The Employer of Record (EOR) model has gained significant traction globally, especially in managing international and remote teams. By acting as the legal employer on behalf of companies, EORs simplify compliance, payroll, and taxation processes. In China, this model has proven particularly effective for businesses looking to tap into the country’s talent pool without establishing a local legal entity. This article delves into the employment costs as-sociated with R&D roles in Nanjing under the EOR framework. Click here to see ChaadHR China Employer of Record EOR hiring guide.
Understanding the EOR Model in China
The EOR model allows companies to hire employees in China without setting up a subsid-iary. The EOR becomes the legal employer, handling labor contracts, payroll processing, mandatory benefits, and compliance with local regulations. This arrangement is particularly advantageous for businesses seeking to test new markets or hire specialized talent in spe-cific cities like Nanjing.
For R&D positions, the EOR model can be especially beneficial. It enables companies to access highly skilled engineers and researchers while avoiding the complexities of Chinese labor laws and administrative processes. However, understanding the associated costs is crucial to making informed decisions.
Employment Costs in Nanjing for R&D Roles
Nanjing, as a growing innovation hub, offers a competitive talent pool for R&D professionals. However, hiring through an EOR comes with distinct cost considerations:
1. Base Salaries
Salaries for R&D professionals in Nanjing depend on the role's seniority and industry de-mand. For example, software engineers or researchers typically earn between RMB 15,000–30,000 per month. Compared to Tier 1 cities like Beijing or Shanghai, salaries in Nanjing are generally 20–30% lower, making it an attractive location for cost-conscious companies.
2. Mandatory Benefits
China’s labor laws require employers to contribute to social insurance and housing funds for employees. These contributions typically amount to 30–40% of an employee’s gross salary. An EOR will calculate and manage these payments, ensuring compliance with local regu-lations in Nanjing.
3. EOR Service Fees
In addition to employee-related costs, companies must pay service fees to the EOR provider. These fees vary depending on the provider but generally range from 10–15% of the em-ployee’s gross salary. While this adds to overall expenses, it offsets the administrative burden and risk of non-compliance.
4. Additional Expenses
Other potential costs include bonuses, allowances (e.g., housing or transportation), and training expenses. Companies should also budget for annual salary increments, which are common in China’s competitive R&D market.
Benefits of Hiring R&D Talent in Nanjing via EOR
Despite the costs, hiring through an EOR in Nanjing offers several advantages:
- Access to Talent: Nanjing is home to prestigious universities and a thriving tech ecosystem, providing a steady supply of skilled R&D professionals.
- Cost Efficiency: Compared to Tier 1 cities, operational costs in Nanjing are significantly lower while maintaining access to high-quality talent.
- Compliance Assurance: The EOR handles all legal and administrative responsibilities, re-ducing risks associated with China’s complex labor laws.
Conclusion
For companies looking to expand their R&D capabilities in China, Nanjing presents a cost-effective and strategic option. The EOR model further simplifies the hiring process, allowing businesses to focus on innovation without worrying about compliance challenges. While employment costs vary based on role and provider, careful planning ensures that businesses can maximize their investment in this dynamic market.
How Chinese Employer of Record (EOR) Works
As a local Employer of Record (EOR), we take on the legal responsibility of employing your new workforce in China. While you manage the day-to-day activities of your employees, we legally hire them through our agency. ChaadHR operates in over a hundred countries and utilizes local networks of experts to gain in-depth knowledge of local laws and regulations, as well as recruitment customs and trends. By partnering with us as an EOR, you gain access to this expert knowledge, which can be invaluable when expanding your business into China.
Our employment contract with your employees complies with Chinese labor laws and includes benefits such as insurance and pensions. We can hire, onboard, and manage your new employees in China in a matter of days, ensuring a fast and efficient process.
Hereis how we can assist you:
- We ensure that your new hires are compliant with Chinese laws and regulations.
- We take care of the employment contract, HR (Human Resources) matters, taxes, and payroll.
- We arrange the required visas or work permits for your employees.
- Our team keeps your employees informed about holiday arrangements, benefits, and any changes in labor laws.
- We keep you updated on changes in local laws and ensure that we comply with them.
-Your employees' declarations are forwarded to us on a monthly basis. Once we receive your payment, we deduct taxes and other contributions, and ensure that your employees receive their salaries promptly.
- You retain control over the daily activities and responsibilities of your employees.
🌎💼Compliantly Hire and Pay Talent in 160+ Countries With ChaadHR
With our comprehensive Global Employer of Record (EoR) solution and integrated Global Payroll solution, we empower businesses to confidently and compliantly hire and pay their workforce in over 160 countries. By partnering with ChaadHR, companies can eliminate the burdensome task of entity establishment and navigating complex labor laws, while ensuring their payroll operations are fully compliant with local regulations.
ChaadHR helps businesses expand globally. We provide support for testing new markets, hiring employees, and setting up subsidiaries. Our platform offers compliant onboarding of international contractors, remote employee hiring, and consolidated payroll management through a single dashboard. Book a demo to learn more.