A China payroll service is for a company that already employs people in China and wants help running pay correctly. The provider can calculate pay, prepare reports and handle agreed filing tasks. Your company still makes the employment decisions and must check what was paid and filed.
If you do not have a Chinese employing entity, see the short EOR distinction below. The first question in that situation is who will employ the worker, not which spreadsheet will calculate salary.
What can a China payroll provider do?
The scope is set by the service agreement. A provider may collect approved pay changes, calculate gross-to-net pay, prepare payslips, help administer individual income tax (IIT) withholding, support social-insurance filings and prepare payment instructions. Some providers submit returns or arrange salary payments; others only send calculations for your team to act on. Ask which tasks are included, whose accounts are used and who confirms completion.
Payroll processing does not by itself make the provider the employer. The Labor Contract Law places employment obligations on the employing entity. If your company signs the contracts and manages the staff, it needs to approve changes, fund the payments and keep oversight of the records. Our hiring employees in China guide covers the wider employment setup.
What information does the provider need at the start?
Give the provider the employing company's details, each worker's work city, start date, contract terms and agreed pay structure. It will also need the employee and payment information required for payroll, tax and social-insurance administration. Agree a secure way to transfer that information and who may approve changes.
Before the first run, ask the provider to confirm which local social-insurance rules and contribution bases apply. The central government's guide for people working in China describes contributions by reference to local standards; one headline rate cannot describe every city and employee situation. Bonuses, allowances, deductions and a mid-month start or exit should be discussed before the calculation is final.
What happens in a normal pay cycle?
| Step | Your company provides or approves | Provider delivers if in scope |
|---|---|---|
| Inputs | New hires, exits, salary changes, approved bonuses, leave and other pay changes | A list of missing or unclear inputs |
| Calculation | Check the draft against contracts and approved changes | Gross pay, employee deductions, IIT withholding, net pay and employer-cost calculation |
| Payment | Approve and fund salary payments | Payslips, payment file or instructions, or payment execution if agreed |
| Filing and close | Check that agreed filings and payments were completed | Filing confirmations, contribution records and a correction log |
Treat this as a handoff to agree with your provider, not a claim that every service package includes every line. A useful payroll register should let you trace each employee from approved gross pay to net pay, with the employer's costs shown separately. Ask for a sample before signing.
China's individual income tax withholding rules require the withholding agent to report payments, deductions and tax withheld. The Social Insurance Law requires employers and employees to pay applicable social-insurance contributions. Whether the provider prepares data, submits a filing or pays on the company's behalf should be written down rather than assumed.
What should you check after payroll is run?
Check the payroll register against the approved changes, confirm the amount actually paid to employees and reconcile the amounts due for tax and social insurance. Keep the payslips, filing acknowledgements and payment records your contract calls for. If a worker's pay was corrected, ask which period was changed and whether a revised filing or payment is needed.
A brief monthly exception report is often more useful than a large spreadsheet. It should flag missing employee details, unexplained differences from last month and tasks waiting for the employer's decision. Agree who answers employee questions and who responds if a tax or social-insurance authority queries a filing.
Payroll provider or employer of record?
With payroll outsourcing, your Chinese company employs the worker and a service provider handles agreed administration. An employer of record (EOR) proposal is aimed at a different question: hiring when your overseas business has no employing entity in China. “EOR” is a commercial description, so ask which local entity signs the employment contract and what legal arrangement actually supports the work. If that arrangement is labour dispatch, Ministry of Human Resources and Social Security guidance explains the restricted roles and the 10% limit.
A payroll quote and an EOR quote are therefore not interchangeable. If you are deciding whether to open an entity, start with our China company registration guide and monthly bookkeeping guide.
What should you ask before choosing a provider?
Ask for a written scope and sample monthly output. Confirm who collects the inputs, who approves calculations, who sends pay, who files IIT and social-insurance information, and what proof you will receive. Ask how corrections, employee departures, data access and authority notices are handled. Compare total employer cost and provider fees separately; a single monthly figure hides the handoff that will matter once your team grows.
Official sources
- Ministry of Human Resources and Social Security: Labor Contract Law
- State Taxation Administration: individual income tax withholding and reporting rules
- State Taxation Administration: Social Insurance Law
- China government guide: social insurance for people working in China
- Ministry of Human Resources and Social Security: labour dispatch roles and 10% limit
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