Expatriate Employees in China
The labour contract and social security law both directly affect the payroll process for expatriate employees working in China. These complex regulations for wages are regionally dependent and vary with each individual’s requirements. Professional payroll services can help employers pay employees timely and accurately.
Because payroll and payroll taxes considerably affect the net income of your enterprise, it is essential that financial records, wages, and pay slips are managed thoroughly. Outsourcing payroll processing to LehmanBrown ensures that your employees’ payrolls are managed by professionals and comply with Chinese regulations. We can assist throughout the entire process, from set up and pay slip preparation to payroll reporting, assessment, and review.
Laws & Tax Evasion
Under Chinese law, an employer-paid bill is treated as a taxable benefit. Foreign establishments in China are the withholding agents of their employees’ tax and are obliged to report to the Chinese authorities that they are bearing an employee’s tax liability.
Chinese tax authorities’ are mounting a campaign against tax evasion. This means it is more likely that expatriate employees in China will be faced with an unpaid tax bill as well as an additional late payment fine of 0.05 percent per day of the overdue amount.
Under the Law of the People’s Republic of China on the Administration of Tax Levying (Article 44), a taxpayer must settle outstanding tax payments or provide a guarantee for the outstanding payment to the tax authority before leaving China. If the taxpayer fails to do so, the tax authority may inform the border control authorities and stop the taxpayer from leaving. It is not known whether the Customs authorities have used this method against managers or other personnel of foreign-invested enterprises.
Our experience of working with firms abroad, combined with an internal international network forms a strong foundation to arrange the payroll process for expatriates. At LehmanBrown, we fully understand IFRS, GAAP and other accounting requirements, and have a broad knowledge of how multinational banks facilitate payments. Therefore, LehmanBrown’s professional payroll services are well-equipped to take care of finances between you and your expatriate employees.
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