February 22, 2025

Ministry of Human Resources and Social Security: Social insurance rates will be appropriately adjusted in due course

Abstract Recently, some media claimed that China's social insurance premium rate is the highest in the world. The payment is based on the average social wage, and it has become a burden for enterprises and individuals. The reporter interviewed the relevant person in charge of the Ministry of Human Resources and Social Security. Is the contribution base the average social wage? Most people pay by their own wages
Recently, some media claimed that China's social insurance premium rate is the highest in the world, and the payment has been rising year after year based on the average social wage, which has become a burden for enterprises and individuals. The reporter interviewed the relevant person in charge of the Ministry of Human Resources and Social Security.

Is the contribution base the average social wage?

        Most people use their salary as the base for payment. Only a very small number of people with low income and high income refer to the average social wage.

        According to the Social Insurance Law, the base for the payment of social security contributions by employers is the total wages of employees of the unit. The base of the employee's contribution is his own salary. In actual operation, my salary generally refers to my monthly average salary in the previous year. Most of the insured will verify this requirement according to their own salary and payment records.

        However, for a small number of participants, their contribution base is not their own salary. Why?

        According to the relevant person in charge of the Ministry of Human Resources and Social Security, if the average monthly salary is lower than the local average monthly salary of 60%, the average monthly salary of local employees will be 60%; if the average salary of local employees is 300%, the average monthly salary of local employees will be 300% of the contribution, the excess is not recorded in the payment salary base, nor is it recorded in the base of the pension. This means that among all the insured persons, a small number of low-income workers and a few low-income workers have a base of contributions that is not their own. Assume that the average wage of a certain society is 3,000 yuan, 60% is 1,800 yuan, and 300% is 9,000 yuan. Workers whose local wages are below 1,800 yuan and those whose wages are above 9,000 yuan are not based on their own wages. Most employees still pay based on their salary. When my salary rises, the base of payment increases.

        It has been reported that many workers' wages do not reach the average wage, and as the average wage of the society rises, the base of contributions is “increased” and becomes a burden. The reporter learned that previous calculations have shown that the average salary is often higher than the median wage, that is, some people's wages are indeed lower than the average social wage. However, 60% of the average social wage is what most people can achieve. Especially in recent years, the minimum wage has been raised by a large proportion every year across the country. At present, the minimum wage in many places is close to 50% of the average social wage. With the emergence of the shortage of staged labor, the wage growth rate of migrant workers and other groups with low wages in various places is accelerating. The wages of migrant workers in the first three quarters of last year increased by 10%. Therefore, most employees who participate in employee pension insurance pay their endowment insurance according to their actual salary.

        For a few employees with low incomes and a small number of high incomes, why should the low wages be paid at a base higher than the salary of the person, and the higher the wages, the lower than the base of the salary? According to reports, this is mainly considered from the treatment of the insured after retirement. The wages of employees are regulated by the market, and the differences between individuals can be large. However, social insurance itself has the function of regulating the income gap and promoting fairness, and the pension treatment should not be too different. After the minimum and upper limit of payment is stipulated, after the pensioner reaches the retirement age, if the contribution wage is lower than the average salary of the employee for a long time, the pension level is still low, but the actual personal replacement rate (with the retirement of the person) Compared with the target replacement rate of the whole system, it is currently 59%; if its contribution wage is higher than the average salary of employees, the absolute level of pension is higher, but its actual personal replacement rate (before retirement) The annual salary is lower than the target replacement rate.

Is China’s social insurance premium rate the highest in the world?

        China's social security rates are generally at the upper-middle level in the international arena, mainly affected by factors such as the social security system model, transition costs and demographic structure. Social security rates should not be easily compared internationally.

        Some people think that China's social insurance premium rate is currently at a high level in the world, and even "the world's first." The relevant person in charge of the Ministry of Human Resources and Social Security explained this.

        The social insurance premium rate refers to the proportion of social insurance premiums paid by units and individuals to the contribution wages. There are 5 statutory social insurance for urban employees in China, namely, basic endowment insurance for employees, basic medical insurance for employees, unemployment insurance, work injury insurance, and maternity insurance. The first three items are jointly paid by enterprises and employees, and the latter two are only paid by enterprises. The basic pension insurance rate is generally about 20%, the individual employee is 8%, the urban individual industrial and commercial households and flexible employees are 20%; the basic medical insurance rate is about 6%, and the individual employee is 2%; Insurance rate, the unit is 2%, the employee is 1%, the migrant workers are not paid by the individual; the work injury insurance unit rate is between 0.5% and 2%; the maternity insurance, the unit rate does not exceed 1% of the total salary, the individual No payment.

        The person in charge said that the national conditions of different countries are very different, and the scale of social insurance financing is affected by various factors such as population structure, social security system model and coverage. For example, many developing countries have few social security programs and low coverage, so the rates are low. In some countries, although the social insurance contributions are not too high, they are financed by general taxes or social security taxes. Guaranteed benefits, which are not included in the social insurance rate standard. Therefore, simply comparing social insurance rates is difficult to reflect the overall situation of the scale of social insurance financing in various countries.

        Among the five social insurance premium rates in China, the pension insurance premium rate is mainly high. The sum of the other four social insurance rates is around 12%, which is at the upper-middle level. The main factors affecting China's pension insurance rates are: First, the social security system model. Since the 1990s, China has implemented a partial accumulation system model that combines social pooling and individual accounts, that is, on the basis of ensuring current payments, and then accumulating a portion of funds for the future, the rates determined accordingly are naturally higher than those for only the current period. some. The second is the cost of transition. Before the 1970s, China implemented a system of endowment for the protection of the unit. After the reform, the “old people” and “middle people” who had retired did not accumulate or accumulate less. The treatment during the period of “considering payment” needs to pass the current unit. It is compensated by the payment of the in-service staff, which pushes up the current pension insurance rate. The third is the demographic structure. Responding to the challenges of the peak of aging, and continuing to ensure the timely and full payment of basic pensions, it is necessary to maintain a certain pension insurance rate.

Advocate the government to take more responsibility

        The social security rate will be appropriately adjusted in due course. The payment policy should be adjusted in three ways to increase flexibility. Social security contributions are within the scope of labor compensation

        The relevant responsible comrades of the Ministry of Human Resources and Social Security said that the state has taken many measures to reduce the social insurance premium rate. First, vigorously promote the level of overall planning. According to the unified arrangements of the State Council, the provinces have basically established a provincial-level integrated system for endowment insurance, which has reduced the unit rate of more than 30% in some areas to a national unified 20%. Second, governments at all levels have increased their investment in social insurance funds. In 2013 alone, the financial subsidies for enterprise employee pension insurance at all levels of the country reached 266.9 billion yuan, most of which were central financial subsidies. The third is to adopt a policy of phased reduction and suspension of social insurance premiums in economic fluctuations. In the future, with the further improvement of the social security system, according to the reform direction determined by the Third Plenary Session of the 18th CPC Central Committee, the social security rate will be appropriately adjusted in due course to effectively balance the burden on the state, units and individuals.

At present, some enterprises have difficulties in operating and regard social insurance premiums as a large burden. Jin Weigang, director of the Social Security Research Institute of the Ministry of Human Resources and Social Security, believes that social security contributions are part of the deferred use of wages. They are the scope of labor compensation. They are the normal cost of enterprises. They are paid in the same way as wages before taxes. They must be paid and must not be paid. Think of it as a "burden." However, it is indeed necessary for the government to adjust the payment policy to make it more acceptable to enterprises.

        Jin Weigang believes that the current adjustment should be made in three aspects. First, the average social wages referenced by the contributions should better reflect the actual situation of the income of all employed persons, making them closer to the real ability to pay. For example, the current lower limit of payment is 60% of the average social wage, and low-income people and their businesses that do not reach this level of wages will feel heavy burden. Second, increase the flexibility of the payment policy. At present, enterprises with high organic capital have low labor costs and lighter burdens, while social security contributions of labor-intensive enterprises are overwhelmed. It is necessary to consider the actual situation of labor-intensive small and micro enterprises and appropriately reduce the contribution rate. Third, the rate should be adjusted in conjunction with the state of economic operation. For example, when a large impact is encountered and a general operational difficulty occurs, a temporary social insurance fee reduction policy is initiated to help enterprises, especially small and micro enterprises, to tide over the difficulties.

        "Adjusting the level of social security contributions of enterprises and individuals is not to say that the social security benefits should be lowered, and it is not necessary to adjust the social insurance premium rate, but to advocate the government to take on more responsibilities," said Tang Wei, a researcher at the Institute of Sociology of the Chinese Academy of Social Sciences. At present, China's fiscal expenditure on social insurance is less than 8%, far lower than the level of developed countries. Under the premise of the same level of total contributions, the financial sector will pay more, and the pressure on enterprises and individuals will be smaller. Small and micro enterprises will be more acceptable and employees will be more active.

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