End-to-end monthly payroll workflow for China-based employers: compute 五险一金 (social insurance + housing fund) contribution bases, withhold individual income tax (IIT) using the cumulative withholding method (《个人所得税扣缴申报管理办法》公告2018年第61号), and file both the 社保缴费申报 and the 个人所得税扣缴申报表 through the natural-person e-tax bureau (自然人电子税务局) by the 15th of the following month.
Collect all employee and employer registration details required before any calculation can begin. This includes the employer's unified social credit code (统一社会信用代码), the social insurance registration number, the housing-fund (公积金) deposit registration number, and for each employee: ID number, household registration type (户籍类型), social insurance enrolment number, and the prior-year average monthly salary used to set this year's contribution base. Confirm the 参保地 (city of enrolment), because contribution rates, base caps, and adjustment dates differ materially by city.
Determine and lock the monthly contribution base for each employee for the current contribution year. The base equals the employee's prior-year average monthly salary, clamped between the local lower limit (社平工资 × 60%) and upper limit (社平工资 × 300%). Shanghai 2024.7–2025.6 illustrative limits: lower ¥7,310/month, upper ¥36,549/month. New joiners use their starting-month salary as the initial base. Bases are fixed for the full contribution year (typically July–June) and are not adjusted mid-year unless an employee joins or leaves.
Apply the confirmed 参保地 rates to each employee's locked contribution base to compute the employer and employee portions of all five insurances plus housing fund. For Shanghai (2024.7–2025.6 illustrative): employer ≈ 养老16% + 医疗9.5% + 失业0.5% + 工伤0.16–1.52% + 公积金7%; employee ≈ 养老8% + 医疗2% + 失业0.5% + 公积金7%. The employee portions are withheld from gross salary and reduce the IIT taxable base as 专项扣除 in the next phase.
Compute each employee's monthly IIT withholding using the cumulative withholding method mandated by 《个人所得税扣缴申报管理办法（试行）》(国家税务总局公告2018年第61号). The formula accumulates year-to-date gross salary, deducts cumulative basic allowance (¥5,000/month × months employed), cumulative 专项扣除 (employee's five-insurance + housing-fund portions), cumulative 专项附加扣除 (seven categories confirmed by employee in the 个税APP), and cumulative other deductions, then applies the 7-bracket annual rate table to the year-to-date taxable amount and subtracts tax already withheld in prior months. Where an employee has elected the annual bonus (全年一次性奖金) separate-tax treatment, that bonus is excluded from the cumulative base and taxed separately using the ÷12 lookup method. Apply to foreign employees until 2027-12-31: the election to use the 8 tax-exempt expatriate allowances (住房补贴, 伙食补贴, etc.) in lieu of 专项附加扣除 (per 财政部 税务总局公告2023年第29号).
Submit both the social-insurance contribution declaration and the IIT withholding return by the 15th of the following month. Social insurance is filed and paid through the local human-resources bureau's online portal or the 社会保险网上服务平台; housing fund is filed separately through the 住房公积金管理中心 portal. IIT withholding is reported and the tax remitted through the 自然人电子税务局 (扣缴客户端 or web: https://etax.chinatax.gov.cn) using the 《个人所得税扣缴申报表》. Retain signed payslips, contribution receipts, and 专项附加扣除 supporting evidence for at least 5 years per 《税收征管法》.
In January–February of the following year, prepare a reconciliation package to assist employees with their annual IIT self-assessment (综合所得汇算清缴, 3月1日–6月30日 filing window). Issue the 《个人所得税年度扣缴情况说明》 to each employee so they can cross-check pre-filled data in the 个税APP. Flag employees who must file (综合所得 > ¥120,000 AND year-end true-up > ¥400, or employees with multiple income sources). Reconcile the year-end 全年一次性奖金 tax treatment choice and, if beneficial, advise employees to switch to consolidated treatment before the filing deadline.
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