You may feel a bit confused about the policy on employment security fund for disabled persons as here comes the peak period of the payment of 2020. So today we are going to help you get clear about it to avoid tax risks.
WHAT IS IT?
Employment security fund for disabled persons is a key policy to promote and guarantee disabled persons’ employment.
According to China’s Regulations on the Employment of Persons with Disabilities, employing units shall employ a certain proportion of disabled persons in appropriate types of jobs and posts.
Employing units which fail to meet the target proportion of disabled employees determined by local governments shall pay employment security fund for disabled persons, which is also known as Canbaojin (残保金).
The regulations stipulate that state organs, nongovernmental organizations, enterprises, institutions and private non-profit organizations (hereinafter all referred to as employing units) shall observe their responsibilities and obligations of supporting the employment of disabled persons.
The proportion of disabled employees shall not be lower than 1.5% of the overall employees. The specific ratio may be determined by people’s governments of provinces, autonomous regions and municipalities in line with their actual conditions.
HOW TO CALCULATE THE PAYMENT?
Annual payment = (the annual number of in-service employees of unit of last year X 1.5% – the actual number of disabled employees of unit of last year) * the annual average salary of in-service employees of unit of last year.
For example, a company in Guangzhou had 100 employees in total last year, no disable employees. The average salary of each employee is 80,000 yuan.
Employment security fund for disabled persons payable = (100*1.5%-0)*80,000 = 120,000 yuan
P.s. In-service employees refer to the official staff or those who have signed labor contract or service agreement valid for 1 year or above. The number of seasonal workers should be converted into the annual average number.
Employing units login the e-tax system of Guangdong taxation department, click “我要办税” – “税费申报及缴纳” – “按期应申报” – “残疾人就业保障金”, then declare the fund.
Web of the system: http://www.etax-gd.gov.cn
Employing units go to the local taxation department, fill in the declaration form to declare the fund.
From January 1, 2020 to December 31, 2022, enterprises with no more than 30 in-service employees can be exempted from the employment security fund for disabled persons.
From January 1, 2020 to December 31, 2022, enterprises with the proportion of disabled employees 1.5% or above of the overall employees can be exempted from the fund.
1%≤the proportion of disabled employees＜1.5%, the employing unit should pay 50% of the fund payable.
The proportion of disabled employees＜1%, the employing unit should pay 90% of the fund payable.
HOW TO CUT BUSINESS COSTS?
Some of our friends may wonder how to control and reduce costs while supporting the employment of disabled persons. Well, we have some tips for you.
First things first, the fund of the year will be collected in the next year, so:
If the policy is adjusted in 2021 and the fund is raised while you haven’t made a plan in advance, all you can do is to to follow the adjusted rules and pay more funds, which will substantially raise the operating costs of your company.
It is necessary to know to latest on policies related to your business and make a detailed and appropriate plan to control risks. HACOS Business Services provides one-stop business solutions, helping you develop your business and make money in China.
Please feel free to contact HACOS if you want to know more details about tax and employment policies or have any questions about working in China!
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