Insurance & costs
How to calculate sick-leave pay in China without using the wrong local formula
Start with the national eighty-percent local-minimum-wage floor, then verify the city rule, calculation base, service record, contract and payroll dates.
China does not have one national rule requiring every employer to pay the same percentage of ordinary salary during sick leave. The national implementation opinion supplies a floor during the prescribed medical period: sick-leave wages or illness or disease relief may be below the local minimum wage, but not below eighty percent of that minimum. The controlling city or provincial rule may define a calculation base, service-linked percentage, day count and transition between sick-leave wage and illness relief. A labor contract, collective agreement or lawfully adopted employer rule may be more favourable. This guide shows how to build a transparent calculation while keeping pay separate from the employer absence record and statutory medical-period ledger. It does not calculate an individual's city result, decide a payroll dispute or provide tax or legal advice.
Use this as a practical starting point
Provider procedures can change, so confirm time-sensitive details with the hospital, insurer or service. A licensed professional must make clinical decisions for an individual patient.
At a glance
Key points
- The national 80% figure protects a floor based on the applicable local minimum wage; it is not automatically eighty percent of full salary.
- A valid calculation identifies the local rule, calculation base, service-linked rate, payable dates, minimum-wage floor and any more favourable contract term.
- Payroll payment, employer leave approval and medical-period accumulation should reconcile, but none automatically proves the others.
- The wage rule must be current for the city and pay period; a national employer cannot safely reuse one municipal formula everywhere.
- A transparent worksheet separates gross sick-leave wage, illness relief, statutory deductions, rounding and the actual payment date.
- Approved absence dates and payroll units can differ from the calendar-day method used to track medical-period protection.
- A foreign employee uses the same controlling local analysis unless a lawful instrument supplies a more favourable term; nationality is not a separate percentage.
- Possible work injury or occupational disease should be priced under its own regime instead of ordinary sick pay.
- Return-to-work arrangements can change hours and duties, so payroll must record the agreed category without exposing unnecessary medical details.
- Pay disputes should preserve source documents and remain separate from any later Article 40 employment decision.
Identify the controlling city, rule and employment instrument
Begin with the employer location and the rule that actually governs wage payment for the employment relationship. Ask payroll to cite the current municipal or provincial sick-leave wage provision, not a blog, another city's practice or an old internal spreadsheet. Then collect the labor contract, collective agreement and employer wage or leave rule. Record whether any term is more favourable than the local minimum. A nationwide employer may have different lawful calculations in Beijing, Shanghai, Guangzhou, Shenzhen or another city even where its HR system uses one leave code.
Do not confuse the local minimum wage with the employee's ordinary wage, base wage, normal working time wage or 本人工资. These are different concepts and the controlling local text determines whether one becomes the calculation base. Record the applicable minimum wage for the pay period and whether the local rule states how social-insurance contributions or other deductions interact with the floor. Do not invent a net-pay floor from a gross-pay sentence or copy a historical rate without checking its effective date.
Build a calculation worksheet that exposes every input
Use columns for approved sick-leave dates, payroll period, calculation base, local percentage or service band, daily divisor, payable units, gross sick-leave wage or illness relief, national floor comparison, more favourable adjustment, statutory deductions and payment date. Attach the source for each input. If the local rule uses continuous service or employer service, state the service start date and documents used. If a month contains ordinary work, annual leave and sick leave, calculate the categories separately before reconciling the monthly result.
Do not count a calendar label as a pay instruction. The medical-period ledger may include rest days and statutory holidays for protection purposes, while the local wage rule may use its own payroll method. Ask payroll to explain the relationship rather than assuming every medical-period day is a separately paid workday. If the certificate crosses two payroll periods or a local minimum wage changes, split the worksheet. Preserve rounding rules and avoid changing approved dates to force a desired total.
Apply the eighty-percent floor as a comparison, not the formula
After applying the controlling local or contractual calculation, compare the result with the national floor of 80% of the applicable local minimum wage during the prescribed medical period. Write the comparison explicitly: local calculation amount, national floor amount and final amount before lawful deductions. Do not begin and end with “80%.” A local formula can produce more than the floor, and a contract or collective agreement can be more favourable. The floor does not establish that every absence day was valid or within the medical period.
If the calculation falls below the floor, ask payroll which rule, period or deduction explains the result and request a corrected worksheet where necessary. If payroll says the employee is outside the medical period, do not resolve that through the pay sheet alone; audit the separate service-year and accumulation ledger. If payroll says the absence was not approved sick leave, audit the employer evidence and leave decision. One correction may change another ledger, but the evidence and responsible owner should remain visible.
Resolve a payroll discrepancy without losing the source trail
Submit a written comparison with the pay period, approved leave dates, cited local rule, calculation base, rate, floor and requested correction. Attach only the medical evidence necessary to connect the dates; payroll usually does not need the full clinical file. Ask the employer to identify whether the dispute concerns attendance, service years, the local formula, the base, the rate, the minimum-wage floor or deductions. This narrows the correction and prevents a payroll issue from becoming an unsupported challenge to the diagnosis.
Keep original payslips, bank receipts, time records, employer decisions and corrected statements. If the employer changes its explanation, preserve both versions. A labor dispute may require proof that was under employer control, so request records before access is lost. Do not sign a “full settlement” without understanding the covered periods and claims. Use the responsible labor authority, arbitration route or qualified adviser where the discrepancy cannot be resolved administratively.
Prioritise treatment, then establish the payable absence record
If the worker needs urgent medical care, call 120 or use emergency treatment first. Payroll should not require a completed calculation before the employee receives care. The employee or representative should notify the employer as soon as reasonably possible and later submit an authorised medical certificate or diagnosis certificate through the stated sick-leave request route. Preserve the actual visit, recommended rest, submission time and employer response rather than changing dates to fit a closed payroll period.
Pay begins with the employer's recorded absence classification, but clinical evidence and approval are not the same record. Ask HR which dates were accepted, whether any days were coded as annual leave, unpaid absence or another category, and what was sent to payroll. A genuine document does not automatically approve all dates, while a manager's verbal approval may not update the wage system. Correct the absence ledger first if payroll calculated from the wrong category.
Reconcile six ledgers before deciding a number is wrong
Place the provider evidence, employee request, employer leave record, attendance data, sick-leave pay worksheet and statutory medical-period ledger side by side. Add a seventh file for return-to-work arrangements and an eighth for any work-injury question. Compare dates without forcing the records to be identical. The medical-period calendar can include rest days and statutory holidays, while payroll may calculate wage units under a local rule. A discrepancy is a question to investigate, not automatic proof of underpayment.
Assign an owner to each correction. The provider corrects its certificate, HR corrects approval and attendance, payroll corrects the wage worksheet, and the medical-period custodian corrects the protection ledger. Keep the old version, reason and effective date. This audit trail matters where a later labor dispute alleges that a payroll correction was used to rewrite service or absence history. One owner should not silently amend another institution's evidence.
Verify service-linked inputs without substituting the wrong record
Some local sick-pay rules use a form of service, continuous service or employer tenure. Read the controlling text for the exact concept and threshold. Gather the current labor contract, prior contracts where relevant, transfer or merger records, separation certificates and employer personnel data. Social-insurance contribution history can be useful evidence, but it should not automatically replace the service definition in the local rule. Record disputed periods and calculate alternative scenarios rather than hiding uncertainty.
Do not assume the service measure used for a local wage percentage is identical to total actual working years or current-employer service used in the national medical-period matrix. The labels may overlap in everyday speech while serving different legal calculations. Maintain separate input cells and cite the source for each. If the employee crosses a wage-rate threshold during an absence, check the local rule for the relevant reference date and seek qualified advice rather than changing rates mid-period without support.
Use the correct local minimum wage and effective date
Identify the minimum-wage standard applicable to the employee's work location and the specific payroll month. Save the official municipal or provincial notice, effective date and category if the jurisdiction uses more than one standard. When the minimum changes during a long absence, split the comparison by the periods controlled by each standard unless the local text directs otherwise. A current website value should not be retroactively applied to an earlier pay period without legal basis.
Calculate eighty percent of that local minimum as the national floor comparison during the prescribed medical period. Then compare it with the result produced by the local sick-leave formula and any more favourable contract or collective agreement. State whether amounts are monthly, daily or prorated and how the local rule converts them. Avoid advertising the monthly floor as a guaranteed take-home amount, because lawful deductions and partial-period methods may still require separate analysis.
Separate gross entitlement, deductions and net bank payment
A useful statement shows gross sick-leave wage or illness relief before deductions, each employee social-insurance contribution, individual income-tax treatment where applicable, other authorised deductions, employer contributions outside net pay, rounding and the final transfer. Ask which items were included in the calculation base and which were excluded. Overtime, reimbursement, discretionary bonus and special allowance should not be added or removed by habit; the governing local wage concept and employment instruments control.
If net payment is below eighty percent of the local minimum wage, do not conclude immediately that the gross statutory floor was breached. Rebuild the gross comparison and then inspect each deduction. Conversely, an employer should not use unexplained deductions to erase a mandatory gross floor. Preserve payslips and bank evidence. Tax and social-insurance treatment can be fact-specific, so use the responsible authority or qualified payroll and legal advisers where the worksheet remains uncertain.
Handle a foreign employee's payroll identity and mobility terms
Match the foreign employee's passport, work permit, residence permit, social-insurance identifier, labor or assignment document and payroll profile. A renewed passport or different name order can cause a payment or contribution mismatch without changing entitlement. Identify the China employer or domestic work unit responsible for the record. The foreign-employment rules place work time, rest, leave and social insurance within the national framework for a person in scope; they do not create a special lower sick-pay rate.
Review assignment allowances, tax equalisation, overseas benefits and home-country payroll separately from the mandatory China calculation. A mobility policy may be more favourable, but its payment should not obscure the local wage worksheet. Illness does not automatically extend the work permit or residence permit, and a payroll transfer does not prove current immigration status. Limit cross-border sharing of medical information; regional payroll usually needs the accepted leave code and amounts, not the employee's complete chart.
Remove work injury and occupational disease from the ordinary formula
Where the condition may result from work, preserve the recognition route before applying ordinary sick pay as the final classification. A recognised work injury can trigger suspension-of-work-with-pay, under which original wages and benefits follow the separate statutory regime, and later work-capacity assessment. An ordinary medical certificate, incident report or payroll code does not automatically establish recognition. Note the employer's usual thirty-day application period and the worker-side one-year route.
A statutory occupational-disease diagnosis also requires its qualified process. Do not use the non-work medical-period floor to settle a case that belongs to work-injury insurance, and do not assume a disputed work connection allows payroll to withhold all payment pending a final decision. Record any provisional treatment, adjustment after recognition and recovery of duplicate amounts under a lawful process. Obtain responsible-authority guidance where classification changes a substantial sum.
Carry the wage trail into return to work and any dispute
A phased return can combine work, approved sick leave and temporary restrictions in one payroll period. Document hours, duties, start and review dates, pay treatment and who approved each category. Managers should receive operational restrictions, not unnecessary sensitive personal information. The treating clinician supplies clinical recommendations, while the employer decides the job arrangement. A return-to-work date does not automatically close an unresolved underpayment or medical-period correction.
If the medical period ends and employment action is considered, keep sick-pay calculations separate from the Article 40 analysis of original work and other work arranged. Articles 42 and 45 may affect protection and fixed-term expiry, but are not absolute immunity. Preserve thirty-day notice or one-additional-month-wage calculations and economic compensation as different items from historical sick pay. This guide does not provide legal or tax advice; use the labor-dispute route and qualified professionals for a contested result.
Avoidable problems
Common mistakes
- Paying exactly eighty percent of ordinary salary merely because the national floor contains the number eighty.
- Using the current local minimum wage as the calculation base where the local rule uses another defined wage concept.
- Copying a Shanghai, Beijing, Guangdong or Shenzhen service formula into another city without authority.
- Using the payroll result to decide that the employee's medical period was exhausted.
- Calculating from certificate dates without confirming the employer's approved absence classification.
- Treating social-insurance contribution years as every service concept used by local wage and national medical-period rules.
- Applying a newly announced minimum wage to months before its official effective date.
- Comparing the net bank payment directly with a gross statutory floor without itemising deductions.
- Hiding a more favourable collective or contractual term behind the employer's default payroll rate.
- Continuing ordinary sick pay after a work injury has been recognised without reviewing the separate regime.
- Sending diagnosis details to an overseas payroll vendor that only needs the approved leave category.
- Combining historical sick-pay arrears, notice pay and economic compensation in one unexplained settlement line.
Common questions
Frequently asked questions
What does the national eighty-percent rule mean?
During the prescribed medical period, sick-leave wage or disease relief may be below the local minimum wage but may not be below eighty percent of that minimum. It is a floor, not the complete calculation.
Can a contract provide more than the local minimum?
Yes, a contract, collective agreement or lawful employer rule may be more favourable. The employer should identify the controlling term and apply it consistently with mandatory local and national protections.
Which city's minimum wage should be used?
Identify the rule governing the employment and work location for the relevant pay period. Do not select a city merely because the employer's headquarters or payroll vendor is located there.
Are weekends paid as separate sick-leave days?
The medical-period ledger and local payroll formula can use different counting methods. Read the current local wage rule and reconcile it with approved absence rather than assuming calendar counting answers pay.
Can payroll use social-insurance years to choose a sick-pay rate?
Only if the controlling rule and reliable evidence support that service concept. Contribution history may help prove facts but should not silently replace a differently defined service measure.
What happens when the local minimum wage changes mid-absence?
Preserve the old and new official standards and their effective dates, then split the calculation as the controlling text requires. Do not retroactively apply a later value by assumption.
Why can net sick pay be below the gross floor comparison?
Lawful employee contributions, tax or other authorised deductions may affect net payment. The employer should still disclose the gross statutory calculation and each deduction clearly.
Does a foreign employee receive a different national percentage?
No separate national foreigner percentage appears in the cited rules. Apply the controlling local rule and mandatory floor, then add any more favourable assignment or employment term.
Should ordinary sick pay continue if the condition is work-related?
Preserve interim payments, but review the work-injury recognition route and any suspension-of-work-with-pay consequences. A final classification should not be assumed from a payroll code.
Can an employer terminate employment because sick pay is expensive?
A wage cost does not replace the Labor Contract Law analysis. Medical-period protection, original and alternative work, notice, compensation and other statutory conditions require separate review.
Evidence
Sources consulted for this guide
National rules are separated from city and provider examples. Access dates show when a source was collected; source pages and procedures can change afterward.