Below you can find the translated English version of the Provisions on the Composition of Total Wages of the People’s Republic of China. The provisions were issued on January 1st, 1990, by the National Bureau of Statistics.
Chapter I General Provisions
Article 1 These Provisions are formulated for the purpose of unifying the scope for calculating total wages, ensuring the implementation of uniform statistical and financial accounting standards concerning wages by the State, fulfilling the compilation and inspection of plans, carrying out wage management and accurately reflecting employees’ wage income.
Article 2 When calculating the scope of total wages in terms of planning, statistics and accounting, state-owned enterprises, collective ownership enterprises, public institutions, various types of joint ventures, State authorities, party organs and social organizations at all levels shall comply with these Provisions.
Article 3 Total wages shall be defined as the total labor remuneration directly paid by an employer to all its employees during a certain period of time. The basis for calculating total wages shall be all direct payments to employees by the Employer.
Chapter II Composition of Total Wages
Article 4 Total wages shall be composed by the following six parts:
(1) hourly wages;
(2) piecework wages;
(4) allowance and subsidies;
(5) overtime wages; and
(6) wages paid under special circumstances.
Article 5 Hourly wages shall refer to the labor remuneration paid to individuals according to the standard for hourly wages, including regional living cost subsidies, and working hours. Hourly wages include:
(1) wages paid for accomplished work according to the hourly wage standard;
(2) basic wages and position(post) wages paid to employee by employers implementing structural wage system;
(3) internship wages for new recruits (living expense of apprentices); and
(4) allowances for athletes.
Article 6 Piecework wages shall refer to the labor remuneration paid for accomplished work according to the unit price of piecework. Piecework wages include:
(1) wages paid to individuals by employers implementing wage systems such as excess progressive wage, limitless direct calculation of piecework, piecework wage calculation according to specific amounts and piecework wage calculation in excess of specific amounts, according to the quota and the unit price of a piecework approved by labor departments or competent departments;
(2) wages paid to individuals by means of task-division and assignment; and
(3) wages paid to individuals by means of sales volume or profit commissions.
Article 7 Bonus shall refer to the labor remuneration paid to employees for their extra efforts and their work to increase the source of income and reduce expenditure, including:
(1) Production bonus;
(2) Bonus for thrift;
(3) Labor competition bonus;
(4) Incentive wages of organs and public institutions; and
(5) Other bonuses.
Article 8 Allowance and subsidies shall refer to the allowance paid to employees as compensation for their special or additional labor or for other special causes, and the inflation subsidies paid to employees to guarantee that their wage level is not influenced by price fluctuations.
(1) Allowances include: payments made to compensate employees for their special or additional labor consumption; health-care allowance; technical allowance; seniority allowance; other allowances; and
(2) Inflation subsidies include: payments made to guarantee that employees’ wage level is not influenced by increases or fluctuations of prices.
Article 9 Overtime wages shall refer to the wages paid for work on designated non-working days and extended working hours according to the relevant provisions.
Article 10 Wages paid under special circumstances include:
(1) Wages paid in accordance with the provisions of State laws, regulations and policies, wages paid according to the hourly wage standard or a certain proportion of such standard for illness, work-related injury, maternity leave, leave for family planning, wedding leave, funeral leave, private affair leave, home leave, regular leave, leave for further education, performance of national or social obligations and other relevant reasons; and
(2) Supplementary wages and reservation wages.
Chapter III Items Excluded from the Scope of Total Wages
Article 11 The following items shall not be listed into the scope of total wages:
(1) Awards for creations and inventions, natural science awards, scientific and technological progress awards, prizes paid for offering rationalization proposal concerning technical improvements as well as bonuses to athletes and coaches in accordance with the relevant provisions promulgated by the State Council;
(2) Expenses related to labor insurance and employee benefits;
(3) Expenditures related to the benefits of retired and resigned persons;
(4) Expenditures incurred for labor protection;
(5) Author’s remuneration, payment for giving lectures and remuneration for other specialized work;
(6) Food allowance during business trips, meal allowance, travel expenses for transfer of work and settling-in allowance;
(7) Compensation to employees for using their own tools or livestock to work for employers;
(8) Compensation to lessees of employers implementing lease management for their risk-taking;
(9) Dividends and interest paid to employees who have purchased shares and bonds issued by their employers;
(10) Medical and living cost subsidies paid by enterprises to their employees under the system of labor contracts when terminating their contracts;
(11) Handling charges or management fees paid to labor dispatching companies for recruitment of part-time workers, excluding wages;
(12) Processing charges paid to family workers and expenses for contract awards paid to contractors according to processing and ordering methods;
(13) Subsidies paid to students that participate in enterprise work but have not graduated; and
(14) One-child allowance under the family planning system.
Article 12 All items listed in the preceding Article shall be calculated according to the relevant State provisions separately.
Chapter IV Supplementary Provisions
Article 13 The calculation of the scope of total wages of private organizations, organizations owned by overseas Chinese, industrialists and businessmen in Hong Kong, Macau and Taiwan, and foreign-owned organizations shall refer to these Provisions.
Article 14 The National Bureau of Statistics is responsible for the interpretation of these Provisions.
Article 15 All regions and departments may formulate provisions on the specific composition scope of total wages based on these Provisions.
Article 16 These Provisions shall come into force on the date of promulgation. Interim Provisions on the Composition of Total Wages approved and promulgated by the State Council on May 21, 1955 shall be simultaneously abolished.