Key Takeaways
- China’s average salary indicates its economic health and income distribution. According to the latest Government data, as of 2024, the average salary is CNY 22,053 per year.
- Salaries differ greatly by region and industry, with urban areas and specific sectors leading in compensation.
- Multiple factors, including regional policies and global market trends, influence the average salaries in China
In China, salary trends vary significantly across different regions and sectors. Highly developed urban centers such as Shanghai and Beijing offer higher wages than rural areas, reflecting the broader economic activities concentrated in these metropolises.
While precise data is hard to come by, we base our conclusions on Glassdoor, Salary Explorer data, and information widely reported in the media.
Read on to learn the key things you need to know about the average salary in China.
Overview of Average Salary in China
In 2024, the average salary in China in Chinese Yuan (CNY) is ¥22,053 per month, which, at the latest exchange rates, translates to approximately USD $3,050 per month. The monthly average wage is generally higher in urban areas than in rural regions, reflecting the economic disparity within the country.
Salaries also differ substantially depending on the industry. The technology sector often offers higher wages, while traditional manufacturing jobs may provide lower compensation.
Sector-Specific Average Salaries
Historically, tech and software engineering in China can pay well, with reports in 2021 indicating average earnings of over USD 100,000. However, this only reflects the pay of senior engineers in major cities and doesn’t reflect the pay of ordinary IT staff. According to the latest Glassdoor data, in 2024, software engineers in China averaged 31,200 CNY per month.
While precise average salaries in this sector are not available due to the experience and skill involved, average pay is higher than the average overall.
The service sector pays lower, on average, than the total average pay in China.
Factors Influencing Salaries in China
Several elements impact salary levels in China. Economic growth, education, skill level, and industry demand are pivotal in determining how salaries are structured.
1. Economic Growth
China’s rapid economic growth has significantly increased average salaries. As the GDP grows, businesses expand, increasing the need for labor and wages. Cities with larger economies, like Shanghai and Beijing, often receive higher salaries than less developed areas.
2. Education and Skill Level
A worker’s education level and skills greatly influence their earning potential. Those with higher education and specialized skills tend to command higher salaries.
3. Industry Demand
Salaries in China also vary widely across different industries depending on the market demand. Industries such as Information Technology, finance, and pharmaceuticals often offer higher compensation due to an increased demand for skilled professionals. In contrast, traditional sectors with a labor surplus may offer lower wages.
4. Private vs State Sector
With a large state sector compared to most other large economies, state sector salaries are relatively high. In 2023, state sector employees earned nearly double, on average, as those in the private sector.
What are the other elements of China’s employee pay system?
In addition to their base salary, other elements of a compensation package in China relate to what an employee will receive. This may include.
Annual Bonus. Many companies in China offer yearly bonuses to their employees. This bonus may be paid once a year or alongside the monthly salary, potentially using special tax treatments to reduce tax burdens.
- 13th-Month Pay. While not mandatory, it is standard for employees in China to receive an extra month’s Pay in December. This may be in addition to or instead of a bonus. Unlike a bonus, 13th-month Pay is usually not performance-based.
Allowances. Chinese employees, especially foreign staff, can benefit from various deductible allowances before calculating their tax burden. Allowances include housing, meals, laundry, children’s education, and home visitation expenses. The specifics of these allowances, such as the housing allowance or meal allowance, often require documentation like official invoices (fapiaos) to qualify for tax deductions. They may also receive overtime pay when they work above their standard hours.
Mandatory Benefits (Social Security). The salary package also incorporates mandatory benefits, which include social insurance and the housing fund. These contributions, made by both the employee and the employer, cover basic old-age insurance, basic medical insurance, work injury insurance, unemployment insurance, and maternity insurance. Some employers may offer additional pension plans or wealth accumulation plans as part of the compensation package.
Commission. In sales-oriented roles, employees may earn commissions as compensation, incentivizing them to meet sales targets and contribute to the company’s success.
International Comparisons
To put average salaries in China in context, it is worth comparing with average salaries in other large nations:
- Germany: The average salary is around EUR 4.105, according to the Federal Statistical Office, with salaries ranging from EUR 1,800 to EUR 16,900 per month, encompassing various sectors and job roles.
- UK: Historically, The UK has higher average salaries than the global median, with significant sectorial differences. According to data from the Annual Survey for Hours and Earnings (ASHE) by the Office for National Statistics (ONS), the gross average salary in the UK is GPB 2,886 per month.
- India: India starkly contrasts with significantly lower average salaries than Western countries. In 2024, the average pay was approximately INR 31,900 per month. However, highly skilled roles in India can be just as highly paid as in Western countries, with USD 100,000 annual salaries not unusual for highly-skilled software developers.
These comparisons highlight the global disparities in salary and the economic factors influencing them, such as cost of living, demand for skills, and industrial development. They also reflect each country’s broader economic conditions and labor market dynamics, contributing to the diverse salary ranges observed.
Paying the Average Salary in China
It is crucial that international companies entering the China market properly benchmark salaries to the position offered. Depending on the industry, many international companies will be hiring for specialized roles and may need to provide more than the average salary in that region.
For support on your China market entry and salary benchmarking, contact MSA, your China expansion, and payroll experts with an in-depth understanding of local pay conditions.
FAQ
What is the typical monthly salary in china?
he typical monthly income for workers in China is around 22,053 Chinese Yuan Renminbi (CNY). However, this figure can significantly vary depending on the city and sector of employment.
What is the average annual salary in China?
Taking into account base salary only, the average annual salary in China is around CNY 350,000.
