Payroll Service Agreement Sample for China
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China Payroll Service Agreement Guide
Sample Payroll Service Agreement for China
This Payroll Service Agreement (the "Agreement") is made and entered into on this [Day] day of [Month], [Year] (the "Effective Date"), by and between:
Client (Party A):
[Client's Full Legal Name]
[Client's Registered Address]
[Client's Legal Representative Name and Title]
(hereinafter referred to as "Party A")
AND
Service Provider (Party B):
Bestar Consulting Limited
[Service Provider's Registered Address]
[Service Provider's Legal Representative Name and Title]
(hereinafter referred to as "Party B")
Party A and Party B are hereinafter collectively referred to as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, Party A requires professional payroll management services in the People's Republic of China;
WHEREAS, Party B possesses the necessary expertise, licenses, and resources to provide such payroll services in compliance with Chinese laws and regulations;
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the Parties agree as follows:
1. SCOPE OF SERVICES
Party B shall provide the following payroll services to Party A in relation to Party A's employees in the People's Republic of China (the "Services"):
1.1. Payroll Calculation and Processing:
Calculate gross and net salaries, wages, overtime pay, bonuses, commissions, and other emoluments for Party A's employees based on data provided by Party A.
Calculate individual income tax (IIT) payable by employees in accordance with applicable Chinese tax laws and regulations.
Calculate mandatory social insurance contributions (including but not limited to pension, medical, unemployment, work-related injury, and maternity insurance) for both employer and employee portions, in accordance with local regulations of the relevant Chinese cities.
Calculate housing provident fund contributions for both employer and employee portions, in accordance with local regulations of the relevant Chinese cities.
Process and manage various types of leave (e.g., annual leave, sick leave, maternity leave) as per Party A's policies and Chinese labor laws.
Generate and provide accurate payslips (electronic or physical) to Party A's employees.
1.2. Statutory Filings and Payments:
Prepare and submit monthly and annual IIT declarations to the competent tax authorities.
Prepare and submit monthly reports for social insurance and housing provident fund contributions to the relevant government bureaus.
Facilitate the timely payment of net salaries to employees' designated bank accounts.
Facilitate the timely payment of IIT, social insurance, and housing provident fund contributions to the respective government authorities. Party A shall ensure sufficient funds are transferred to Party B's designated account for these payments by the agreed deadlines.
1.3. Employee Onboarding and Offboarding Support:
Assist with the registration and de-registration of employees with social insurance and housing provident fund authorities.
Calculate and process final payments, including outstanding salaries, untaken leave, and statutory severance pay (if applicable), for terminated employees.
1.4. Record Keeping and Reporting:
Maintain accurate and confidential payroll records for all employees in compliance with Chinese legal requirements for the statutory retention period.
Provide Party A with monthly payroll reports, social insurance and housing provident fund reports, and other customized reports as mutually agreed upon.
1.5. Compliance and Advisory:
Monitor changes in Chinese labor laws, individual income tax regulations, and social insurance/housing provident fund policies, and inform Party A of any relevant updates impacting payroll.
Provide general guidance to Party A on payroll-related compliance matters in China.
Act as a point of contact for routine payroll inquiries from Party A's employees, referring complex issues back to Party A as necessary.
2. PARTY A'S RESPONSIBILITIES
2.1. Provision of Information: Party A shall provide Party B with all necessary and accurate employee data, including but not limited to new hires, terminations, salary changes, attendance records, leave records, bonus information, employee bank details, and any other data required for payroll processing, by the deadlines specified in Schedule A (Service Level Agreement/Timeline).
2.2. Fund Transfers: Party A shall ensure that sufficient funds for net salaries, IIT, social insurance, and housing provident fund contributions are transferred to Party B's designated bank account in a timely manner, as per the payment schedule outlined in Schedule A.
2.3. Legal Compliance: Party A remains solely responsible for ensuring its employment contracts, internal policies, and overall business practices comply with all applicable Chinese labor laws and regulations.
2.4. Designated Contact: Party A shall designate a primary contact person to liaise with Party B regarding all payroll matters.
3. PARTY B'S RESPONSIBILITIES
3.1. Accuracy and Timeliness: Party B shall process payroll accurately and disburse salaries and statutory contributions in a timely manner, adhering to the schedule outlined in Schedule A.
3.2. Confidentiality: Party B shall maintain strict confidentiality regarding all Party A's business information and employee personal data obtained during the performance of the Services. Party B shall not disclose such information to any third party without Party A's prior written consent, except as required by law.
3.3. Compliance: Party B shall perform the Services in strict compliance with all applicable laws, regulations, and governmental policies of the People's Republic of China, including but not limited to labor laws, tax laws, social insurance regulations, and data privacy laws.
3.4. Data Security: Party B shall implement and maintain appropriate technical and organizational measures to protect Party A's and its employees' data against unauthorized access, disclosure, alteration, or destruction.
3.5. Professional Conduct: Party B shall perform the Services with reasonable care, skill, and diligence, utilizing qualified personnel.
4. FEES AND PAYMENT TERMS
4.1. Service Fees: Party A shall pay Party B fees for the Services as detailed in Schedule B (Fee Schedule).
4.2. Invoicing and Payment: Party B shall issue invoices to Party A monthly on or before [Date]. Party A shall pay all undisputed invoices within [Number] days of the invoice date.
4.3. Late Payments: In the event of late payment, Party B reserves the right to charge interest on overdue amounts at a rate of 0.05% per day or the maximum rate permitted by law, whichever is lower.
4.4. Fee Review: The Parties shall review the service fees annually, and any adjustments shall be mutually agreed upon in writing.
5. TERM AND TERMINATION
5.1. Term: This Agreement shall commence on the Effective Date and shall remain in force for an initial term of one (1) year (the "Initial Term"), unless terminated earlier in accordance with the provisions herein.
5.2. Renewal: This Agreement shall automatically renew for successive one (1) year terms (each a "Renewal Term") unless either Party provides written notice of non-renewal to the other Party at least sixty (60) days prior to the end of the then-current term.
5.3. Termination for Cause: Either Party may terminate this Agreement immediately by written notice to the other Party if:
The other Party commits a material breach of any provision of this Agreement and fails to remedy such breach within thirty (30) days after receiving written notice thereof.
The other Party becomes insolvent, files for bankruptcy, or goes into liquidation.
Required by law or government directive.
5.4. Termination for Convenience: [Optional Clause: Either Party may terminate this Agreement for convenience by providing ninety (90) days' prior written notice to the other Party.]
5.5. Effects of Termination: Upon termination of this Agreement for any reason:
Party A shall pay all outstanding fees and expenses incurred up to the effective date of termination.
Party B shall cease all Services and promptly return to Party A all of Party A's data, records, and confidential information, or destroy such information as instructed by Party A, and certify such destruction.
Clauses related to Confidentiality, Indemnification, Governing Law, and Dispute Resolution shall survive the termination of this Agreement.
6. CONFIDENTIALITY AND DATA PROTECTION
6.1. Confidential Information: Both Parties agree that any non-public information, including but not limited to business plans, financial data, employee data, trade secrets, and operational methods, disclosed by one Party to the other, shall be considered confidential ("Confidential Information").
6.2. Non-Disclosure: Each Party agrees not to disclose, reproduce, or use for any purpose other than the performance of this Agreement any Confidential Information of the other Party without prior written consent.
6.3. Data Privacy: Party B acknowledges its obligation to comply with all applicable Chinese data protection and cybersecurity laws (e.g., Personal Information Protection Law, Data Security Law) in processing Party A's and its employees' personal information. Party B shall implement appropriate security measures to protect personal data and shall notify Party A without undue delay in case of any data breach.
7. INDEMNIFICATION AND LIMITATION OF LIABILITY
7.1. Indemnification by Party B: Party B shall indemnify and hold harmless Party A from and against any and all claims, liabilities, damages, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with Party B's gross negligence, willful misconduct, or material breach of this Agreement, or Party B's non-compliance with applicable Chinese laws in performing the Services.
7.2. Indemnification by Party A: Party A shall indemnify and hold harmless Party B from and against any and all claims, liabilities, damages, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with Party A's provision of inaccurate or incomplete data, Party A's non-compliance with applicable Chinese labor laws, or Party A's breach of this Agreement.
7.3. Limitation of Liability: EXCEPT FOR LIABILITY ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR BREACH OF CONFIDENTIALITY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REVENUE, DATA, OR BUSINESS OPPORTUNITY) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. THE TOTAL CUMULATIVE LIABILITY OF PARTY B TO PARTY A UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS SHALL NOT EXCEED THE TOTAL FEES PAID BY PARTY A TO PARTY B IN THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
8. FORCE MAJEURE
Neither Party shall be liable for any delay or failure in performance of its obligations under this Agreement if such delay or failure is caused by an event beyond its reasonable control, including but not limited to acts of God, war, acts of terrorism, riots, embargoes, fires, floods, earthquakes, pandemics, epidemics, or government regulations. The affected Party shall promptly notify the other Party of the force majeure event and use reasonable efforts to resume performance.
9. GOVERNING LAW AND DISPUTE RESOLUTION
9.1. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the People's Republic of China, without regard to its conflict of laws principles.
9.2. Dispute Resolution: Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall first be resolved through friendly negotiation between the Parties.
Should negotiation fail, the Parties agree to submit the dispute to arbitration in [City in China, e.g., Shanghai / Beijing] in accordance with the rules of the China International Economic and Trade Arbitration Commission (CIETAC) then in effect. The arbitration award shall be final and binding upon both Parties.
Alternatively, for court litigation: Should negotiation fail, the Parties agree to submit the dispute to the exclusive jurisdiction of the competent people's court in [City in China, e.g., the district where Party B is registered].
10. MISCELLANEOUS
10.1. Entire Agreement: This Agreement, together with its Schedules, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written.
10.2. Amendments: No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties.
10.3. Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
10.4. Notices: All notices required or permitted under this Agreement shall be in writing and delivered by registered mail, courier, or email with confirmation of receipt to the addresses set forth above or to such other address as either Party may designate in writing.
10.5. Language: This Agreement is executed in English and Chinese. In the event of any discrepancy, the English version shall prevail.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
PARTY A:
[Client's Full Legal Name]
By: ___________________________
Name: [Authorized Representative Name]
Title: [Authorized Representative Title]
PARTY B:
Bestar Consulting Limited
By: ___________________________
Name: [Authorized Representative Name]
Title: [Authorized Representative Title]
SCHEDULE A: SERVICE LEVEL AGREEMENT & TIMELINE
Party A Data Submission Deadline: 5th of each month
Payroll Calculation Completion by Party B: 10th of each month
Payroll Review by Party A: 12th of each month
Fund Transfer by Party A for Salaries/Taxes/Funds: 15th of each month
Salary Disbursement to Employees by Party B: 18th of each month
Statutory Contribution Payments by Party B: By 25th of each month (or as per local authority deadlines)
Monthly Reports Delivery: By 5th business day of the following month
SCHEDULE B: FEE SCHEDULE
Basic Payroll Processing (per employee per month): RMB [Amount]
Includes: Salary calculation, IIT calculation, Social Insurance & Housing Fund calculation, payslip generation.
Statutory Filings (monthly fixed fee): RMB [Amount]
Includes: Submission of IIT, Social Insurance, and Housing Fund declarations.
New Hire Onboarding (per employee): RMB [Amount]
Includes: Initial registration with social insurance/housing fund.
Employee Termination (per employee): RMB [Amount]
Includes: Final payment calculation, de-registration.
Ad-hoc Reports/Consultation (hourly rate): RMB [Amount]
Out-of-pocket expenses (e.g., government fees, courier fees): Reimbursable at cost.
Minimum Monthly Fee: RMB [Amount]