Housing Fund Amendment 2026: 6 Employer Compliance Points

On September 20, 2026, the State Council’s Decision on Amending the Regulations on the Administration of Housing Provident Funds (State Council Order No. 844) came into force. This article is my personal analysis as the author, Danica Mai — the views expressed below are my own professional opinions, drawn from the amended Regulations and from years of advising foreign-invested enterprises in South China, and they do not constitute legal advice. Below are the six points I believe every employer with staff in China should understand.

1. Which employees must be enrolled in the housing provident fund?

Article 2 of the Regulations on the Administration of Housing Provident Funds provides that state organs, state-owned enterprises, urban collective enterprises, foreign-invested enterprises, urban private enterprises and other urban enterprises, public institutions, private non-enterprise units, social organizations and their in-service employees shall contribute to the housing provident fund.

In daily HR practice, the key test is whether the worker is an in-service employee of the unit. Employees still in their probation period remain in-service employees — probation is not a ground for skipping contributions. Likewise, agricultural household registration (rural hukou) is not an exemption: the current Regulations do not divide mandatory scope along urban-rural lines, so migrant workers who have an employment relationship are in principle required to be enrolled.

The amendment adds a new Article 49: individual industrial and commercial households, part-time employees and other flexible workers may contribute voluntarily, with the specific measures set by the local people’s governments at or above the level of a city divided into districts. Note that this is voluntary participation — it does not bring those groups into the unit’s mandatory scope.

Several boundary cases deserve attention. Dispatched workers remain in-service employees, and the obligation in principle falls on the labor-dispatch agency that has the employment relationship with them. Workers beyond retirement age, rehired retirees and pure labor-service relationships are not mandatory participants. Part-time employment is now expressly classified as voluntary — different from the mandatory rule for full-time employment relationships.

For foreign employers building a China payroll for the first time, this is the same logic that applies to social insurance enrollment for foreign-invested enterprises — once a local employment relationship exists, mandatory benefits follow.

2. How is the contribution ratio determined?

Article 18 of the amended Regulations provides that the contribution ratio for both the employee and the unit shall be no less than 5% of the employee’s monthly average wage of the previous year and no more than the maximum ratio prescribed by the state. The specific ratio is drafted by the housing provident fund management committee, reviewed by the people’s government at the same level, and submitted to the provincial-level people’s government for approval.

Compared with the former Regulations, the amendment deletes the sentence that “cities with conditions may appropriately raise the contribution ratio” and adds the cap of “not exceeding the maximum ratio prescribed by the state”.

In practice most cities still set ratios within the 5% to 12% band, but companies should never rely on the Regulations alone — always check the local housing fund notice for the current year.

Shenzhen’s rules contain several points worth noting. First, the unit ratio is currently 5% to 12%, and the same unit should in principle apply one unified ratio — different unit ratios for different employees are not allowed. Second, the employee’s personal ratio in principle mirrors the unit’s, but Shenzhen permits employees to voluntarily raise their personal ratio within the prescribed range: if the unit contributes at 5%, an employee may apply to contribute at 8%, 10% or 12%, bearing the extra amount personally. Third, under Shenzhen’s current rules, an employee paid at the local minimum wage must still be enrolled by the unit, but the employee may apply to be exempted from the personal portion.

3. How is the contribution base determined?

Article 16 provides that the employee’s monthly contribution is the employee’s monthly average wage of the previous year multiplied by the employee’s ratio, and the unit’s monthly contribution is the same wage base multiplied by the unit’s ratio. Newly hired employees start contributing from the second month of employment, based on that month’s wage; employees transferred from another unit start from the date the receiving unit pays their wages.

The most common risk I see in practice is not a total failure to contribute — it is contributing for years on a base that is obviously lower than the employee’s real wage. Suppose an employee’s monthly average wage last year was RMB 20,000 while the company has long contributed on a fixed RMB 5,000 base (or the minimum wage). Even if this base is written into the employment contract, and even if the employee signed a confirmation, it does not change the statutory contribution base.

For larger employers, the housing fund risk is usually not a wrong ratio but a fixed low base carried over for years — which eventually turns into batch make-up contributions across the workforce. This is also why a disciplined, well-documented payroll compliance process in China pays for itself.

4. Employees who “voluntarily give up” the housing fund

Some companies face employees who ask not to be enrolled so that the unit’s share can be converted into cash and added to their take-home pay. Some companies even ask employees to sign a “voluntary waiver of the housing provident fund”. In my experience, this approach does not hold up against the housing fund authority.

Article 13 requires the unit to register with the fund and open accounts for employees; Article 19 requires the personal portion to be withheld from wages; Article 20 requires timely and full payment without arrears or underpayment. A waiver signed by the employee therefore cannot release the company from its statutory obligation — and paying the unit’s share out in cash does not substitute for lawful contributions. If the employee later complains to the housing fund management center, the company may still be ordered to make up the contributions.

This must be distinguished from the social-insurance resignation issue. Article 38 of the Labor Contract Law allows an employee to terminate the contract when the employer fails to pay social insurance premiums — the housing provident fund is not a social insurance premium within the meaning of that article. Arrears in the housing fund alone do not give rise to the Article 38 resignation-plus-economic-compensation route; the main exposure is administrative orders to make up contributions, enforcement, and the resulting compliance burden. The contract-layer risks around termination clauses are covered separately in our guide to mandatory employment contract clauses in China.

5. Can employees claim make-up contributions years after leaving?

The current Regulations set no one-year limitation for employees’ claims of make-up housing fund contributions, and no uniform cap on how far back make-up can reach. Fund make-up is handled administratively by the housing fund management center — it is not a wage dispute in the labor-arbitration sense, so the one-year labor-arbitration limitation does not apply.

Under the Guiding Opinions of the Ministry of Construction, the Ministry of Finance and the People’s Bank of China on Several Specific Issues in the Administration of Housing Provident Funds (Jian Jing Guan [2005] No. 5), a unit that has never contributed shall in principle make up the arrears from the month the Regulations were promulgated. The Regulations were issued in April 1999 — so where the conditions are met, historical make-up can in principle reach back to April 1999.

Of course, how far back can actually be recovered depends on the unit’s date of establishment, the duration of the employment relationship, the local fund center’s practice, and whether historical wage records can be verified. For companies with long-serving local staff, this is a meaningful contingent liability to quantify during benefits enrollment reviews.

6. New supervision and enforcement changes after the amendment

Three changes in the amendment directly affect employers’ contribution duties, and all three deserve attention.

First, higher fines for failing to register. The former Article 37, renumbered as Article 39, raises the fine for a unit that fails to register with the fund or fails to open employee accounts after being ordered to do so by the fund management center — from the former RMB 10,000–50,000 to RMB 50,000–300,000. Note the distinction between two violations: never registering and never opening accounts triggers the administrative fine; a unit that has opened accounts but underpays or falls into arrears is handled under Article 40 instead — the fund center may order payment within a deadline, and may apply to the people’s court for enforcement if payment is still not made.

Second, a stronger supervision duty. Article 35 previously said the fund management center and employees “have the right to urge” the unit to perform its contribution duties; the amendment changes the center’s duty to “shall supervise” the unit’s lawful performance, while retaining the employees’ right to urge.

Third, new credit supervision. The amended Article 38 provides that the housing and urban-rural development authorities under the State Council and the provincial governments shall establish credit records in the housing fund area and integrate them into the national credit information sharing platform. Which violations will enter the credit records, how they will be disclosed, and how the records will be used await the follow-up implementing rules.

My personal take: the credit-supervision change is the one to watch over the next twelve months — a housing fund violation recorded on the national credit platform could affect a company’s access to government approvals, subsidies and financing, far beyond the fine itself.

Frequently Asked Questions

If you are reviewing your China payroll, benefits or housing fund compliance — or entering China as an employer for the first time — our HR and payroll team can assess your current setup against the amended rules. See also our 2026 guide to China employee handbooks or contact us directly.