Shanghai new social contributions limits

The Shanghai Municipal Human Resources and Social Security Bureau disclosed on 5 July the revised social average monthly salary in the municipality for the year 2021, which increased from RMB 10,338 to RMB 11,396. In accordance with this figure, starting from 1 July, the upper limit for the social insurance contribution payment is adjusted from RMB 31,014 to RMB 34,188, while the lower limit is increased from RMB 5,975 to RMB 6,520.

According to the Chinese law, an employer is obliged to enrol its employees in the local social security system, make monthly contributions to five social insurance schemes (pension, medical, unemployment, work injury, and maternity) and the housing fund and withhold the individual's part of the contributions from the gross salary.

The contribution payments are based on the employee's average monthly salary in the previous year, with lower and upper limits set by the competent authority for each city.