Skip to main content

How to claim social insurance as an leaving China.

Written by .
Posted in .
How to claim social insurance as an leaving China

There are many expatriates who have travelled to China in order to establish their professional or entrepreneurial careers. Still, with time, they may consider moving once again to expand their business or explore new professional careers in another country.

However, when some expatriates decide to leave China for good, they often miss out on the large sums of social insurance they are entitled to collect back if they have been paying social insurance during their working time in China. Social insurance was introduced for expatriates in China in October 2011, where it was implemented initially in Beijing and a few other geographical pockets. And since then other parts of the country have already successfully implemented it or are in the process of implementing it.

What exactly can be withdrawn from social insurance?

Expatriates who do not consider drawing a Chinese pension upon retirement (assuming the criteria are met) can cash out certain amounts from their personal accounts that were paid for their social insurance. Expressly, they can withdraw their pension and unemployment insurance that they had contributed over the years by paying their social welfare and taxes in China after resigning or completing their contract.

Unfortunately, expatriates can only cash out and close their social insurance account and collect back personal contributions but will not be able to receive the sums that the company has paid for their part of the expatriate’s pension and unemployment insurance.

Effectively, most expatriates choose to either collect their part of the withdrawable social insurance or keep the account until they meet the retirement age of China (at the time of writing, 60 for men and 55 for women). To qualify for the Chinese pension, an expatriate should have contributed 15 years’ worth of pension contributions.

Theoretically, there is a pro-rata payment of pension for anyone that has paid for over 15 years. As the rules were only introduced in 2011, no expatriate has had the experience of contributing sums for 15 years to obtain a full Chinese pension. However, even considering the rules enforced in 2011, the pension will still be considerably low after 15 years.

Hypothetically after 15 years, if the expatriate worked in Beijing, their pension in 2021 could be more than CNY 900; if they worked in Shanghai, they could expect more than CNY 1200. To receive a larger salary, the expatriate would have to work and contribute to their pension for much longer. For either outcome, an expatriate would have contributed a lot more over 15 years or more if their remuneration was above the city cap on contributions.

The government department managing pensions do not have a clear system for allowing expatriates to claim their pensions in the future. So an expatriate needs to consider whether or not it is worth waiting until the criteria are met and they have retired, or they may withdraw their personal contributions upon exiting China.

Medical insurance is separate

Another source of income that expatriates often miss out on is their medical social insurance which can be withdrawn by using their red account book whenever they want during their professional career in China. If an expatriate already has private healthcare insurance, they can withdraw from that account from time to time as they would already be covered medically.

What is the process for an expatriate to cash out their social insurance?

The first step is to inform the company that the expatriate who works in China intends to leave and would like to begin their labour contract termination process. Generally, that includes submitting a resignation letter one month before the planned leave time.

Once the company in China is informed, the labour termination process begins and should take HR less than a month to complete via their government-approved websites, which tell about the status of the individual. The expatriate should also inform HR that they would like to close their social insurance account as more documents will have to be filled and downloaded into a USB for the expatriate to present to the social insurance bureau.

Generally, a good HR department will help the expatriate close the social insurance account to avoid any problems or misunderstandings. However, if unaccompanied, the expatriate will have to bring the documents and USB provided by their HR to the social insurance bureau on the day of their booked appointment. Documents normally include:

  • ID card of the handler
  • Company seal
  • Business license
  • Copy of original passport of foreign nationals
  • Departure certificate
  • Proof of resignation

If everything goes well, the expatriate should receive money in their bank account in China within two months. Hence, Acclime China recommends that all expatriates do not close their bank accounts in China and keep their Chinese mobile numbers active as it is essential to access and validate their identity.

There are cases where the company had miscalculated the taxes; therefore, the taxes have to be paid before the withdrawal can happen. However, there is no need to panic in that situation as the problem will be identified, and it falls on the company operating in China to resolve it.

What can an expatriate expect to receive?

The personal pension and unemployment insurance are the only parts that can be claimed when closing the social insurance account, the rest and the amount provided by the employer will effectively be lost. In the case study below, the expatriate earned RMB 20,000 per month for four years in a company based in Beijing and paid for social insurance, 8% for the pension and 0.2% for unemployment insurance. Also, the social insurance base is cap at 3 times of average salary per year. In this case, the monthly salary of CNY 20,000 does not exceed the base ceiling for the four years working in Beijing.

Social insurance breakdownExpatriate’s Part
SalaryCNY 20,000
Pension (8%)CNY 1,600
Unemployment (0.2%)CNY 40
Total monthly social insurance (8.2%)CNY 1640
Withdrawable social insurance after three yearsCNY 59,040

This case study is only a small example of what an expatriate can expect when working in Beijing; other cities and regions have different percentages, which can be more beneficial. Furthermore, social insurance is not affected by the expatriate using the beneficial tax deductibles specific to the expatriate’s remuneration packages, which include housing, meals, dry-cleaning, education, and elderly care. These tax benefits have been extended till the end of 2027.

A departure from China allows foreign individuals to file for a refund of part of the social contribution, on the other hand, the consistent contribution for 15 years to social security would enable a foreigner to elect for retirement, fusing both employee and employer benefits. As of today, this has not yet happened as the social insurance system for foreigners was set up less than 15 years. Conditions regarding the specific criteria for retirement qualification should be published in the coming years. 

Repatriation limitations

For those expatriates who have reached the end of their professional journey in China, it would be a shame to leave with part of their hard work not collected. However, expatriates should remember that payment without tax receipts to demonstrate tax filing fees is a maximum of USD 50,000 per annum. If one wants to transfer more than USD 50,000, they can do so with certified tax receipts to demonstrate tax filing and payments to their bank accounts.

For any repatriation transfer above USD 20,000, it is recommended for the expatriate to go to their bank in China and talk to them regarding how much money is possible for them to transfer in one go.

Going to the bank for USD 20,000 is because some banks have limits on how much CNY is exchanged, affecting how much the expatriates can exchange in their account at a time. By going to the banks, it is possible to create a repatriation plan which may exceed USD 20,000 per transfer; in any case, expatriates should not panic as there are plenty of solutions.

Once approved, the transfer will just incur the transfer and exchange fees as long as the transfer is done from and to personal and not corporate accounts. It is important to obtain tax certificates for income declared and tax paid, even for non-taxable income, as long as it is declared and a tax certificate issued, this is supporting documentation for repatriation of funds overseas.

Acclime’s recommendation

Whether an expatriate is leaving, just arrived or is still working in China, the best recommendation is to sit with an accountant to establish an effective tax plan to maximise their fringe benefits. Even if an expatriate is in the final three months of their operations, they can still quickly gain benefits before the end of a year.

Regarding an expatriate claiming their social insurance at the end of their professional journey in China, it is recommended to begin coordinating with the company and figuring out what challenges they might have to complete the claim. Often companies will struggle as it is not a standard procedure, and every city and region may have its specific requirements.

Hence, the best recommendation for an expatriate or company operating in China is to contact an accounting firm like Acclime China, which can help navigate the difficulties and mitigate any issues that may arise.

Contact our teams for expert support and further information about HR and employment solutions in China to ensure you are compliant in the market.

Grace Zhang, HR Services Manager,
Stella Zhou, HR & Payroll Director,
Mathias Estevez, Director of Growth – PEO,, +65 877 27 385

Related guides

About Acclime.

Acclime is Asia’s premier tech-enabled professional services firm. We provide formation, accounting, tax, HR and advisory services, focusing on delivering high-quality outsourcing and consulting services to our local and international clients in China and across the region.

Other guide categories

Get the latest China business insights to your inbox.

Subscribe to be the first to hear about China business insights and Acclime news. We will email you once a month about the latest news, announcements, services updates and Acclime events.

Newsletter signup

By signing up you agree to our terms of service and privacy policy. You can unsubscribe any time.