Job Discussion Forums

[jayjjasper]

http://www.forbes.com/sites/russellflannery/2011/09/10/china-hits-foreigners-and-their-employers-with-new-social-benefits-tax-2/

[roadwalker]

Wow, that's certainly interesting news to spring on foreign workers who signed contracts without that little piece of info.

According to the Shanghai Daily newspaper (English), foreigners who don't retire in China can reclaim their contributions, but the employer contributions go into the social security pool. So it's a forced savings plan for most of us. Any interest? If Chinese banking is any indication, it may take some doing just to be able to withdraw contributions.

http://www.shanghaidaily.com/article/?id=482264&type=National

[The Great Wall of Whiner]

Ouch!

So a foreigner earning 10,000RMB a month will have to pay 1,100RMB a month on additional tax? And the employer will have to pay up 37% (3,700RMB)?

Where do they think the 3,700RMB will come from? Not the bosses!

In theory, if the bosses make the teacher pay the full amount, it'll be 48%!

And what about the guys making 5k a month? Could wages be lowered down under 2.5k a month?

LOL!?!?!?!

"Bye, China", say thousands of teachers I bet.

[choudoufu]

i consider the pensions a carbon-copy of the us social security system,
another ponzi scheme i'll never benefit from.

but perhaps of more interest would be the unemployment insurance.

when does that come into effect? how many months of continuous
employment is required?

must we be in-country to collect unemployment benefits? how do
i apply from overseas?

can we collect during our unemployed summers?

could this force a change in the standard ten-month contracts?

oh, and when does the tax kick in? do we still have the 'standard
deduction' of 4800 rmb?

************

another question.....how does the medical insurance work under
this program? would this mean that employers will no longer
offer insurance, or an insurance allowance?

i've got expat insurance with a high deductible, partially offset with
a cash allowance from the school. day-to-day medical expenses are
out of pocket.

but under this scheme (i love that word, sounds so....sneaky), will
we be issued a health card that can be used at hospitals and clinics
and pharmacies?

(free meds? hmmm, how much of the average ft's salary goes to
viagra?)

[wangdaning]

This is not really a new topic, I posted about it months ago.

http://forums.eslcafe.com/job/viewtopic.php?t=90181&highlight=

Not many people seemed to care. Personally I don't think they will be able to implement this very well. They have a hard enough time getting their own citizens to pay taxes. It is still up in the air. If the government get the feeling this is driving away foreign business I am sure it will quickly evaporate.

Still funny to hear people from English speaking countries bemoan 11% of their income being taxed, you'd think it would be business as usual.

[Shroob]

This is slightly worrying for me, I've signed a contract for this year and an 11% deduction would hit me quite badly as the job I've accepted isn't that well paid (chose for other reasons).

Is this taxation law definitely going to be passed?

[SH_Panda]

[wangdaning]

[7969]

[Shroob]

I envisage a brief period of rage/disgruntlement then for the issue to subside. I'm feeling peeved that I may be taxed almost 4 times more than what I signed up for. Definitely one aspect of what drew me to China was the low rate of tax yet reasonable standard of living. If I was in the UK (my country of origin, where I am now), there's no way could I afford to have my own appartment/house, pay utilities without worry and live the lifestyle I could in China.

This is just a possibility now though, right? What are the chances of this being implemented?

It hasn't totally put me off China (as long as I only pay the 11%), however, South Korea is looking more and more appealing.

[7969]

Well one of the complaints some foreigners have about living in China is that they don't get all the same benefits Chinese people get (not really sure what I'm missing out on here). But now that they might get their wish it's time for them to start complaining about paying for it

[Lobster]

I don't know how or when this will be implemented, or what benefits we will receive. Posters are right to feel that the competitive tax rate here makes it more attractive. Considering that maybe 1% of expats may retire here, it seems that few will benefit and will be in effect providing the government with an interest-free loan. SAFEA already suggests that employers offer medical insurance. I have it, but it's actually only accident coverage. It's unclear whether we will receive:

a retirement pension (at what rate and when, payable outside China)

unemployment insurance (highly unlikely as I don't believe this even exists here)

medical coverage (equivalent to locals in terms of hospital care and meds)

social security of some type

the ability to opt out

We may see employers cutting "on-the-books" wages in order to decrease our and their contributions. This in turn may become sticky if there's a pay/contract dispute. It may be nice for codgers like me who will retire in 10 years and then get 800-900 rmb/mo. in pension. For others, it just seems like a PITA.

RED

[askiptochina]

Higher salaries, more classes. Easy to wash away this extra "empire dues".

For now I am going to enjoy my Monday off which 6 classes were scheduled, but I don't have to teach. I am also not scheduled for Friday, which could have been make up classes for Monday. 3 days working, 4 days off. I can live with it.

Again, more taxes = more money shuffling = the game players have money to bet on = more hours for us teachers = same hours when they cancel. We should turn this into a spectator sport and charge admission.

Korea is already doing it. Next, we will see the one employer rule being enforced. Then, the salaries will go even higher just to own you.

[roadwalker]

This isn't exactly a tax, but a forced savings plan, or, for those who retire in China (if there are any foreigners who do) a social security pension scheme. It's a tax to the employers though, since they can't reclaim their portion paid. I'm not against it; in fact it's a good idea to ensure China's 180 million seniors have a safety net.

But most foreign workers here probably don't have plans to retire in China. Still okay- we can reclaim our savings. I'm just nervous about the processes required to reclaim. Will it be worth the effort?

Has anyone been informed by their school about any of this?

[Scott 1955]

dito