Q&A

The monthly housing fund premium is determined by the employee’s previous year’s average wage, or the first month’s salary for a new employee, and the statutory contribution ratio. The statutory maximum contribution amount is calculated based on the average monthly wage of all on-the-job staff of the city or province for the previous year. If an individual’s monthly salary is higher than the statutory limit, they will simply use the ceiling amount to calculate their housing fund payment. It is possible in many cities to make housing fund contributions in excess of 300 percent of the local social average salary to employees. The limit is generally 500 percent, although some cities do not set a limit at all. The portion over 300 percent will be deemed to be taxable income of the employee.