Payroll Accounting in China
Payroll accounting in China means the complex calculations of wages and salaries, social insurances and individual income tax. Compared to payroll accounting in Western Europe or the US there is a much higher workload for the accounting department.
For subsidiaries and representative offices of international companies in China, we take care of the complete payroll accounting including the payment of the individual income tax.
Chinese Payroll Accounting differs from Germany, Western Europe or the US
1st example: Companies are responsible for withholding the social insurances and housing funds from their employees’ salary. Also, for each employee, a social insurance account and housing fund account must be maintained. Companies need to create, close and transfer the accounts whenever an employee joins or leaves the company. The basis of the social insurance and housing fund change every year and therefore companies need to maintain the statistics in the corresponding systems timely and correctly.
2nd example: The IIT (individual income tax) of employees is a big topic: not only do companies need to declare the employee’s IIT on a monthly basis correctly, but they also need to do the yearly declaration for employees whose annual income exceeds 120,000 RMB. For employees who are not Chinese citizens, the IIT calculation is even more complicated.
3rd example: Labor dispatching is very popular in big cities like Shanghai, for example through the agencies Fesco and CIIC. As a new form of using labor, labor dispatching brings issues to foreign companies in terms of accounting, tax and legal.
Why is it so important to make sure your payroll accounting in China is in good hands?
For every company the calculation of wages, salaries and taxes is a topic which should only be handled by employees or external service providers that are trustworthy. Even more so in China, where these calculations are far more complex and hard to understand. In China foreign companies have a higher stress in strictly following the labor law, tax law and other regulations. Therefore, the outsourcing of the payroll accounting in China can be safer. This can also be a way to prevent distrust and conflicts within the company.
Of course, the company faces unexpected losses if the wage of an employee is calculated too high. But also vice versa, paying an important employee less than he should receive can lead to serious trust issues. Even if the missing share is paid later, such incidents can highly demotivate this employee to work efficiently. With the outsourcing of the payroll accounting those risks are minimized.
In China, companies can enjoy a 2% return of individual income tax that a company has paid from its own account. To enjoy this policy, it is recommended for companies to pay the payroll and individual income tax from the company’s account while maintaining a correct and consistent payroll acounting, instead of paying those taxes through a labor company’s account.
What are the advantages of the outsourcing of the payroll accounting?
- you don’t have to look for a Chinese payroll accountant and worry about motivation and supervision
- you don’t have to pay for recruiting, wages and quality management.
- you prevent your employees from abusing their power of adjusting their wages or the salaries of their friends and colleagues. This way you prevent conflicts within the company as well.
- you have complete control and transparency over your business in China.
- as a contact person you will get a qualified Chinese accountant who speaks English fluently.
- you always have access to our lawyers, IT-specialists and German consultants.
- all of our employees stick to the Artax Rufil Corporate principles.
- additional security due to the appliance of antivirus and antispy software, regular training for our employees and further security standards.
- we are always loyal to our clients and partners.
- long term thinking and long-term business relationships in China.
- adoption of liability regarding to our accountancy contracts as well as a liability insurance.
Reasons to work with Artax Rufil Consulting in China
- we are a quality service and customer oriented company
- all of our employees stick to our corporate principles
- we are a German company and adhere to German virtues
- we work in China since 2004
- through our services and performances we support international companies in China and generate that way a higher quality of life for our clients, employees and investors
- we have access to a well functioning network of experts in several business areas in China
Our service package “Payroll Accounting in China” contains the following services:
- preparation for disbursement of wages and salaries (via bank transfer);
- calculation and bank transfer of social insurance and housing funds of your employees (monthly);
- social insurance and housing fund accounts management of your employees
- social insurance and housing fund adjustments and reports (annually)
- calculation and bank transfer of income tax of your employees (monthly);
- individual income tax return (annually for individuals with an annual income of over 12,000 RMB)
- keeping the staff files (monthly);
Our clients of Payroll Accountancy in China often ask us for the following services as well:
- Accounting Outsourcing in China
- Tax Consultation in China
- Legal Consultation in China
- Financial Reporting in China
- Internal Audit in China
- Company Set-up in China
10 reasons to work with Artax Rufil Consulting
- Quality: Our tax consultants and all other employees maintain a client, service and quality oriented approach.
- Loyalty: Our loyalty is always to our clients.
- Transparency: We ensure that our clients always maintain an overview of their Chinese business.
- German Work Ethic: The owners and directors of our company are German. In our work, we place great emphasis on German values.
- Highly qualified staff: In our office work professional chinese tax consultants, accountants, auditors, lawyers and corporate consultants. Our working languages are English, German, Chinese and Russian.
- Experience: We have been supporting our clients in China since 2004.
- Security, Responsibility, Reliability: When our clients conclude an accounting contract with us, we take the responsibility and the reliability for their books.
- What does Quality in China cost: If the service is outsourced to Artax Rufil Consulting, you will save the costs of recruiting, wage and quality control.
- Long term Approach and Continuity: We believe in long term relationships with our employees, clients and suppliers.
- Network: We are part of a competent network of international partner companies in China and we would be delighted to provide you these contacts.
In our office in Shanghai work highly qualified accountants, auditors, finance experts (IFRS, US-GAAP, HGB, Chinese GAAP), tax consultants, experts and programmers for automation, accounting software and IT solutions as well as international management consultants. Our working languages are English, Russian, Chinese and German.