Is it better to contract or be employed in China?

At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in China: a contractor keeps about $142,500 against an employee's $123,760, a difference of $18,740. The break-even rate — where the two are equal — is about $87/hour. IIT + social insurance; foreigners' six-year rule on foreign income.

What hourly rate do I need to charge in China?

To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $94/hour, or a day rate around $752. That assumes $135,333 of gross revenue across 1440 billable hours.

Why is the contractor tax rate in China different from the employee rate?

A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 26% effective for a contractor against 15% for an employee. IIT + social insurance; foreigners' six-year rule on foreign income.

How accurate are these China figures?

These are single blended effective rates, not a bracket-by-bracket calculation, and China is outside the OECD series this site cross-checks against. Real liability depends on your regime, deductions and region. Estimates for comparison, not tax advice.

Contracting · China

Contractor or employee in 🇨🇳 China?

At $100/hour, contracting nets more than employment — the break-even rate is about $87/hour.

Side by side at $100/hour

	Contractor	Employee
Gross	$192,000	$145,600
Tax	$48,000	$21,840
Health insurance	$1,500	—
Net	$142,500	$123,760
Effective rate	26%	15%

IIT + social insurance; foreigners' six-year rule on foreign income. Run your own rate in the interactive calculator.

To take home $100,000 a year

You need to charge about $94/hour (day rate $752), billing 1440 hours across the year for $135,333 of gross revenue.

Change the target in the required-rate calculator.

Countries with a similar contracting premium

🇬🇷 Greece — +21% for contracting
🇿🇦 South Africa — +21% for contracting
🇪🇸 Spain — +28% for contracting
🇯🇵 Japan — +21% for contracting

Questions

Is it better to contract or be employed in China?: At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in China: a contractor keeps about $142,500 against an employee's $123,760, a difference of $18,740. The break-even rate — where the two are equal — is about $87/hour. IIT + social insurance; foreigners' six-year rule on foreign income.
What hourly rate do I need to charge in China?: To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $94/hour, or a day rate around $752. That assumes $135,333 of gross revenue across 1440 billable hours.
Why is the contractor tax rate in China different from the employee rate?: A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 26% effective for a contractor against 15% for an employee. IIT + social insurance; foreigners' six-year rule on foreign income.
How accurate are these China figures?: These are single blended effective rates, not a bracket-by-bracket calculation, and China is outside the OECD series this site cross-checks against. Real liability depends on your regime, deductions and region. Estimates for comparison, not tax advice.

Estimates for comparison, not tax advice. Effective rates are blended, not bracket-by-bracket except where noted, and every country has regimes and deductions a single rate cannot express.