Social Insurance for Foreign Employees in China: Who Pays, and Who Can Be Exempt
Quick answer: Foreign nationals working for a company in China must be enrolled in Chinese social insurance, just like Chinese staff, and this has applied in Shanghai since August 2021. The only exemptions come from social security agreements, which China has in force with 11 countries, including Germany, Japan and South Korea. French employees still contribute in full, because the France–China agreement signed in 2016 is not yet in force.
Last updated: November 2026
Social insurance is often the largest cost on top of a foreign employee's salary. Knowing whether an exemption applies, and claiming it correctly from the start, can save significant amounts for both the employer and the employee.
This guide explains how social insurance for foreigners in China works: which insurances apply, which countries have agreements with China, how the German exemption works and what happens to contributions when an employee leaves.
The Basic Rule
Since 15 October 2011, foreign nationals legally employed in China must be enrolled in the five social insurances:
Pension insurance.
Medical insurance.
Unemployment insurance.
Work injury insurance.
Maternity insurance, now combined with medical insurance in most cities.
Employer and employee both contribute, based on the employee's salary within the city's minimum and maximum contribution bases. Whether foreign employees join the housing fund depends on the city. See China Social Insurance: What Employers Need to Know.
Shanghai used to treat pension, medical and unemployment insurance as optional for foreigners. Since 15 August 2021, enrolment there has been mandatory as well.
Countries With Agreements in Force
China has social security agreements in force with 11 countries: Germany, South Korea, Denmark, Canada, Finland, Switzerland, the Netherlands, Spain, Luxembourg, Japan and Serbia. Most cover pension and unemployment insurance, some cover pension only, and they usually apply to employees seconded from the home country for a limited period.
An exemption is not automatic. The employer must give the local social insurance bureau the original certificate of coverage from the home country, and the bureau checks it before the exemption applies.
Germany: The Most Common Exemption for Our Clients
Item | China–Germany agreement |
Insurances exempted | Pension and unemployment |
Who qualifies | Employees seconded by a German employer to work in China |
Period | Up to 48 months, longer only by special agreement between the German and Chinese authorities |
Evidence | A certificate of coverage from the German insurance authority |
Medical, work injury and maternity insurance are still payable in China. Apply to the local social insurance bureau before contributions start, because backdated claims are much harder.
France: Signed, but Not Yet in Force
France and China signed a social security agreement in October 2016, followed by an administrative arrangement in 2019, but it has still not entered into force. Until it does, French employees in China contribute in full to Chinese social insurance, and many also keep contributing in France voluntarily. Employers should budget for both.
Hong Kong, Macau and Taiwan Residents
Residents of Hong Kong, Macau and Taiwan working in mainland China must also join social insurance. Those who still take part in their home region's scheme can show proof of this and be excused from pension and unemployment insurance on the mainland.
Leaving China: Can Contributions Be Refunded?
A foreign employee who leaves China before qualifying for a Chinese pension can keep their account open, or end it in writing and receive a lump sum of the balance in their personal pension account. The employer's contributions to the pooled fund are not refunded. It is much easier to apply before the employee leaves China.
What Employers Should Do
Check the employee's nationality and employment set-up before the first payroll.
Obtain the home-country certificate of coverage early, where an agreement applies.
File the exemption with the local bureau before contributions start.
Budget for full contributions where no exemption applies.
Help departing employees apply for their lump sum before they leave.
Social Insurance for Foreigners in China at a Glance
Item | What applies |
Who must join | All foreign nationals legally employed in China |
Insurances | Pension, medical, unemployment, work injury and maternity |
Shanghai | Mandatory since 15 August 2021 |
Exemptions | Only under agreements in force with 11 countries |
Germany | Pension and unemployment exempt for secondees, up to 48 months |
France | Agreement signed in 2016, not yet in force |
Leaving China | Lump sum from the personal pension account on request |
Our China cloud payroll service handles social insurance enrolment and monthly contributions for foreign and local employees alike, alongside the individual income tax withholding.
Frequently Asked Questions
Do employees from Hong Kong, Macau and Taiwan have to contribute?
Yes. Residents of Hong Kong, Macau and Taiwan working in mainland China must join social insurance. Those who still take part in their home region's scheme can show proof of this and be excused from pension and unemployment insurance on the mainland.
What if the employee's country has no agreement with China?
Contributions are payable in full. New agreements are added over time, so check the current position before the employee starts.
Can a foreign employee opt out of social insurance?
No. Contributions are mandatory, and an agreement between employer and employee to skip them is not valid.
Does an exemption cover medical insurance?
Usually not. Most agreements, including Germany's, cover pension and unemployment insurance only, so medical, work injury and maternity insurance remain payable in China.
Can contributions be refunded when an employee leaves China?
Partly. The employee can end their account in writing and receive a lump sum of the balance in their personal pension account. The employer's contributions to the pooled fund are not refunded.
Related Reading
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About Woodburn Accountants & Advisors
Woodburn Accountants & Advisors helps international businesses set up and run companies in mainland China and Hong Kong. With more than 30 years' experience and offices in Shanghai and Hong Kong, our team of chartered company secretaries, certified public accountants and tax specialists has guided hundreds of foreign companies, from first-time market entrants to established multinationals, through company registration, accounting, tax, payroll and annual compliance. We combine large-firm expertise with boutique responsiveness.
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