Shanghai becomes 7th region to cut corporate burden
Shanghai government announced its decision on Monday to lower social security premiumcontributed by companies by 2.5 percentage points, making it the seventh region to launchsimilar easing measures.
Such decision is expected to lighten corporate burden by about 13.5 billion yuan ($2.1 billion)this year, according to a government announcement.
The city will slash the premium rate contributed by companies for mandatory pension by 1percentage point, medical also by 1 percentage point and unemployment insurance by 0.5percentage point, while maintaining the same level of social security benefits.
Five provinces, Guangdong, Yunnan, Gansu, Guizhou and Jiangsu, together with Tianjinmunicipality, have reduced the social security premium on companies' behalf, in a drive to boostreal economy.
Guangdong province cut the premium rate for unemployment, medical and working injuryinsurances, saving corporate expenditures by 35 billion yuan ($5.39 billion).
According to a government guidance released last month, Tianjin will lower companies'contribution to social insurances by a combined 1.43 percentage points.
Chongqing municipality and Qinghai province are planning to be the next two, reported the 21thCentury Business Herald, as the regions have brought up such cuts on agenda as part of thesupply-side reform.
Shanxi, Hunan and Shandong provinces are studying to combine the medical insurance andmaternity insurance, and will likely launch the guideline later this year, said the newspaper.
Maternity and medical insurance premium currently total 8 to 10 percent of monthly salary, and bycombining the two, the premium will be lowered modestly, Qi Chuanjun, deputy secretary generalof the center for international social security studies at the Chinese Academy of Social Sciences,told the newspaper.
The move comes in response to a general cry for easing corporate burden by governmentofficials and scholars, as Chinese employers are reportedly burdened with one of the highestsocial security obligation in the world.
Total payment, including pension fund, medical insurance and housing provident fund, amounts to44.1 percent of an employee's monthly salary.
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