Every payday, your payslip shows deductions for pension insurance, medical insurance, unemployment insurance, and the housing fund — and most people are baffled: how much is actually deducted? Is it correct? How much is the employer quietly paying on my behalf? Social insurance and the housing fund are the largest "invisible income" most people ever have. Let's explain the contribution base, rates, and the math so you can read your payslip from now on.
What's Included: Who Pays What
The "five insurances and one fund" are: pension, medical, unemployment, work-injury, maternity insurance (five insurances) + housing provident fund (one fund). Pension, medical, unemployment, and the housing fund are paid by both employee and employer; work-injury and maternity insurance are fully employer-paid, with no employee deduction. So your payslip actually deducts only "three insurances and one fund" (pension, medical, unemployment + housing fund), but your employer contributes to all five plus the fund.
The formula is: monthly contribution = contribution base × rate. Employees and employers each pay at their own rate, which varies by region — the following are typical reference rates for most areas:
| Insurance | Employee rate | Employer rate | Notes |
|---|---|---|---|
| Pension | 8% | 16% | Employee portion goes to personal account |
| Medical | 2% | ~8% | Includes major-illness pool; personal account usable |
| Unemployment | 0.5% | 0.5%-1% | Varies slightly by region |
| Work injury | 0 | 0.2%-1.9% | Floats by industry risk |
| Maternity | 0 | ~0.8% | Merged into medical insurance in many places |
| Housing fund | 5%-12% | 5%-12% | Rate set by employer; same for both sides |
How the Contribution Base Is Set: Caps, Floors, and Your Actual Wage
The contribution base isn't arbitrary — it's your previous year's average monthly wage, but bounded by a floor and cap: the floor is usually 60% of the local average wage, the cap 300%. If your actual wage is below the floor, you contribute at the floor; above the cap, at the cap; within the range, at your actual wage.
Example: a city with an 8,000/month average wage has a base floor of 4,800 and cap of 24,000. Xiao Wang earns 6,000/month — within range, so he contributes on 6,000. Xiao Li earns 3,000 — below the floor, so contributes on 4,800 (base "lifted"). Xiao Zhang earns 30,000 — above the cap, so contributes on 24,000 (base "capped").
Now Xiao Wang (6,000/month, housing fund 8%, pension 8%, medical 2%, unemployment 0.5%): monthly employee deduction = 6,000 × (8%+2%+0.5%+8%) = 6,000 × 18.5% = 1,110. Employer contribution = 6,000 × (16%+8%+0.5%+0.5%+0.8%+8%) ≈ 6,000 × 33.8% ≈ 2,028. So while your payslip shows 1,110 deducted, your employer actually pays about 2,028 on your behalf — social insurance and the housing fund are a substantial invisible income beyond your salary. To compute your own contributions and take-home pay, enter your gross wage and rates into the salary calculator.
Reading Your Payslip: Deduction Order and Common Misconceptions
The usual order on a payslip is: gross wage → personal social insurance & housing fund → income tax (after the 5,000 exemption and special additional deductions) → take-home pay. Social insurance and the housing fund are deducted before tax, so they're "pre-tax deductions" that lower your income tax. For the exact tax math, check the income tax calculator and the percentage calculator.
Four misconceptions to watch. First, don't assume "the less deducted, the better" — higher deductions mean a higher base, which means a better pension, a fuller medical personal account, and a bigger housing fund later. Second, both your housing-fund contribution and your employer's go into your account; the employer half is your money too, so the housing-fund rate is meaningful hidden compensation when negotiating. Third, if you change cities, transfer your social insurance — a break can affect medical reimbursement and home-buying eligibility. Fourth, flexible workers can enroll themselves, but usually only pension and medical, at different rates than employees. Remember these and you'll understand every deduction — and negotiate better for yourself.
FAQ
Q1: Does the employer pay the same amount as my deduction?
No. Employees pay only three insurances plus the fund (pension, medical, unemployment, housing fund); work-injury and maternity insurance are fully employer-paid, and the two sides have different rates — the employer's burden is usually much higher than the employee's.
Q2: What happens if my social insurance breaks when changing jobs?
A break mainly affects three things: medical reimbursement may be unavailable the month after the break (some cities have waiting periods), qualification periods for buying a home or a car may restart, and your pension accumulation years shrink. Line up the next job before leaving, or continue as a flexible worker.
Q3: Is a higher housing-fund rate always better?
Usually yes. Both your contribution and your employer's go into your account, usable later for low-interest home loans or withdrawals. A 12% employer rate beats 5% — it's real hidden income.
Q4: Can I choose my own contribution base?
Employees' bases follow their previous year's average monthly wage as reported by the employer; you can't freely choose, but you can verify the employer reports your actual wage (under-reporting hurts your future benefits). Flexible workers, however, can pick from local tier options.