Notice on the Contribution of Social Insurance Premium of Chinese Employees for 2007


According to "Provisions of Shanghai Municipality on Pension Insurance of Urban Employees", the adjustment of contribution base of employees' social insurance premium for the year 2007 has started. This year, the government will continue to reinforce the inspection and management of social insurance contribution. The Standing Committee of the National People's Congress, while deliberating the draft of Labor Contract Law at the meeting held recently, put forth some decisions to protect laborers' basic rights and interests such as gradually realizing national-wide mobility of the individual accounts of pension. To ensure that the annual adjustment is accomplished as scheduled, and to fulfill the service duty of Shanghai Foreign Service Co., Ltd. (SFSC), we would like to inform your company of issues concerning the contribution of Chinese employees' social insurance premium for the year 2007.

1. The social insurance contribution base shall be settled according to employee's average monthly salary of the previous year. Declaration of the annual salary of each employee of your company in the previous year (January through December in 2006) is required. For those whose average monthly salary is above 300% of the city average in the previous year, the actual salary shall be declared and Shanghai Municipal Social Insurance Centre will settle their contribution base as 300% of the city average; for those whose average monthly salary is below 60% of the city average in the previous year, the base shall be 60% of the city average. Declaration submitted, the upper and lower limits of contribution base will be checked by Shanghai Municipal Social Insurance Centre.

2. Composition of Social Insurance for 2007 is as follows,

No Item Contribution Base
Contribution Proportion
Enterprise Individual
1 Pension Insurance The contribution base of the social insurance premium for individual shall be settled according to the employee's average monthly salary in 2006. The upper and lower limits of the contribution base shall be settled respectively as 300% and 60% of the city average monthly salary, 2006 about to be declared. 22% 8% 30%
2 Medical Insurance 12% 2% 14%
3 Maternity Insurance 0.5% 0% 0.5%
4 Unemployment Insurance 2% 1% 3%
5 Work-related
Injury Insurance
0.5% 0% 0.5%
6 Total 37% 11% 48%


? The contribution bases of social insurance premium of Chinese employees, as determined in the present Labor Service Contract between your company and SFSC, shall be valid till the end of March 2007.
? The period from the present day to March 10th shall be the adjustment period for the contribution base of social insurance premium of Chinese employees. You are requested to confirm the contribution base of each Chinese employee of your company. In due course, both parties shall update relevant cooperation documents or agreements.
After March 10th, SFSC shall declare to the social insurance administration institution the adjusted contribution bases, which shall come into effect as of April 1st, 2007.

4. Position code
The position code declaration is an important part of the adjustment work this year. Each employee's position code-a six-figure code, is required in the declaration document. Please fill the relevant column with the position code of all the employees involved in this year's adjustment. To get the code, please check the web link as followed
. Please download "Position Code Guide" for reference and copy and paste the code needed. Or please call SFSC Call Center at 962002 for further information.

5. Confirmation by signature
According to the relevant regulations in Shanghai, each employee's signature is required when submitting the declaration. While declaring the contribution base, companies shall have every employee sign the declaration form as confirmation. Companies shall keep file of the original signed materials and submit a Letter of Commitment stamped by official seal to Social Insurance Center to ensure that every employee has signed to confirm his own contribution base.

6. Declaration via email

Facilitated with the progress of governmental e-business, and the electronic data transmission equipments adopted by clients, the declaration of the new contribution bases shall be submitted via email.

The process of email declaration,
① SFSC sends the declaration documents to clients, and confirm receipt via email;
② Clients fill out and return the declaration documents via email;
③ Please find the declaration documents and specifications in attachment.

The adjustment of social insurance contribution is in line with relevant government policy with a time limit. Could you please kindly determine and confirm with our service staff the new contribution base for your Chinese employees no later than March 10th.

Should you have any further queries, please contact our service departments.

Your kind cooperation is highly appreciated.

Shanghai Foreign Service Co., Ltd.

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