How Companies Can Hire Staff and Complete Employment Formalities in China
Before hiring in China, a company should define the role, employing entity, budget, and lawful status. Onboarding covers a written employment contract, payroll, social insurance, individual income tax, the employee handbook, and access handover; foreign employees also need a work permit and work-type residence permit.
The Employing Entity and Work Location
Before publishing a vacancy, specify the lawful employing entity in China, work location, responsibilities, reporting line, contract term, and full budget. A foreign headquarters that assigns ongoing work and pays an individual in China directly may not satisfy local employment, tax, and work-permit requirements. If there is no Chinese entity, assess compliant service providers and the limits of any proposed arrangement.
Which company will sign the employment contract.
Who will pay the salary and in which currency.
Which city the employee will actually work in.
Who will direct day-to-day work and manage performance.
Whether the role involves access to clients, funds, or data.
Whether the candidate needs a Foreigner's Work Permit.
Distinguish Employees, Agency Workers, and Service Providers
Employment, labor dispatch, outsourced services, and independent contracting carry different rights and obligations; the title of a contract alone does not determine the relationship. If a company continuously controls an individual's hours, location, processes, and performance while calling that person a consultant, the written arrangement may not reflect the actual relationship. For labor dispatch and human-resources services, also verify the provider's qualifications and whether the role is eligible.
Who decides what work is done and when.
Who supplies the tools and workplace.
Who bears responsibility for business results and rework.
Whether the individual can organize their own team.
Whether payment is monthly or tied to deliverables.
Who bears responsibility for social insurance and workplace injuries.
Prepare Recruitment and Offer Documents
Create a job description and qualification criteria.
Approve salary, bonuses, benefits, and recruitment costs.
Standardize interview questions and scorecards.
Collect only the candidate information necessary for the role.
Verify education, experience, and authorization to contact references.
Issue an offer letter stating all conditions.
Prepare the contract, handbook, and onboarding checklist.
Do not ask about marriage, childbearing, illness, religion, or family matters unrelated to the role during interviews. Obtain the candidate's consent for background checks and limit their scope and retention period. Salary wording should distinguish gross from net pay, fixed from variable compensation, monthly from annual salary, and the conditions for bonuses; keep the Chinese and English versions consistent.
From Check-in to Starting Work
Verify identity, education, proof of leaving the previous employer, and other documents.
Sign a written employment contract promptly as required by law.
Confirm the role, location, salary, and probation period.
Complete social insurance, individual income tax, and payroll information.
Obtain acknowledgment of the employee handbook and confidentiality rules.
Grant system and office access according to the employee's duties.
Have the direct manager complete safety and role training.
The probation period must correspond to the employment-contract term and legal rules; salary, social insurance, and management requirements continue to apply. Asking someone to work on a trial basis for several weeks before signing a contract creates wage and employment-relationship risks. HR should hold onboarding records centrally, while business managers receive only the information they need.
Close the Loop on Payroll, Social Insurance, and Performance Each Month
Keep verifiable records of attendance, leave, and overtime.
Obtain written approval for salary changes.
Declare social insurance and individual income tax under local rules.
Show fixed pay, variable pay, and deductions on payslips.
Record facts and improvement deadlines in performance feedback.
Obtain required confirmation for role or salary changes.
Reconcile salary and expenses before departure.
HR, finance, and the business lead should separately check employee status, amounts, and payments on the payroll. Do not send the entire workforce's salary information in a group chat. State the calculation basis for bonuses, sales commissions, and reimbursements. Even if the company is under financial strain, it must not verbally suspend pay or unilaterally turn wages into a loan.
Employee handbooks and policies must be lawfully adopted and issued, with acknowledgments retained, and the Chinese version must be understandable to employees. Attendance, leave, information security, conflicts of interest, and disciplinary rules should be applied consistently, rather than located only after a dispute arises. Managers should check with HR before making written commitments so that informal benefits do not conflict with the formal contract.
Foreign Employees and Exceptions on Departure
Before a foreign candidate starts work, confirm that both the role and the individual meet work-permit conditions. The genuine employer must apply for the work permit and coordinate the work-type residence permit. An offer letter cannot guarantee approval. The work permit, employment contract, and actual role must be consistent, and the employee may not begin work before the relevant authorization is complete.
Termination, redundancy, failure to meet probation conditions, and voluntary resignation follow different procedures. Managers should collect evidence of performance, misconduct, or business changes, while HR and qualified advisers confirm notice, compensation, trade-union, and other requirements. On the employee's last day, recover accounts, seals, equipment, and client materials, and issue all documents required by law.
Differences by City, Role, and Company Stage
Minimum wages, social-insurance contribution bases, processing systems, and local interpretations are updated by city. Sales, R&D, factory, retail, executive, and remote roles need different rules for working hours, safety, confidentiality, and performance. When an employee works across cities, the contract location, social insurance, and individual income tax arrangements should not remain inconsistent over time.
A startup should keep contract, payroll, and access records from its first employee. Reconstructing historical documents after the company grows often fails to capture the real agreement. Acquisitions and joint ventures also require due diligence on existing employees, unpaid wages, social insurance, disputes, and collective arrangements.
Official Basis and Verification Date
The basic guidance on employment contracts, wages, social insurance, and employment practices refers to the labor and employment section of the Ministry of Commerce's Invest in China portal, the Labor Contract Law, and local unified registration guides, verified through 2026/8/4. Requirements for particular roles, cities, labor dispatch, termination, and foreign employees should be confirmed with the local human-resources and social-security authority, tax authority, work-permit authority, and qualified advisers.