Hiring in China means navigating a leave and benefits framework that’s partly national, partly provincial, and in some areas still actively changing. The rules for sick leave, maternity leave, and parental leave don’t all live in one place; they’re spread across national labour laws, State Council regulations, and local implementation measures that vary city by city. If you’re employing someone in Beijing, Shanghai, or anywhere else on the mainland, here’s what you’re obligated to provide.
Annual leave
China’s annual leave entitlement is based on an employee’s total cumulative work experience across all employers, not just their tenure with you. That distinction matters when you’re onboarding someone with a long work history.
How much leave are employees entitled to?
The tiers under the Regulations on Paid Annual Leave for Employees are:
- 1 to 10 years of cumulative work experience: 5 days per year
- 10 to 20 years: 10 days per year
- 20 or more years: 15 days per year
Employees in their first year of employment aren’t entitled to annual leave until they’ve completed 12 months of continuous service. For employees joining mid-year, the entitlement in that first qualifying year is prorated.
What happens to unused leave?
If an employee can’t take their annual leave due to work demands and you haven’t arranged for it to be taken, you’re required to pay 300% of the employee’s daily wage for each unused day. That figure already includes the regular salary the employee would have received, so the additional cash compensation you owe on top of normal pay is 200% per day. This makes unused leave expensive, and it’s one of the more commonly misunderstood obligations among foreign employers.
Public holidays
China observes 11 national public holidays per year. Employees are entitled to paid leave on each of these days.
The major holidays are New Year’s Day (1 day), Spring Festival (3 paid days), Qingming Festival (1 day), Labour Day (1 day), Dragon Boat Festival (1 day), Mid-Autumn Festival (1 day), and National Day (3 paid days). Spring Festival and National Day are the longest holiday periods and typically involve surrounding working days being shifted to create extended breaks. These “make-up” workdays are announced by the State Council each year and are mandatory working days, so you’ll need to track the annual holiday schedule carefully.
Sick leave (the medical treatment period)
China’s sick leave system is called the “medical treatment period.” It’s the protected period during which a sick employee can’t be dismissed, and the length of protection depends on the employee’s tenure with their current employer and total work experience.
How long is the medical treatment period?
The duration ranges from 3 months to 24 months depending on the employee’s circumstances. As a baseline, employees with fewer than 5 years at their current employer and fewer than 10 years of total work experience are entitled to a 3-month medical treatment period. Entitlements increase through several tiers, reaching up to 24 months for employees with 20 or more years of total work experience.
What do you pay during sick leave?
Sick pay during the medical treatment period is set by local governments, not the national law, so the exact rate varies by city. Generally, compensation runs between 60% and 100% of the employee’s normal wage depending on their city of employment and their length of service. The floor is the local minimum wage, meaning sick pay can’t fall below what the employee would earn at minimum wage rates. Budget for this variation when you’re employing in multiple Chinese cities.
Maternity leave
Maternity leave in China has a national floor, but most provinces have legislated significantly beyond it.
What’s the national entitlement?
The national minimum is 98 days of maternity leave, structured as 15 days before the expected birth date and 83 days after. In practice, most provinces have extended this, with provincial maternity leave entitlements ranging from 128 to 180 days, and some regions extending to close to a full year. You’ll need to check the specific rules for each province where you have employees.
Who funds maternity leave?
Maternity leave pay is funded through China’s maternity insurance fund (which is being progressively merged into the basic medical insurance fund). This means the cost of maternity pay doesn’t fall directly on you as the employer in the way it would in some other countries. The fund pays the benefit. However, your employer contributions to the social insurance system are what fund this benefit, so you can’t treat it as a zero-cost entitlement. It’s also worth noting that the merger of maternity insurance into basic medical insurance has been rolling out through 2025 and into 2026 and hasn’t been uniformly implemented across all cities.
Paternity leave
There’s no national paternity leave standard in China. The entitlement is set entirely at the provincial level, which means the number of days varies depending on where your employee is based.
Paternity leave across provinces runs from roughly 10 to 30 days. Beijing and Shanghai both provide paternity leave in the 10 to 15 day range, though you should verify the current figure for each city since provincial regulations are updated periodically. When you’re hiring across multiple provinces, you’ll be managing several different paternity leave entitlements simultaneously, which requires tracking by employee location rather than applying a single company-wide policy.
Parental leave (childcare leave)
Separate from maternity and paternity leave, many Chinese provinces now provide “childcare leave” (also translated as parental leave) for both parents of young children, not just at the time of birth.
Who qualifies and for how long?
In Beijing and Shanghai, parents of children under 3 years old are entitled to 5 days of childcare leave per year, per parent. Many other provinces provide 10 days per year. Some regions extend eligibility to parents of children under 6. The specific entitlement depends on the province, and not all provinces have enacted childcare leave provisions, so again, location is the determining factor.
This leave is in addition to standard annual leave entitlements and operates independently of maternity or paternity leave taken at the time of birth.
Housing provident fund
The Housing Provident Fund (HPF) is a mandatory benefit that applies to employees in China. As an employer, you’re required to contribute between 5% and 12% of each employee’s salary into their individual HPF account each month. You also deduct an equivalent employee contribution from their salary at the same rate.
From the employee’s perspective, the HPF is a significant benefit. The accumulated balance can be used to fund a housing purchase or mortgage repayments, and employees who leave China can withdraw their balance. The exact contribution rate within the 5% to 12% range is set by the local housing fund management authority in each city, so the rate you’re required to contribute may differ across locations. This is one more reason that payroll in China requires city-level configuration, not just national defaults.
Managing chinese leave obligations through an Employer of Record
The leave and benefits framework in China is one of the more complex you’ll encounter in the Asia-Pacific region. The combination of national floors, provincial extensions, city-specific sick pay rates, and locally-set HPF contribution rates means you can’t run a uniform policy across all your Chinese employees. Each employee’s entitlements depend on where they live, their work history, and in some cases which of several overlapping insurance fund structures applies to them.
Working through an Employer of Record (EOR) removes the administrative burden of tracking and applying these location-specific rules. The EOR acts as the legal employer in China, running local payroll, making the correct social insurance and HPF contributions at city-specific rates, and applying the right leave entitlements for each employee’s province. If you’re scaling a team across several Chinese cities, EOR services are often a faster and lower-risk route than establishing your own legal entities in each location.
Book a demo to see how RemotePass manages leave and benefits compliance across Chinese cities.
Frequently asked questions
Does china’s annual leave entitlement reset based on years with the current employer?
No. Annual leave in China is based on the employee’s total cumulative work experience across all employers throughout their career, not just their tenure with you. An employee who joins you with 12 years of prior work experience is already entitled to 10 days of annual leave per year from day one.
Can you ask an employee to carry over unused annual leave?
You can arrange for leave to be taken in the following year under certain conditions, but if the employee’s annual leave isn’t used within the year and you haven’t arranged for it to be carried over or used by agreement, you’ll owe the 200% additional compensation on top of the employee’s normal salary for each unused day. The safest approach is proactive leave planning and documented agreements for any carry-over arrangements.
Is the employer directly responsible for paying maternity leave?
In most cases, no. Maternity leave pay is funded through the social insurance system, specifically the maternity insurance fund (currently being merged into basic medical insurance in many cities). You fund the benefit through your social insurance contributions, but the payment to the employee comes from the fund rather than your payroll. The exact process differs between cities depending on where the merger has been implemented.
What happens if an employee is on a medical treatment period and doesn’t recover?
If an employee’s illness or injury continues beyond their full medical treatment period and they’re still unable to perform their role, you can initiate termination, but you must provide advance notice or pay in lieu and the relevant statutory severance. The medical treatment period is a protection against dismissal during sickness, not a guarantee of indefinite employment. Once it expires, the standard termination rules under the Labour Contract Law apply.
