Signing an Employment Contract in China: Essential Terms, Probation, Pay, and Leaving

The Contracting Employer Must Match the Permit Sponsor

The employer named in the contract should correspond to the entity that actually pays and manages you and applies for your work permit. A group brand, recruitment agency, dispatch company, and China-incorporated company may be different legal entities. Before signing, check the company's legal name, Unified Social Credit Identifier, registered address, work location, and company seal. Confirm which entity is responsible for salary, social insurance, individual income tax, and the work permit.

• The employer named in the contract matches the entity applying for the work permit.

• The job title matches the actual duties.

• The work location covers both the regular office and any long-term assignment location.

• The salary, currency, payday, and whether the amount is before or after tax are stated clearly.

• The contract clearly specifies which version prevails if the Chinese and English texts conflict.

Terms the Law Requires in the Contract

Article Seventeen of the Labor Contract Law lists the mandatory terms: basic information about both parties; the contract term; job duties and location; working hours, rest days, and leave; remuneration; social insurance; labor protection; and protection against occupational hazards. Probation, training, confidentiality, supplementary insurance, and benefits may be agreed separately. Once both parties have signed or affixed their seals, each should retain a copy of the contract.

For foreign employees, the contract term, position, and location must also support the work permit application. The permit authority imposes additional requirements on the duration and supporting documents for employing foreigners. A lawful employment contract does not guarantee approval of a work permit; both sets of requirements must be met.

Check Every Item Before Signing

1. Whether the contract is fixed-term, open-ended, or for the completion of a specific task.

2. The start and end dates of probation, assessment criteria, and probationary pay.

3. How base salary, bonuses, allowances, equity, and reimbursements are calculated and paid.

4. The basis for standard, flexible, or special working hours, and the approval and compensation of overtime.

5. Annual leave, sick leave, statutory holidays, and additional company leave.

6. The start and end of social insurance, private insurance, and other benefits.

7. Training service periods, confidentiality, intellectual property, and non-compete restrictions.

8. Termination, notice, handover, severance, and dispute resolution.

If recruitment emails, the offer letter, or verbal promises are important to you, include them in the contract or an appendix. Make sure the signature pages and appendices are complete, do not sign blank provisions, and do not leave the only original with the company. For electronic signatures, retain the final version, signing record, and certificate.

Probation Is Subject to Clear Maximum Periods

For a contract of at least three months but less than one year, probation may not exceed one month; for a contract of at least one year but less than three years, it may not exceed two months; and for a fixed-term contract of at least three years or an open-ended contract, it may not exceed six months. The same employer and employee may agree on probation only once. A contract for the completion of a specific task, or one lasting less than three months, may not include probation.

• Probation forms part of the employment contract term.

• If the parties sign a contract covering only probation, that period is treated as the term of the employment contract.

• Probationary pay may not be less than the lowest rate for the same position or 80% of the contract salary, and may not be below the local minimum wage.

• The hiring criteria should be stated before or when employment begins and must be verifiable.

• Termination during probation still requires a statutory ground, and the employer must explain the reason.

Keep Evidence of Performance After You Start

1. Keep each month's payslip, bank credit, and individual income tax records.

2. Check your social insurance registration and that your private insurance has taken effect.

3. Retain the job description, targets, performance feedback, and work product.

4. Confirm overtime, leave, transfers, and pay changes in writing.

5. When company policies are updated, keep the version you received and acknowledged.

6. Put the expiry dates of your work permit, residence permit, and contract in the same calendar.

A change in the company name, person in charge, or investor generally does not affect performance of the employment contract. Material changes such as a transfer, pay cut, or change of work location should be agreed by both parties in writing. If the employer, position, or region stated on the permit also changes, the corresponding administrative procedures must be completed.

Resignation, Dismissal, and Non-compete Restrictions

An employee may generally terminate an employment contract by giving thirty days' written notice, or three days' notice during probation. An employer must have a statutory ground and follow the required procedure to terminate a contract. Merely stating that an employee 'failed to meet the hiring criteria' does not automatically establish a valid ground; the employer must explain and prove it. If a dispute arises, keep the termination notice, hiring criteria, assessments, warnings, and communications.

Non-compete restrictions apply to senior managers, senior technical personnel, and others with confidentiality obligations. The post-employment restriction may not exceed two years, and compensation should be paid monthly. Outside training service periods and non-compete restrictions, the law strictly limits when an employee may be required to pay liquidated damages. The specific compensation and any dispute must be assessed against the contract and local rules.

Foreign Employees Must Also Deal with Immigration Documents

Chinese labor law applies to foreign employees who establish an employment relationship in China, but leaving a job also triggers the cancellation or amendment of the work permit, action on the work-type residence permit, and settlement of individual income tax and social insurance. Continuation of the employment contract does not automatically extend a permit; an expired permit may also prevent continued performance on the original terms.

For unpaid wages, unlawful dismissal, or a contract dispute, consult the local human resources and social security authority about labor inspection, mediation, or arbitration. For administrative permit matters, also confirm the position with the work permit authority and the public security exit-entry administration. Do not give the organization your original passport, personal online banking access, or verification codes as security for performance.

Official Basis and Verification Date

The rules on mandatory terms, probation, pay, termination by notice, and non-compete restrictions are based on the Labor Contract Law of the People's Republic of China. The burden of proof in probationary termination is informed by a published response from Shanghai's human resources and social security authority. The information was verified on 4/8/2026. Local minimum wages, special working-hour rules, and case-handling procedures may change; check with the human resources and social security authority where you work before signing or handling a dispute.