The State Council on April 4 released a circular on cutting social security contributions, in an effort to ease burdens on enterprises and improve the business climate and social security system.
The levying of social insurance premiums will be furthered to ensure that small and micro enterprises’ burden will be lightened, while employees’ social insurance will be paid in full, on time.
According to the circular, starting May 1 China will cut the share of enterprise contributions to urban workers’ basic old-age insurance to 16 percent.
The policy of cutting premiums for unemployment and work-related injury insurance will be extended to April 30, 2020.
The circular also said that the social security wage base’s upper and lower limits will be verified and lowered for enterprises and individuals.
Self-employed people can choose their social security wage base within a range of 60 percent to three times the provincial average.
Efforts will be intensified to ensure that the payment and allocation of enterprises’ employees’ basic aged-care insurance will be unified at provincial level by 2020.
The ratio of centrally allocated funds will increase to 3.5 percent, provincial governments’ burden of aged-care insurance funds will be balanced, and retired employees will have their basic pensions paid in full, on time.
The circular also stressed that arrearage should be properly handled, warning against any measures that may increase the burden on small and micro enterprises.
The State Council has built a coordination mechanism to promote the work of lowering social security contributions and the reform of levying social security contributions.
The Ministry of Human Resources and Social Security, the Ministry of Finance, the State Taxation Administration, and the National Healthcare Security Administration should intensify supervision and guidance, to ensure problems will be solved in a timely manner.