Foreign employers often underestimate how China’s leave rules shape their payroll and HR compliance. Unlike many jurisdictions where time off is a single discretionary policy, China splits it into two distinct layers: statutory public holidays fixed by the State Council, and paid annual leave that employees accrue based on their total years of work experience. Getting either layer wrong — misjudging entitlement, miscounting unused leave, or skipping the required compensation — routinely triggers labor disputes, back-pay claims, and penalties during a tax or social insurance audit. This guide explains both systems in plain terms for foreign companies employing staff in Guangzhou, Shenzhen, Foshan, Dongguan, and across China, so you can budget, schedule, and pay correctly from day one.
- China grants 13 statutory public holidays in 2026, up from 11, following the 2025 State Council revision.
- Paid annual leave is earned by total work experience, not tenure at your company: 5, 10, or 15 days.
- Statutory holidays and rest days are separate from annual leave and never reduce it.
- If you fail to arrange accrued leave, you owe 300% of daily wage per unused day.
- The rules apply nationwide and are strictly enforced across Guangzhou, Shenzhen, Foshan, and Dongguan.
China’s 13 statutory public holidays in 2026
China’s paid public holidays are set nationally by the State Council. In late 2024 the Council amended the official holiday schedule, effective from 2025, raising the annual total from 11 to 13 days. Spring Festival gained a fourth day (Lunar New Year’s Eve was added), and Labor Day gained a second day. The full 2026 list is below.
| Holiday | 2026 dates | Statutory days |
|---|---|---|
| New Year’s Day | January 1 | 1 day |
| Spring Festival (Chinese New Year) | February 16–19 | 4 days |
| Qingming Festival | April 5 | 1 day |
| Labor Day | May 1–2 | 2 days |
| Dragon Boat Festival | June 19 | 1 day |
| Mid-Autumn Festival | September 25 | 1 day |
| National Day | October 1–3 | 3 days |
The dates above are the statutory days themselves. Each year the State Council also publishes an arrangement that extends several holidays into longer breaks by shifting adjacent weekend days and designating makeup workdays. For example, Spring Festival and National Day are routinely observed as roughly week-long blocks. The key point for payroll is that these 13 days are paid and mandatory — an employer cannot substitute them for annual leave or require employees to work through them without proper overtime or compensatory arrangements.
Paid annual leave: the three entitlement tiers
China’s paid annual leave system is governed by the Regulation on Paid Annual Leave for Employees, which applies to employees who have accumulated more than one year of work experience. Entitlement rises in three fixed tiers based on total accumulated working years, not years spent with your company.
| Total accumulated working years | Annual paid leave |
|---|---|
| 1 to less than 10 years | 5 days |
| 10 to less than 20 years | 10 days |
| 20 years or more | 15 days |
Employees with one year of experience or less are not yet entitled to statutory annual leave, though many employers choose to offer probationary or discretionary leave as a benefit. Once an employee crosses the one-year threshold, the entitlement applies on a pro-rata basis for the remainder of that calendar year.
How annual leave actually accrues
The most common mistake foreign employers make is counting only time served at their own company. Under Chinese law, “accumulated working years” means an employee’s entire career, including previous employers — so a new hire with twelve years of prior experience enters your payroll already entitled to 10 days, not 5. Verifying this at onboarding is part of setting up a compliant China employment contract with the correct mandatory clauses.
A few practical accrual points worth remembering:
- Annual leave is normally taken within the calendar year, but employers may carry unused days into the following year with the employee’s consent.
- Probation-period employees still accrue leave if their total career experience exceeds one year.
- Part-time or non-full-time workers are generally outside the statutory annual leave system, so their arrangements are contractual.
- New employees are entitled to a pro-rated share of annual leave in their first calendar year of eligibility.
The 300% unused-leave rule
If production needs genuinely prevent an employee from taking their accrued annual leave, the law requires the employer to compensate the unused days at 300% of the employee’s daily wage. This figure already includes the 100% of ordinary salary the employee received for working those days, so the true additional cost to the employer is 200%. The only way to avoid the penalty is to obtain a written waiver from the employee confirming they voluntarily chose not to take the leave — in that case you owe only normal wages, not the 300% compensation.
Because unused-leave pay is taxed as ordinary employment income and must be withheld correctly, it belongs in the same monthly process as your China payroll compliance routine rather than handled ad hoc at year-end.
What does not count as annual leave
Several categories of time off are legally distinct from annual leave and should not be deducted from it:
- Statutory holidays — the 13 days listed above are additional to annual leave.
- Rest days — weekly rest days are separate from annual leave.
- Statutory leave for specific circumstances — maternity leave, marriage leave, bereavement leave, and sick leave all run independently of annual leave.
There is one important exception in the other direction: employees who take extended non-work-related sick leave of 20 days or more in a year, or who have long statutory winter or summer vacations, may have their annual leave entitlement reduced or eliminated for that year. Keeping accurate leave records is therefore essential, because a labor inspection or dispute will always come down to documented proof of what was scheduled, taken, and paid.
Leave compliance across Guangzhou, Shenzhen, Foshan, and Dongguan
Leave entitlement itself is national, so the 13 statutory holidays and the 5/10/15-day annual leave tiers are identical whether your staff sit in Guangzhou, Shenzhen, Foshan, or Dongguan. What differs is how enforcement and social insurance administration play out locally, and how leave interacts with local payroll filings.
Shenzhen and Guangzhou, as first-tier commercial centers, see rigorous labor inspections and a high volume of arbitration claims from white-collar employees over unused leave and unpaid compensation. Foshan and Dongguan, with their dense manufacturing and supplier ecosystems, concentrate disputes in production and shift-based roles, where scheduling make-up days around Spring Festival and National Day is the biggest operational challenge. Whichever city you operate in, the safest approach is to treat leave as a scheduled, documented, and paid line item in every monthly payroll cycle, and to review policies whenever you are hiring employees in China.
For companies that employ staff without a local entity — for example through an Employer of Record (EOR) arrangement — leave administration and the associated payroll withholding are typically handled by the provider, but you should still confirm the entitlement basis is applied correctly. If you manage payroll in-house, Dan Young’s HR and payroll services in Guangzhou can help you calculate leave accrual, withhold the correct amounts, and stay audit-ready across the Pearl River Delta.
Frequently asked questions
How many paid public holidays does China have in 2026?
China has 13 statutory public holidays in 2026, following a 2025 State Council revision that added a fourth Spring Festival day and a second Labor Day. The total rose from the previous 11 days.
How much annual leave are employees in China entitled to?
Employees with more than one year of total work experience are entitled to 5 days of paid annual leave for 1 to 9 accumulated working years, 10 days for 10 to 19 years, and 15 days for 20 or more years.
Is annual leave based only on time at my company?
No. Accumulated working years include all prior employment, so a new hire with prior experience arrives already entitled to a higher tier. Counting only company tenure is the most common compliance error.
What happens if we cannot let an employee take their annual leave?
You must compensate each unused day at 300% of the employee’s daily wage, which already includes the normal salary already paid — effectively 200% extra. A written employee waiver of the leave avoids this penalty.
Do foreign employees get the same annual leave as local staff?
Yes. Once a foreign employee holds a valid work permit and an employment relationship in China, the statutory annual leave rules apply on the same basis as for local employees.
Disclaimer: This article is provided for general informational purposes only and does not constitute legal, tax, or HR advice. Leave entitlement, compensation calculations, and enforcement can vary by individual circumstance and may be affected by subsequent regulatory changes. For advice specific to your company’s situation, consult a qualified professional such as Dan Young Business Consultancy.
