China: Extension of social security fund reliefs due to covid-19 pandemic

published on 20 July 2020 | reading time approx. 2 minutes

In early March 2020, the Chinese government granted several reductions/ exemptions from social security contributions in order to reduce the economic impact of the coronavirus pandemic.

Now the Ministry of Human Resources and Social Security (MOHRSS), the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) issued a joint statement regarding an update on the “Implementation Period for Relief on Social Security Fees and Other Issues” to further reduce the economic burden of organizations, especially with regard to small and medium sized enterprises (SMEs).

Enterprises, who are facing financial difficulties during the pandemic, will thus receive extended support for their business.

The following table summarizes the extension of exemptions or reductions applied to the three areas of social security contributions: pension fund, unemployment insurance and work-related injury insurance:

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Scope	Company size	Relief	Updated period
Nationwide	SME	Exemption of employer contribution for pension, unemployment and work injury insurance	Extended until end of December 2020
	Enterprises facing serious difficulties	Delay on all social security contributions without additional charges	Extended until end of December 2020
Nationwide (except Hubei province)	Large enterprises	Reducing employer contribution by 50% for pension, unemployment and work injury insurance	Extended until End of June 2020
Hubei province	Large entreprises (excl. public institutions)	Exemption of employer contribution for pension, unemployment and work injury insurance	Extended until end of December 2020

Exemption of employer contribution for pension, unemployment and work injury insurance

In order to make the best possible use of the extended aid measures, we recommend direct coordination with the competent local authorities, as the implementation of the measures may vary from region to region. Rödl & Partner will gladly support you in this process.