Lowering social insurance contribution rates: Four departments have issued guidelines for effective implementation!

Recently, the Ministry of Human Resources and Social Security, the Ministry of Finance, the State Taxation Administration, and the National Healthcare Security Administration issued a notice setting forth these requirements for effectively implementing the Comprehensive Plan on Reducing Social Insurance Contribution Rates (hereinafter referred to as the “Plan”). 。

Expedite the study and formulation of implementation measures, and ensure effective organization and execution.

All localities shall, in accordance with the spirit and requirements of the Plan and in light of their specific circumstances, formulate implementation measures under the leadership of the Party committees and governments. They should make meticulous arrangements regarding organizational leadership, specific tasks, policy measures, work progress, and supervision and inspection; ensure accountability at every level; adhere strictly to set timelines; and advance work by aligning with established benchmarks. The relevant provisions of the Plan must be rigorously enforced, with policies standardized and unified across regions to prevent fragmentation; any practice of “regulating on one hand while breaching regulations on the other” is strictly prohibited. Under the leadership of the Party committees (Party leading groups), all departments shall focus closely on the goal of fee reductions, conduct coordinated research, clarify responsibilities, take swift action, and develop departmental work plans. They must then implement these plans effectively, ensuring that all policies are put into practice in a thorough and detailed manner.

Accurately grasp the relevant policies of the Plan.

One 、 On Reducing the Employer Contribution Rate for Pension Insurance

Basic old-age insurance for enterprise employees across various regions ， Employer contribution rate Higher than 16% ， Can be reduced to 16% ； Below 16% ， It is necessary to study and propose transitional measures. 。 Where the contribution rates for units within the province are not uniform.

Cities with rates exceeding 16% ， Can be reduced to 16% ； Below 16% ， It is necessary to study and propose transitional measures. 。

For regions that currently do not plan to adjust the employer contribution rate, transitional measures should be formulated in accordance with the principles of fairness and uniformity. All local government agencies and public institutions… ， The employer contribution rate for basic old-age insurance may be reduced to 16%. 。

Two 、 On the Continued Phased Reduction of Unemployment Insurance Contribution Rates

Effective May 1, 2019 Provinces that have implemented a total unemployment insurance contribution rate of 1% will extend the period of the temporary reduction in the unemployment insurance rate until… April 30, 2020 。

Three 、 On the Continued Phased Reduction of Workers’ Compensation Insurance Premium Rates

For pooled regions that were already included in the scope of the fee reduction pursuant to the “Notice of the Ministry of Human Resources and Social Security and the Ministry of Finance on Temporarily Reducing Social Insurance Contribution Rates” (Ministry of Human Resources and Social Security Document No. 25 [2018]), the policy shall, in principle, remain in effect with no reduction in its intensity. For those pooled regions that were not previously covered but whose accumulated surplus as of the end of 2018 was sufficient to cover a number of months corresponding to the conditions for the temporary rate reduction, the contribution rates shall be lowered in accordance with the relevant regulations, ensuring that all eligible pooled regions are brought within the scope of the fee reduction. During the period of the temporary rate reduction, once the rates have been set, they will generally not be adjusted.

Four 、 On Adjusting the Calculation Basis for the Average Wage of Employed Persons

Each province shall determine the upper and lower limits of the individual social security contribution base by calculating a comprehensive average wage for urban employees, weighted based on the average wages of both non‑private and private‑sector urban employees in the province, thereby reasonably reducing the contribution bases for certain insured individuals and enterprises.

Following the adjustment of the calculation basis for the average wage of employed persons, in order to ensure a smooth transition in benefit levels for newly retired individuals, the Ministry of Human Resources and Social Security and the Ministry of Finance will introduce transitional measures for the calculation and payment of basic pensions and strengthen guidance to local authorities.

Five 、 On Improving the Policy Regarding the Contribution Base for Individual Business Households and Flexibly Employed Personnel

Individual business households and flexibly employed persons participating in the basic old-age insurance for enterprise employees shall have their individual social security contribution base’s upper and lower limits determined based on the locally adjusted, all‑inclusive average wage of urban unit employees. Allow contributors to choose an appropriate contribution base ranging from 60% to 300% of the standard. ， To alleviate their contribution burden and encourage participation in insurance and premium payments.

Six 、 On Accelerating the Advancement of Provincial-Level Unified Administration of Basic Old-Age Insurance for Enterprise Employees

All localities are to progressively standardize pension insurance policies and improve the provincial-level pooling system, laying a solid foundation for nationwide coordination. By the end of 2020, basic old-age insurance funds for enterprise employees will achieve unified collection and disbursement at the provincial level. The Ministry of Human Resources and Social Security and the Ministry of Finance will issue specific guiding opinions on advancing provincial-level pooling.

Seven 、 On Raising the Central Allocation Ratio of the Basic Pension Insurance Fund for Enterprise Employees

To further balance the burden of the pension insurance fund across provinces, the central-level pooling ratio for the basic pension insurance fund for enterprise employees will be gradually increased, ensuring that basic pensions for retired enterprise workers are paid on time and in full. In 2019, the central pooling ratio for the pension fund was raised to 3.5%. Specific tasks will be separately arranged by the Ministry of Human Resources and Social Security and the Ministry of Finance.

Eight 、 On Steadily Advancing the Reform of the Social Insurance Premium Collection System

In principle, contributions to the basic old-age insurance for enterprise employees and other types of enterprise employee insurance shall continue to be collected under the existing collection system, with contribution methods remaining stable and a phased transfer—“one province matured, one province transferred”—carried out as appropriate. The responsibilities for collecting social security contributions from government agencies and public institutions, as well as those for urban and rural residents, will be transferred on schedule. The departments of human resources and social security, taxation, finance, and medical insurance are required to promptly advance the development of information-sharing platforms and related work, strengthen information sharing, and ensure the orderly handover of collection tasks. Local authorities shall, in accordance with the requirements, make appropriate adjustments to the 2019 budget for social insurance fund revenues.

Properly address enterprises’ historical arrears; during the reform of the collection system, no entity shall unilaterally carry out a centralized clearance of such arrears, nor adopt any measures that would increase the actual contribution burden on small and micro‑enterprises, so as to prevent difficulties in their production and operations. It is imperative that the social security contribution burden on enterprises, particularly small and micro‑enterprises, be substantially reduced.