How much does the endowment insurance unit pay from 20%?

Since 2022, China has reduced the contribution rate of pension insurance units from 20% to 16%, which has reduced the burden on enterprises and is conducive to stabilizing employment and promoting economic development.

Endowment insurance is an important part of social security system and an important means to safeguard the basic rights and interests of the elderly and social stability. In China, enterprises and employees pay the same fees, and the proportion of enterprises' contributions used to be 20%. However, with the development of economy and the aging of population in China, some problems in the old-age insurance system have gradually emerged, such as fund gap and old-age risk. To this end, China has decided to reduce the contribution ratio of pension insurance units from 20% to 16% from 2022, and cancel the storage ratio limit of retirees' personal medical insurance accounts. This policy adjustment not only lightens the burden on enterprises, but also helps to stabilize employment and promote economic development. The proportion of employees' individual contributions remains unchanged at 8%. It should be noted that the reform of the old-age insurance system takes time, and there may be some transitional adjustments and problems after the implementation of the new policy. In addition, lowering the proportion of unit contributions does not mean that enterprises can pay less social security fees, but should pay more social security fees for employees through other channels, such as raising wages.

After the payment ratio is lowered, can enterprises reduce or subsidize? At present, the policy doesn't specify the measures of tax reduction or subsidy for enterprises, but the government will take other measures to encourage enterprises to increase their investment in employee pension insurance. At the same time, the government will continue to strengthen the supervision and management of the income and expenditure of the social security fund to ensure the safety and sustainability of the fund.

The policy adjustment of reducing the contribution ratio of pension insurance units from 20% to 16% is conducive to reducing the burden on enterprises, stabilizing employment and promoting economic development, but it also requires the joint efforts of the government, enterprises and employees to ensure the stability and sustainability of the pension insurance system and ensure the basic life and social stability of the elderly.

Legal basis:

People's Republic of China (PRC) Social Insurance Law Article 28 Enterprises shall pay various social insurance premiums in accordance with state regulations. Among them, the enterprise shall pay the basic old-age insurance premium in proportion to the total wages of employees. The specific proportion shall be stipulated by the State Council.