What does it really cost to employ someone in China?
A 5,000 RMB salary costs an employer about 6,352.50 RMB a month in our Guangzhou example, once social insurance and the housing fund are added. The exact figure moves by city, because contribution rates and bases are set locally, not nationally. Anyone who quotes you a flat national number is guessing or hiding something.
Here's what sits underneath that number.
The salary is the smallest surprise
You agree 5,000 RMB with a candidate. That's what lands in their bank account, roughly, after their own deductions. It is not what leaves yours.
On top of the salary, the employer pays into social insurance (pension, medical, unemployment, work injury and maternity) and into the housing provident fund. These are legal obligations, not optional benefits, and they're calculated as percentages of the salary base. The employee pays a share too, deducted from their side. Yours is separate and additional.
Then there are the lines nobody puts in a quote: a meal allowance where the city or the role expects one, translation when the role touches foreign clients, and the phone and transport that come with a job that involves going to factories.
Add it up honestly and a 5,000 RMB hire sits near 6,352.50 RMB a month in our Guangzhou example, all in. A 15,000 RMB hire scales up but not linearly, because some contribution bases are capped.
Why the number moves by city
Social insurance in China is administered locally. Guangzhou, Shenzhen, Yiwu, Foshan and Jinan each set their own contribution rates and their own minimum and maximum bases. The gap between cities is real enough to change a hiring decision.
This is also why a provider quoting you "China" as one number should worry you. There is no China rate. There is a Guangzhou rate and a Yiwu rate, and they are different this year from last year.
The number a bundled quote hides
If you don't have your own company in China, you hire through an employment provider. A provider can quote you one bundled monthly figure per head.
Ask what's inside that figure. If the answer gets vague, that's not an accident. The bundle is where the spread lives: the difference between what the employee actually costs and what you're charged. When the breakdown is hidden, the markup is hidden with it.
There's a second layer you may never see. Some providers selling into the US and Europe don't employ anyone in China themselves. They subcontract to a local company, which may subcontract again. By the time the money reaches the person doing your work, it can pass through more than one set of hands, each taking a cut. Your employee's actual salary can be lower than you think, and nobody in that chain answers to you.
The practical consequence isn't only cost. It's control. When you need something changed (hours, scope, a difficult conversation, someone sent to a factory on Thursday), you're talking to a company that's talking to a company. Nothing moves quickly, and nobody is accountable for the outcome.
What an honest invoice looks like
There's no reason a monthly employment invoice can't show every line:
- Base salary
- Employer social insurance contribution
- Employer housing fund contribution
- Meal, transport, phone, translation where they apply
- The service fee, on its own line, as a number
Two totals: what the person costs, and what the service costs. If a provider can't or won't show you that, the question isn't whether there's a markup. It's how large.
That's how our Employee in China invoice is built. In our Guangzhou sample, the salary, social insurance and housing fund come to 6,352.50 RMB. We add a 10% handling fee only on what we pay out in China, which covers bank transfers, currency conversion, government and related fees. Our service fee sits on its own line, from $595 a month, with no handling fee on it. That sample invoice comes to about $1,638 a month.
What to ask before you sign
"Show me the full cost breakdown for this salary, in this city." Not a bundled figure. The lines.
"Who is the legal employer on the contract?" If it's not the company you're paying, ask how many layers sit between you and the employee.
"What happens if I need to end this in month four?" Chinese labor law can require severance when the employer ends the contract, generally one month's pay for each year worked. Find out now who carries that, how it's funded, and what your notice obligations are, not when you're already trying to leave.
"Which city is the contract registered in?" It determines the contribution rates, the local labor bureau you'd deal with in a dispute, and it can shape the answer to the previous question.
The short version
Salary plus about 27% on average is the honest starting estimate for employer cost in most Chinese cities, and the real number depends on which city. Any provider who won't itemize it is charging you for something they'd rather you didn't measure. Ask for the lines, ask who the legal employer is, and ask what happens on the way out, before anyone starts.
Not sure you need a full-time person? Monthly Support puts our shared team on the suppliers you already have instead. The difference is laid out in Monthly Support vs Employee in China.
Want the exact monthly number for your city and salary? Book a 30-minute call or WhatsApp us at +86 153 2208 6875.
China Agent has worked on the client side in China since 2009. Today it is a Hong Kong company with people in Guangzhou, Foshan, Yiwu, Shenzhen and Jinan.
Last updated: 19 October 2026
