.com/[...]
As well as Social Security you also pay individual income tax. The rate varies based on your salary, and is paid on overtime and other income as well as the basic salary but for a salary of 7000 rmb you'd be paying 115 rmb in IIT as well as 770 in Social Security. Of course it's in your employer's interests to under declare your base salary as well as yours so you may well be paying less than this in social security...
The short answer to your question "I want to know what it gives me" is "not a lot"
Staffordshire University run a large UK Business Management programme in Chengdu in collaboration with Chengdu University of Technology. This is a public university and the collaboration is approved by the Chinese Ministry of Education. The programme is delivered entirely in English, mostly by expat staff.
At the moment we only run the first two years of three (UK degree programmes are only three years), with students having the option to graduate with a Dip HE, to transfer to the UK for the final year of the degree or apply to transfer to a local degree programme. We're seeking approval to run the final year locally as well and expect a response from the Ministry by March.
Tuition fees are likely to go up in September, to something between 25000 - 30000 RMB per year for International students. We're waiting for the Sichuan Pricing Authority to set a figure.
Unfortunately our website (www.sucdutedu.org) is entirely in Chinese, although if you contact me by email I can send you some documentation in English about the course and would of course be happy to answer any questions, as I'm sure would a few other gochengdoo users who work here.
From an employer's point of view this is insane. We know that it is law but have no idea how it will be implemented. Sadly this is often the case with new laws. The 'consultation period' mentioned by the China Daily went entirely unpublicised until after the event and lasted only five working days.
An employee with a contracted salary of 10,000 RMB currently pays 665 RMB in income tax and so takes home 9,335 RMB. Our best guess of social security payments (same as Chinese staff but without the housing fund which foreigners won't be eligible for) puts a personal contribution of 800.70 RMB and an employer contribution of 2,244.30 RMB. Staff are now taking home only 8534.3 RMB but the employer is paying 12244.30 for this.
Maybe foreigners can withdraw their pension contibution (which is a fair chunk of the 800.7 RMB per month) if they leave China for somewhere without a bilateral social security agreement - although we don't know for sure, nor how easy it will be to apply or what documentation is required. It looks very unlikely though that the employer's pension contributions (an equally large chunk of the 2,244.30 RMB) will be withdrawable. Neither employer nor employee see any benefit from this monthly payment unless the employee works for 15 years in China and starts drawing a Chinese pension (probably the minority of staff!)
Our programme charges student tuition fees at a rate that is fixed by the government pricing authority, has remained unchanged for seven years and is not allowed to increase. Even before this regulation staff salaries are about 50% more than they were in 2005. There is simply no money left to pay this increased cost, let alone to consider raising contracted staff salaries so that take home pay remains the same and raising again to count for rampant annual inflation.
For Chinese staff many organisations underpay contributions for Chinese staff by declaring a lower income to the Social Security Bureau. Staff are complicit with this as they have to pay a lower personal contribution as well. Apart from the fact it's illegal it looks to be unworkable with foreign staff - it's simply easier to manage the payments of foreigners because there's less of us. We also have a minimum wage which is fairly high, so even if we could get away with underreporting salaries even at this minimum level contributions would be significant for all concerned.
I watch this space with interest.