Working in China: What You Need to Know About “Five Insurances and One Housing Fund”

If you work in mainland China, you will quickly hear people talk about “Five Insurances and One Fund” (五险一金). This is China’s basic social security system for employees and is a mandatory part of most formal employment relationships.

Under PRC labor and social insurance laws, employers must normally enroll employees in these schemes and make monthly contributions together with the employee. For foreign employees, participation is required in many cities, but local practice and enforcement can be quite different, so you should always check the rules in the city where you work.

What are the “Five Insurances”?

China’s social insurance system is made up of five main types of insurance:

Pension insurance – Long‑term retirement benefits, similar to a public pension.

Medical insurance – Basic medical coverage for hospital and certain outpatient treatment.

Unemployment insurance – Limited benefits if you lose your job and meet the conditions.

Work‑related injury insurance – Coverage for work accidents and occupational diseases.

Maternity insurance – Benefits and medical expenses linked to childbirth.

Employers and employees both contribute to pension, medical and unemployment insurance, while work‑injury and maternity insurance contributions are usually paid only by the employer.

What is the “One Fund”?

The “One Fund” is the housing provident fund (住房公积金).

This is a mandatory savings scheme for Chinese employees, where both employer and employee pay a percentage of the salary into a special account that can be used for buying property, repaying mortgages or, in some cities, renting accommodation.

Foreign employees are generally not required to participate in the housing fund, but some cities allow foreigners to join voluntarily, especially if they plan to buy property in China.

National Framework vs. Local Rules

Although the basic structure comes from national laws such as the Social Insurance Law and the Labor Contract Law, the actual contribution rates and bases are set by local governments at provincial and municipal level.

This means:

Each city can have different employer and employee contribution percentages.

• The minimum and maximum salary base used to calculate contributions also varies.
• Cities may merge or adjust some schemes in practice (for example, Shanghai combines maternity and medical insurance).
• As a result, the real cost and benefit level in Beijing, Shanghai, Guangzhou, or a smaller city can be quite different, and rates are usually adjusted every year.

What Foreign Employees Should Pay Attention To

If you are a foreigner working in China, you should pay particular attention to the following points:

Whether you must participate: Many cities formally require foreign employees hired by local entities to join all five insurances. Some places have exemptions or do not strictly enforce the rules.

Which party contributes what: Check your employment contract and payslip to see how much the employer and you pay each month, and on what salary base.

Impact on your net salary: Social insurance and (where applicable) housing fund contributions will reduce your take‑home pay but provide you with basic protection and, in some cases, transferable benefits.

Portability and refunds: If you leave China permanently, some parts of the social insurance (for example, pension accounts) may be refunded or kept for later use, depending on local practice.

Housing fund eligibility: Ask whether foreigners in your city can open a housing fund account and if this makes sense for you in light of your housing plans.

Because the rules combine national labor and social insurance law with local government regulations, and because practice changes over time, you should always check the latest rules in the city where you will live and work or seek professional legal advice.