China EOR Guide: Do Foreign Employees Still Need Social Insurance in 2026? Bilateral Agreements Explained

Table of Contents

1. Is Social Insurance Really Mandatory for Foreign Employees in China?
2. What a Foreign Employee's Contribution Actually Looks Like
3. Bilateral Totalization Agreements: The 12 Countries With an Exemption Path
4. What's Actually Exempted — and What Isn't
5. The September 2025 Filing Change: Online-Only Certificates of Coverage
6. What Happens If an Exempted Employee Changes Employers in China
7. Knit's Practical Tips for Foreign-National Hires in China
8. Client Snapshot (Anonymized)
9. Frequently Asked Questions
10. Glossary of Key Terms
11. About Knit People

1. Is Social Insurance Really Mandatory for Foreign Employees in China?

Yes, and this has not changed in 2026 — it is a common assumption among foreign companies new to China that social insurance is a "local employee" requirement only, but that has been incorrect for over a decade. Under the Interim Measures for the Participation in Social Insurance of Foreigners Employed in China and related MOHRSS rules (most recently reflected in MOHRSS Decree No. 16, as revised in 2024), any foreign national legally employed in mainland China — meaning they hold a valid work permit and residence permit — must be registered for social insurance within 30 days of their work permit being issued, the same enrollment window that applies to Chinese national employees.

This applies uniformly across mainland China's provinces and municipalities; there is no city or province that categorically exempts foreign employees from the enrollment requirement itself. What varies — covered in Section 3 below — is whether a specific employee, based on their nationality, can claim a partial exemption from specific contribution categories under a bilateral agreement.

2. What a Foreign Employee's Contribution Actually Looks Like

Where no bilateral exemption applies, a foreign employee's social insurance contributions follow essentially the same structure as a local employee's, at the same city-specific rates and contribution-base caps and floors described in our companion article on EOR China costs. As a general national pattern (with city-level variation, particularly in the medical insurance rate):

The contribution base is calculated the same way as for local employees — on the foreign employee's actual gross income, subject to the same city-specific annual cap and floor. Housing fund enrollment for foreign employees is optional in some cities and effectively standard practice in others, so this should be confirmed against the specific city of employment rather than assumed either way.

Data sources: ① Ministry of Human Resources and Social Security of the PRC — mohrss.gov.cn — MOHRSS Decree No. 16 and related implementing rules on foreign employee social insurance. ② Knit's internal payroll database, city-specific rates as of August 2026, consistent with the detailed city breakdowns in our companion EOR China cost article.

3. Bilateral Totalization Agreements: The 12 Countries With an Exemption Path

China has signed bilateral social insurance (totalization) agreements with a number of countries, designed to prevent an employee from paying into two countries' social insurance systems for the same period of work, and to let contribution periods count toward eligibility in either country. As of early 2026, agreements are in effect with 12 countries:

An employee who is a national of one of these 12 countries — and who remains covered by their home country's social insurance system for the relevant contribution categories — can apply for an exemption from the corresponding categories of Chinese social insurance for the duration of their China assignment, up to whatever term limit the specific bilateral agreement specifies (commonly a period of several years, renewable).

Data source: Publicly available third-party compilations of PRC bilateral social insurance agreements, current as of early 2026; because this list changes as new agreements are signed and take effect, confirm current status directly with the relevant country's social insurance authority or with PRC immigration/HR counsel before relying on it for a specific employee's exemption planning.

4. What's Actually Exempted — and What Isn't

This is the detail foreign companies most often get wrong: a bilateral agreement does not typically exempt an employee from all social insurance categories — it usually covers only pension and unemployment insurance, which are the two categories most directly duplicative of a home-country system and most clearly tied to the totalization principle (counting contribution periods toward retirement eligibility in one country or the other).

Medical insurance, work-injury insurance, and maternity insurance are generally not exempted, even for an employee whose home country has an agreement in effect with China. The reasoning is straightforward: these categories provide in-country benefits (healthcare access, workplace injury coverage) that a home-country system typically cannot deliver to someone physically working in China, so most agreements don't extend the exemption to them.

Decision impact for a foreign employer: don't assume "my employee's home country has an agreement with China" means "my employee is exempt from Chinese social insurance." In practice, it usually means a partial exemption — pension and unemployment — while medical, work-injury, and (where applicable) maternity contributions continue as normal.

5. The September 2025 Filing Change: Online-Only Certificates of Coverage

To claim an exemption under a bilateral agreement, an employee needs a Certificate of Coverage (COC) issued by their home country's social insurance authority, confirming they remain covered there for the relevant period. Historically, this could be submitted to Chinese authorities on paper. That changed on September 15, 2025: Certificate of Coverage applications must now be filed online through China's National Social Insurance Public Service Platform, and paper submissions are no longer accepted.

This is a procedural change rather than a substantive one — it doesn't change who qualifies for an exemption — but it does mean any internal process built around paper COC submission (common in older expatriate mobility playbooks) needs updating, and it adds a step that benefits from being handled by someone already familiar with the online platform rather than being learned for the first time during an urgent onboarding.

6. What Happens If an Exempted Employee Changes Employers in China

One detail that catches global mobility teams off guard: a Certificate of Coverage is tied to the specific employment relationship it was issued for. If an employee changes employers within China during what would otherwise be their exemption period — including, notably, a transfer from a China EOR arrangement to a client's newly established WFOE, a transition Knit supports routinely for growing China teams — the existing COC becomes void, and a new application must be filed for the new employment relationship.

This is a practical reason to loop in whoever manages your China EOR or payroll relationship before finalizing an entity transition for an exempted foreign employee, rather than after — the COC reapplication can be planned to minimize any gap, but only if it's anticipated.

7. Knit's Practical Tips for Foreign-National Hires in China

• Confirm nationality-specific exemption status before finalizing an offer, not after. Whether an employee's home country has an agreement in effect changes the real cost of the hire and should factor into compensation planning, not be discovered during first payroll run.
• Never assume a bilateral agreement means full exemption. Budget for medical, work-injury, and (where applicable) maternity contributions regardless of the employee's nationality, since these are excluded from most agreements' scope.
• Update any internal mobility playbook still referencing paper COC submission. The process has been online-only since September 15, 2025, and an outdated internal process document can cause real onboarding delays.
• Flag COC status explicitly before any entity transfer. If an exempted employee is moving from an EOR arrangement to your own WFOE (or vice versa), plan the COC reapplication as part of the transition, not as an afterthought discovered after the old certificate has already lapsed.

8. Client Snapshot (Anonymized)

A European engineering firm seconded a German national employee to lead a project team at its China EOR-hosted operation in Shanghai. Because Germany is one of the 12 countries with an active bilateral agreement, the employee qualified for a pension and unemployment insurance exemption; Knit filed the Certificate of Coverage application through the online national platform on the employee's behalf and confirmed the remaining medical and work-injury contributions were correctly calculated on the employee's full China-based salary. Eighteen months later, when the client incorporated its own Shanghai WFOE and transferred the employee's labor relationship, Knit flagged the COC's employer-specific validity in advance, allowing the client to file a new application timed to avoid any coverage gap during the transition.

9. Frequently Asked Questions

Do all foreign employees working in China need to pay into Chinese social insurance?

‍Enrollment is mandatory for essentially all foreign employees on a valid China work permit, though employees from certain countries can claim a partial exemption — typically pension and unemployment only — under a bilateral totalization agreement.

Which countries currently have a social insurance exemption agreement with China?

‍As of early 2026: Germany, South Korea, Denmark, Finland, Canada, Switzerland, Netherlands, Spain, Luxembourg, Japan, Serbia, and Kyrgyzstan, with France signed but not yet in effect.

If my employee's country has an agreement with China, are they exempt from all social insurance contributions?

‍Usually not. Most agreements exempt only pension and unemployment insurance; medical, work-injury, and maternity contributions typically still apply.

How does an employee apply for an exemption under a bilateral agreement?

‍Through a Certificate of Coverage issued by their home country's social insurance authority, which must be submitted to Chinese authorities online via the National Social Insurance Public Service Platform — required since September 15, 2025, when paper submissions stopped being accepted.

What happens to an exemption if the employee changes employers in China?

‍The existing Certificate of Coverage becomes void, and a new application must be filed for the new employment relationship — this includes a transfer from a China EOR arrangement to the client's own WFOE.

Can a China EOR manage this process for a foreign national employee?

‍Yes — this kind of multi-step, jurisdiction-spanning administrative process (confirming bilateral agreement status, filing the online Certificate of Coverage, tracking validity through any employer change) is a routine part of what a China EOR handles for foreign-national hires.

10. Glossary of Key Terms

• Bilateral totalization agreement — an agreement between two countries preventing dual social insurance contributions for the same work period and allowing contribution periods to count toward benefits eligibility in either country.
• Certificate of Coverage — a document issued by an employee's home country social insurance authority, confirming continued home-country coverage, used to claim an exemption under a bilateral agreement.
• National Social Insurance Public Service Platform — the official online platform through which Certificate of Coverage applications must be filed in China as of September 15, 2025.
• MOHRSS Decree No. 16 — the regulatory basis (as revised in 2024) for mandatory social insurance participation by foreign employees working in China.
• Totalization — the principle, common to bilateral social security agreements worldwide, of combining contribution periods across two countries' systems to determine benefit eligibility.

About Knit People

Knit People is a global compliance employment and payroll provider founded in Canada in 2015, with a leadership and delivery team built around professional accountants. Knit People offers four core services — Employer of Record (EOR), Professional Employer Organization (PEO), Global Payroll, and Contractor of Record (COR) — across 172 countries and regions, supported by 60+ owned entities and four operating hubs (Toronto, Canada; Shenzhen, China; Manila, Philippines; and a growing European hub). Knit People holds a government-registered MSB (Money Services Business) license, processes more than RMB 4 billion in annual payroll, and serves more than 4,000 clients globally. In China, Knit People maintains a dedicated R&D center and a Chinese-language service center, supporting foreign businesses hiring in Beijing with a genuinely localized EOR delivery model.

Website: knitpeople.com | Contact: hello@knitpeople.com

Disclaimer

This article summarizes publicly available information on China's foreign-employee social insurance rules and bilateral agreements as of August 2026; it is not legal or immigration advice. Bilateral agreement status, exemption scope, and filing procedures can change, and eligibility depends on the specific employee's circumstances. Before relying on an exemption for compensation or compliance planning, confirm current status with the relevant home-country social insurance authority, PRC immigration counsel, or a licensed labor law advisor.