Can you roster your Shanghai team for a Saturday shift and settle it with a flat bonus? Under China's employment law, overtime pay has minimum rates set by statute. In most cases, a flat bonus is not enough. In 2021, model cases from China's labour authorities confirmed that blanket 996 schedules are unlawful.
For Singapore-based companies, mainland China remains one of Asia's largest consumer and manufacturing markets, and hiring there is often the natural next step. Yet the obligations begin on day one. Employees have statutory working-time and rest protections, but the applicable limits and overtime premiums depend on their lawful working-hour system and local rules.
Miscalculation is rarely treated as innocent. Under-payment, over-limit rosters and missing approvals quietly accumulate into back-pay claims, administrative fines and dispute risk that cost far more than the overtime bill itself.
This guide explains the working-hour systems and legal caps employers should know before the first payslip runs. It covers the 150%, 200% and 300% rates and the formula for converting the applicable monthly overtime-pay base into an hourly rate. In this blog, we discuss how to run those calculations step by step, with a worked example and the Singapore schemes that can help fund your expansion.
Table of Contents
Which Laws and Regulations Govern Overtime in China?
Three layers of law matter: the Labour Law of the People's Republic of China, the State Council's working-time regulation, and implementation notices from the Ministry of Human Resources and Social Security (MOHRSS).
The Labour Law, adopted in 1994 and most recently amended in 2018, is the anchor. Article 36 sets the eight-hour day, Article 41 caps overtime after consultation with the union and affected workers, and Article 44 fixes minimum premium pay of 150%, 200% and 300% of the relevant wage.
The State Council's 1995 Regulation on Working Hours shortened the standard week to 40 hours, and it remains the benchmark today. A 2025 MOHRSS notice governs salary conversion into daily and hourly rates, retaining 21.75 paid days a month and replacing the 2008 notice. That number drives almost every calculation you will run.
Enforcement is not theoretical. In 2021, MOHRSS and China's Supreme People's Court jointly published model cases confirming that mandatory 996 rosters — 9am to 9pm, six days a week — breach the statutory overtime caps. Provinces and cities add their own implementation rules, so confirm the city-level position before you publish any staff handbook.
What Are the Legal Working-Hour Limits in China?
On the standard hours system: eight hours a day, 40 hours a week, at least one full rest day weekly, and a usual cap of 36 overtime hours a month, subject to statutory exceptions.
Article 41 of the Labour Law sets the arithmetic. Employers may generally extend working time by up to one hour a day. Where operations require it, employers must consult the union and affected workers before extending hours. For special reasons, daily overtime may reach three hours if workers' health is protected. The usual monthly limit is 36 hours. Article 42 exempts specified emergencies, urgent repairs and other statutory circumstances from Article 41's limits.
Two points trip up foreign employers. First, premium pay alone does not justify exceeding the 36-hour cap outside statutory exceptions. Second, Article 38 guarantees at least one full rest day each week, so check rosters against applicable local rules.
The table below summarises the limits that apply to staff on the standard hours system.
Working-Hour Limits Under the Standard Hours System
| Limit | Maximum | Source |
|---|---|---|
| Daily working time | Up to 8 hours | Labour Law, Article 36 |
| Weekly working time | Up to 40 hours | State Council 1995 working-time regulation |
| Weekly rest | At least one full rest day | Labour Law, Article 38 |
| Daily overtime | Generally 1 hour; up to 3 hours for operational needs, after consultation | Labour Law, Article 41 |
| Monthly overtime | 36 hours | Labour Law, Article 41 |
What Are China's Three Working-Hour Systems?
Chinese law recognises one default system and two government-approved alternatives, and overtime rights depend on which system lawfully covers each role.
Under China's overtime labour law, most employees follow the standard hours system. Hours beyond eight a day or 40 a week are generally overtime. The alternatives can ease payroll for eligible roles, but require prior approval from the competent authority under the applicable rules. Approvals typically run one to three years and must be renewed.
In practice, we find misclassification is the costliest error: when disputes arise, unapproved flexible arrangements are recalculated as overtime under the standard system, sometimes reaching back years.
1. Standard working-hours system
The default. Eight hours a day, 40 hours a week, one weekly rest day, and the full 150%, 200% and 300% overtime rates apply. Any role not covered by an approved alternative automatically falls here.
2. Comprehensive working-hours system
For roles with fluctuating schedules, such as shift manufacturing or transport crews. Hours are averaged over an approved cycle of a week, month, quarter or year. Time beyond the approved total counts as overtime, paid at 150%, while statutory-holiday work is paid at 300%.
3. Non-fixed working-hours system
For senior managers, field sales, drivers and similar self-directed roles. Once approved, ordinary overtime rules generally fall away. Some cities still require statutory-holiday top-ups, so check local rules before writing payroll policy.
How Do Employers Work Out Overtime Rates in China?
Determine the overtime-pay base under applicable local rules and lawful wage arrangements, then commonly divide it by 21.75 days and eight hours before applying the relevant multiplier.
For a monthly-paid employee, overtime calculations commonly start by converting the applicable monthly wage using 21.75 paid days. MOHRSS derived the figure from the calendar: 365 days minus 104 rest days leaves 261 paid days, and 261 divided by 12 months gives 21.75. Dividing the applicable monthly wage by 21.75 yields the average daily wage; dividing again by eight yields the hourly rate for the relevant multiplier.
One nuance matters for monthly-salaried staff on statutory holidays. Because the monthly salary already pays for those holidays, the 300% top-up is an additional payment. For daily-rated and hourly workers, check the applicable holiday pay and overtime rules rather than assuming that 300% covers the total payment. Contracts should state clearly which approach each category follows.
For the worked example, assume a monthly-paid employee on the standard working-hours system, with ¥10,000 as the lawful monthly overtime-pay base under applicable local rules and wage arrangements. The rest-day example assumes no compensatory rest; the holiday amount is additional to the monthly salary.
1. Set the base hourly rate
The formula is the applicable monthly overtime-pay base ÷ 21.75 ÷ 8. A ¥10,000 base produces an hourly rate of about ¥57.47. Determine the overtime-pay base under the applicable local rules and lawful wage arrangements, then use it for the relevant multipliers.
2. Apply the correct multiplier
Under the standard hours system, weekday extensions attract at least 150% of the hourly rate. Rest-day work attracts at least 200% unless compensatory rest is genuinely arranged. For staff on the standard hours system, statutory-holiday work attracts at least 300%, which compensatory rest cannot replace; check local rules for approved non-fixed schedules.
3. Prove the hours worked
Keep attendance records and payslips showing each overtime hour, the multiplier applied and the employee's sign-off. Wage records must be retained for at least two years for inspection, and in arbitration the employer usually carries the burden of producing them.
Statutory Overtime Pay Rates in Mainland China
| When the extra work falls | Minimum payment | Can compensatory rest replace it? |
|---|---|---|
| Ordinary working day | 150% of the hourly rate | No — payment is mandatory |
| Weekly rest day | 200% of the hourly rate | Yes, if compensatory rest is genuinely arranged |
| Statutory holiday | 300% of the hourly rate | No — payment is mandatory |
Which Days Must Be Paid at 300% in China?
For staff on the standard hours system, work on the 13 statutory holidays designated by the State Council attracts at least 300%; the list has stood at 13 days since 1 January 2025.
The current statutory holidays are:
- New Year's Day — 1 day
- Spring Festival — 4 days: Lunar New Year's Eve plus the first three days of the lunar new year
- Qingming Festival — 1 day
- Labour Day — 2 days
- Dragon Boat Festival — 1 day
- Mid-Autumn Festival — 1 day
- National Day — 3 days
Do not confuse these with the long public-holiday breaks. The State Council stretches many festivals by swapping adjacent weekends, but only the 13 core days trigger the statutory-holiday premium. Some swapped weekends become ordinary working days. For staff on the standard hours system, work on other non-statutory rest days in holiday breaks earns at least 200% if no compensatory rest is arranged.
Annual leave sits separately: employees with at least one year of service accrue 5 to 15 paid annual-leave days, depending on length of service. Family entitlements add further layers — see our guide to how maternity and marriage leave in China works.
What Happens If You Break China's Overtime Rules?
For employers that breach China's overtime rules, the penalties are straightforward: expect an order to pay what is owed, fines of RMB 100 to RMB 500 per affected worker, and additional compensation of 50% to 100% if ordered sums remain unpaid.
Labour inspectors operate under the Labour Security Supervision Regulations, which let them warn employers, demand correction of excessive hours and impose the per-worker fine. Separately, Article 85 of the Labour Contract Law adds the 50% to 100% uplift where ordered overtime pay stays unpaid past its deadline.
Employees do not need to stay silent. Unpaid-overtime claims go to labour arbitration; wage claims during employment face no limitation window, but a claim must generally be filed within one year of the employee leaving. Your records therefore matter long after the roster is gone.
Six steps to keep your China rosters compliant:
- Roster within eight hours a day and 40 a week, and track overtime against the 36-hour monthly cap.
- Obtain prior approval from the competent authority under applicable rules before using comprehensive or non-fixed hours systems, and renew it on time.
- Set out the overtime formula, rest-day rules and comp-rest policy in your bilingual staff handbook.
- Keep signed attendance and wage records for at least two years, ready for inspection.
- Confirm social insurance and housing-fund filings, which tie back to where each employee is registered under China's hukou household-registration system.
- Design schedules people can sustain: fair hours are also one of the simplest ways to manage employee retention in China.
Worked Example: Overtime Pay for a ¥10,000 Monthly Salary
| Item | Calculation | Amount |
|---|---|---|
| Base hourly rate | 10,000 ÷ 21.75 ÷ 8 | ¥57.47 |
| One weekday overtime hour | ¥57.47 × 1.5 | ¥86.21 |
| One rest-day hour, no comp rest | ¥57.47 × 2 | ¥114.94 |
| One statutory-holiday hour | ¥57.47 × 3 | ¥172.41 |
How Can Singapore Employers Fund Their China Expansion?
Enterprise Singapore's EDGE Grant supports eligible overseas market set-up and promotion. The Inland Revenue Authority of Singapore (IRAS) Double Tax Deduction for Internationalisation (DTDi) scheme provides qualifying tax relief.
Enterprise Singapore closed the Market Readiness Assistance (MRA) grant on 29 September 2026. From 30 September 2026, businesses can find EDGE activities through Enterprise Singapore or BizSG and apply via the Business Grants Portal. Until its closure, MRA supported eligible local SMEs at up to 70% of eligible costs from 1 April 2026. Support was capped at S$100,000 per company per new market. Ongoing MRA submissions and projects continue to be processed, and claims can still be submitted on completion.
EDGE applicants must be Singapore-registered businesses with at least 30% Singaporean or permanent-resident ownership. Activity-specific conditions also apply. For market-entry setup, the business must also operate in Singapore and must not have started work or paid a supplier, vendor or third party before applying. EDGE supports up to 70% of eligible internationalisation costs for SMEs and up to 50% for non-SMEs. Its S$100,000 annual cap covers all eligible activities and resets each 1 April.
The Double Tax Deduction for Internationalisation (DTDi) scheme covers qualifying expenses incurred between 1 April 2012 and 31 December 2030. These include overseas market development trips, overseas trade fairs and approved product or service certification. The automatic cap is S$150,000 per Year of Assessment (YA) for YA 2019 to YA 2026, rising to S$400,000 from YA 2027 after Budget 2026 enhancements. Market surveys and overseas business development join the automatic list from YA 2027, so keep the documentation IRAS may request.
Budget for payroll and compliance alongside grant support. If your Singapore entity is not yet in order, our Singapore company registration services page sets out the basics, or contact us to map a sequence that fits your timeline.
China's overtime framework is strict but predictable. Staff on the standard system work eight hours a day and 40 a week. Overtime is generally capped at 36 hours a month, subject to statutory exceptions. For standard-hours staff, applicable overtime is paid at minimum rates of 150%, 200% or 300%, with compensatory rest an alternative for rest-day work. For monthly-paid staff, the applicable wage base is commonly converted using 21.75 paid days. The 13 statutory holidays, the approval regime for non-standard hours systems and two-year record-keeping duties complete the picture.
Getting the calculations right from the first payslip is far cheaper than untangling them in arbitration. At Venture Overseas, we help clients plan their China hiring, draft compliant employment terms and connect with vetted local HR and legal specialists who know each city's implementation rules.
When you are ready to enter mainland China, Venture Overseas can help you plan the move. We can help you budget payroll and compliance costs and identify eligible Singapore expansion grants. A clear grip on the overtime rules is the right first step.
Plan Your China Expansion with Confidence
Speak with the Venture Overseas team about compliant hiring, rosters and payroll for mainland China, plus the funding support available to Singapore companies going global.
Frequently Asked Questions
Generally, the 36-hour monthly cap applies to staff on the standard hours system. Article 42 exempts specified emergencies, urgent repairs and other statutory circumstances from Article 41's limits. Outside those exceptions, paying premium rates does not legalise hours beyond the cap.
Generally yes, unless the role is covered by an approved non-fixed working-hours system. China has no broad managerial exemption of the kind found in some Western jurisdictions.
For staff on the standard hours system, compensatory rest can replace the 200% payment for rest-day work if genuinely arranged. Statutory-holiday work attracts at least 300%, which compensatory rest cannot replace; check local rules for approved non-fixed schedules.
Determine the overtime-pay base under applicable local rules and lawful wage arrangements. For a monthly-paid employee, commonly divide that base by 21.75, then by eight. A ¥10,000 base gives about ¥57.47 an hour before the relevant multiplier.
Labour inspectors can order back payment and fine employers RMB 100 to 500 per affected worker. Sums left unpaid after an order attract an extra 50% to 100% compensation, and claims can be pursued in arbitration for up to a year after an employee leaves.
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