Differences of Social Security between Private Enterprises and State-owned Enterprises

The difference of social security between private enterprises and state-owned enterprises;

1, payment base and proportion. Private enterprises usually pay social security for employees according to the minimum payment base; State-owned enterprises usually use the actual wages of employees as the payment base, which means that their social security contributions are relatively high.

2. Supplementary insurance system. State-owned enterprises often establish more perfect supplementary pension insurance and medical security mechanisms, which is helpful to improve pension benefits and medical security after retirement.

3. Fairness. Due to the different base and proportion of social security contributions, there may be a gap in the pension benefits for employees of private enterprises and state-owned enterprises after retirement.

4. Impact and challenges. The way to determine the base of social security payment is directly related to the pension benefits of employees after retirement.

What does employee social security include?

1. Old-age insurance: the minimum requirement for old-age insurance is 15 years, and the corresponding pension benefits can only be enjoyed after reaching the legal retirement age. China's enterprise annuity consists of basic pension and personal account pension.

2. Medical insurance: The insured of employee medical insurance can enjoy relevant medical insurance benefits while paying medical insurance premiums, and can use medical insurance for a certain proportion of reimbursement during medical treatment.

3. Unemployment insurance: If the insured suspends his employment for non-personal reasons, he may apply for unemployment insurance during the employment period and pay unemployment insurance 1 year with the original unit, and complete unemployment registration and job registration.

4. Maternity insurance: Female participants in maternity insurance can enjoy reimbursement of maternity insurance fund and maternity allowance, while male participants can apply for reimbursement of maternity expenses for their spouses and get certain subsidies.

5. Work-related injury insurance: Work-related injury insurance can provide corresponding economic compensation for the insured and their families who suffer from work-related injuries, occupational diseases, work-related disability and work-related death.

To sum up, both private enterprises and state-owned enterprises need to abide by the provisions of the Social Insurance Law and pay the same type of social security (five insurances). However, in practice, due to the different payment base and proportion, as well as the different supplementary insurance systems, the actual difference between them in social security payment is significant.

Legal basis:

People's Republic of China (PRC) social insurance law

Article 10

Employees shall participate in the basic old-age insurance, and the employer and employees shall jointly pay the basic old-age insurance premium. Individual industrial and commercial households without employees, part-time employees who have not participated in the basic old-age insurance in the employer and other flexible employees can participate in the basic old-age insurance, and individuals pay the basic old-age insurance premium. The measures for the endowment insurance of civil servants and staff managed by reference to the Civil Service Law shall be formulated by the State Council.