Tax Authorities Phase In Social Security Compliance for Large Enterprises From 2026

Compliant payment of social security contributions is an objective requirement for strengthening the sustainability of the social insurance system and an important safeguard for protecting the lawful rights and interests of workers. The outline of the 15th Five-Year Plan calls for enhancing the sustainability of the social insurance system. Tax authorities are promoting compliant social security contributions in a classified and step-by-step manner based on actual conditions, resolutely avoiding a one-size-fits-all approach.

The Social Insurance Law clearly stipulates that paying social security contributions for employees in full and on time is a statutory obligation of employers. However, some employers only enroll a portion of their staff or contribute at the minimum base, evading social security costs and infringing on workers' rights. As population aging deepens, the sustainability of the social insurance system faces mounting challenges. Employee pension insurance operates on a mechanism of higher benefits for longer or larger contributions, and understated contribution bases undermine the sustainability of the funds.

In advancing compliant social security contributions and consolidating contribution bases, tax authorities are proceeding step by step and applying differentiated measures, without resorting to a one-size-fits-all approach or demanding immediate full compliance. Since 2026, the scope of this work has been limited to large and medium-sized enterprises with payment capacity. Even for such enterprises, an enterprise-specific policy is applied, allowing phased progress within reasonable timeframes. Tax authorities are only regulating current-period contribution bases, without retroactive application, and no centralized campaign to collect arrears has been launched.

For individual worker complaints involving the 2024 tax year, the authorities are relying on local social security contribution dispute resolution mechanisms to handle matters lawfully and on a case-by-case basis. Tax authorities remain committed to collecting taxes and fees in accordance with the law and regulations, supporting enterprise development, optimizing the business environment, and implementing preferential tax and fee policies.

Some enterprises have already taken the initiative to raise their social security compliance levels. BYD Group has in recent years improved the coverage of social security contribution bases to avoid labor disputes and stabilize its workforce; over the past two years, voluntary turnover among core positions has fallen sharply while the onboarding rate for high-caliber talent has increased. The finance officer of Zhuzhou Huarui Precision Tools Co. , Ltd. said that compliant declaration and payment of social security contributions standardize base reporting, reduce contribution-related risks and labor disputes, and safeguard workers' lawful rights in pension, medical, work injury, and unemployment insurance. Both companies emphasized that social security compliance is a long-term investment that contributes to stable labor relations and sustainable corporate development.