Chinese social security contribution hits world No. 1   

中國社保繳費費率是鄰國4.6倍 繳費基數(shù)還在漲

(ECNS) -- Ranked first among 181 countries globally, the social security contribution proportion in China is 4.6 times that of its Southeast Asian neighbors, three times  that of five Nordic countries, 2.8 times higher than in member states of the G7 and double that of fellow BRIC nations (Brazil, Russia and India), according to Professor Bai Chong'en at Tsinghua University.

The social security system in China consists of five different types of insurance, plus one mandatory housing fund. The system is complex because it is organized at the regional level, with companies and employees required to pay their share.

Many Chinese cities have increased the amount of company and individual contributions to social security funds, a newspaper reported.

China's social security taxes have increased from last year in Tianjin, Chongqing, Fujian and Jiangxi, with some provinces now taking up to 50 percent of average monthly wages.

For 2015, Tianjin's minimum social security contribution has increased by 11 per cent to reach 2,812 yuan ($452,10), while its upper limit has increased by 10 per cent, capped at 14,058 yuan ($2,289), according to Tianjin Human Resources and Social Security Bureau.

In Beijing, the current minimum social security contribution increased from 1,869 yuan ($304) in 2012 to 2,317 yuan ($377) in 2014. Meanwhile, Zhejiang's minimum contribution also rose from 1,908 yuan ($311) to 2,230 yuan ($363) over the same period.

According to national social insurance regulations, employers and employees must pay monthly premiums into three funds (pension, medical expense, and unemployment), while employers are also required to contribute to another two (maternity and work-related injury). The contribution rates accounted for 60-300 percent of the average wage across China in 2014. 

Social security contributions are assessed on employment income, which means annual increases are reasonable, given the rapid increases in average salaries, according to Tuo Guozhu, a professor at the Capital University of Economics and Business.

The Chinese government is considering levying a social security tax, with measures including increasing financial subsidies, establishing a uniform pension system for employees, and improving incentives to pay social security insurance.