Do social security fees count as wages and benefits?

Accounting treatment: According to the Notice on Strengthening Financial Management of Employee Welfare Expenses in Enterprises [2009] No.242, 1. Enterprise employee welfare expenses refer to the welfare expenses provided by enterprises for employees except wages, bonuses, allowances, subsidies included in the total wage management, employee education funds, social insurance premiums, supplementary pension insurance premiums (annuities), supplementary medical insurance premiums and housing accumulation funds, including the following cash subsidies and payments to employees. Therefore, accounting should be payroll accounting. Tax treatment: According to Article 35 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC), the basic social insurance premiums and housing accumulation fund paid by enterprises for employees in accordance with the scope and standards stipulated by the relevant competent departments of the State Council or the provincial people's government are allowed to be deducted. Supplementary endowment insurance premiums and supplementary medical insurance premiums paid by enterprises for investors or employees are allowed to be deducted within the scope and standards stipulated by the competent departments of finance and taxation of the State Council. Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on the deduction of wages and salaries and employee welfare expenses; Guoshuihan [2009] No.3; 2. About the total wages and salaries? The total wages mentioned in Articles 40, 41 and 42 of the Implementing Regulations refer to the total wages actually paid by enterprises in accordance with the provisions of Article 1 of this Notice, excluding social insurance premiums and housing accumulation funds such as employee welfare funds, employee education funds, trade union funds, old-age insurance, medical insurance, unemployment insurance, work injury insurance and maternity insurance. That is to say, the tax law stipulates that social security fees and provident fund are neither the total wages and salaries (not as the basis for calculating the limit of welfare fees) nor the scope of welfare fees, but are collected directly before income tax.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.