Social Insurance, Housing Fund, and Minimum Wage Adjusted in Suzhou

Foreign-investors doing business in the Suzhou area should be aware of three important changes made by the respective local government bureaus on social insurance, housing fund, and minimum wage – all of which are effective from 1st July 2013.

Suzhou City’s Social Insurance Contribution Base Adjustment

The Suzhou City government provided a notice that, starting on July 1, 2013, the lower limit of social insurance contribution base increased from RMB2,010 to RMB2,170. This notice comes as a continuation of the Suzhou Social Insurance Program adjustments for 2013, which was first made in April this year that raised the social insurance contribution base to RMB14,407. Therefore, the new adjusted social insurance contribution base for 2013 ranges from RMB2,170 to RMB14,407.

Both employers and employees must make mandatory contributions to the five social insurances (pension, medical, unemployment, work injury, maternity) if the employee’s monthly wage is over RMB2,170. Employees with a salary over RMB14,407 should have their contributions calculated on that figure.

Housing Fund contribution cap adjustments

Suzhou’s Housing Provident Fund Management Center released a circular (Suzhou Housing Fund Regulation (2013) No. 3) on July 24, stating that the cap on housing fund contribution will be adjusted starting on July 1, 2013. The cap on housing fund increased to RMB15,400 from RMB14,407, while the social insurance cap still remains at RMB14,407.

Companies with employees earning monthly salaries between RMB14,407 and RMB15,400 should particularly take note of this increase in housing fund base cap so as to prevent incorrect payments.

For example, if an employee’s monthly wage is RMB15,000, his contribution base for social insurance will be calculated at a rate based on RMB14,407 and housing fund at a rate based on RMB15,000.

Greater Suzhou Area Increased Standards for Minimum Wage

Starting from July 1, 2013, the Human Resource and Social Security Bureau of Suzhou City set the monthly wage to a minimum of RMB1,530, which is around 11 percent increase from the original RMB1,370. This raise in minimum wage applies to all of the Greater Suzhou Area including Suzhou City, Suzhou Industrial Park, Zhangjiagan, Changshu, Taicang, Kunshan, and Wujiang.

The circular also provides that the new minimum wage standard does not include the additional wage and allowance for:

1. Overtime work;
2. Middle shift and night shift, high temperature and low temperature, and hazardous work environment;
3. Other employment benefits.

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