Employer costs across Asia: what a hire really costs, country by country
The fee an EOR charges is the smallest part of the bill. The largest is the employer’s statutory contribution on top of salary, and across Asia it ranges from about five per cent to more than thirty. This guide sets out indicative employer contribution rates in twelve markets, what they fund, and the caps and quirks that change the arithmetic.
How to read this table
Rates are the employer’s share only, expressed as a percentage of gross salary, at the headline rates in force in September 2026. Almost every scheme has a salary cap, an age band or a city variation, so the effective rate on a well-paid hire is usually lower than the headline. Employee contributions are withheld from salary and are not an employer cost. Confirm the exact figure for a specific salary and location before budgeting; providers will do this at quote stage.
| Market | Employer contributions (approx.) | What they fund | Caps and quirks |
|---|---|---|---|
| Hong Kong | 5 % | MPF retirement scheme | Capped at HK$1,500 a month (relevant income HK$30,000); no payroll tax, no social insurance |
| Singapore | 17 % | CPF (retirement, housing, healthcare) | For employees aged 55 and under; lower bands above 55; ordinary-wage ceiling S$7,400 a month (2025), rising to S$8,000 in 2026; plus Skills Development Levy and, for some, foreign-worker levy |
| Mainland China | 25–30 % | Pension, medical, unemployment, work injury, maternity, housing fund | Rates and contribution bases set city by city; Shanghai and Beijing at the upper end; base capped at roughly three times local average wage |
| Japan | 15–16 % | Employees’ pension, health insurance, long-term care, employment insurance, workers’ accident | Health rates vary by prefecture; bonus contributions apply; standard monthly remuneration grades |
| South Korea | 10–11 % | National pension, health, long-term care, employment insurance, industrial accident | Pension capped; accident rate varies by industry; statutory severance of one month per year of service is a further real cost |
| Taiwan | 17–18 % | Labour insurance, health insurance, labour pension (6 %), employment insurance | Insured salary grades with a ceiling |
| India | 12–13 % plus gratuity | Employees’ Provident Fund (12 %), ESI (3.25 %, only below the wage ceiling), gratuity accrual | EPF often computed on basic pay up to ₹15,000; gratuity payable after five years; state professional tax; new labour codes may change the wage definition |
| Indonesia | 10–12 % | BPJS Ketenagakerjaan (old age, pension, accident, death) and BPJS Kesehatan (4 %) | Accident rate by risk class; pension and health salary caps; religious-holiday allowance (THR) of one month’s pay is a further cost |
| Philippines | ₱3,000–4,500 a month equivalent | SSS, PhilHealth (5 % shared), Pag-IBIG | SSS is bracketed and capped; 13th-month pay is mandatory and adds one-twelfth to salary cost |
| Vietnam | 21.5 % | Social insurance (17.5 %), health (3 %), unemployment (1 %) | Base capped at twenty times the base salary for SI/HI; trade-union fee of 2 % where applicable |
| Malaysia | 13–14 % | EPF (12 or 13 %), SOCSO (1.75 %), EIS (0.2 %), HRD levy | EPF 13 % for wages up to RM5,000; SOCSO and EIS capped |
| Thailand | 5 % plus provident fund | Social Security Fund; Workmen’s Compensation Fund | SSF capped at 750 baht a month (wage ceiling 15,000 baht); voluntary provident funds are customary |
The costs that are not contributions
- Mandatory bonuses. The Philippines requires a 13th-month payment; Indonesia requires the THR religious-holiday allowance; India requires a statutory bonus for lower-paid staff; in Japan, Korea, China, Taiwan and Vietnam a 13th month or year-end bonus is customary rather than statutory but expected.
- Severance and gratuity. Korea’s statutory severance (one month per year of service), India’s gratuity (after five years), China’s economic compensation, Indonesia’s severance and long-service pay, Thailand’s severance from 120 days’ service. These accrue whether or not they are ever paid, and a good EOR quote provisions for them.
- Leave. Statutory annual leave runs from seven days (Singapore, Hong Kong at entry) to twenty (Japan after 6.5 years); public holidays from eleven (Singapore) to about eighteen (Japan). Paid leave is a salary cost, not a contribution, but it is real.
- The EOR fee itself. A monthly fee per employee, sometimes with a percentage element for higher salaries. In the low-contribution markets (Hong Kong, Thailand) the fee can be the largest line above salary; in China it is dwarfed by social insurance.
Worked comparison: one hire, four cities
For a hire on the local equivalent of US$5,000 a month, the employer’s statutory contributions come to roughly US$190 in Hong Kong (capped MPF), US$850 in Singapore (17 % CPF), US$1,075 in Vietnam (21.5 %) and US$1,300–1,500 in Shanghai (city rates on a capped base). Add the EOR fee, provision for statutory severance where it applies, and the cost of leave, and the spread between the cheapest and most expensive city to employ the same person is close to thirty per cent of salary.
Frequently asked questions
Are employer contributions negotiable?
No. They are statutory. What varies is the base — caps, city rates, age bands — and whether allowances are included. A provider quoting a rate well below the table above is either applying a cap correctly or leaving something out; ask which.
Does the EOR pay these, or do I?
The EOR remits them as the legal employer and passes them through to you at cost on its invoice, alongside salary and its fee. They are your cost.
Why does China vary so much?
Social insurance and housing-fund rates and contribution bases are set by each city or province within national guidance. Shanghai, Beijing and Shenzhen differ from each other and from second-tier cities, and the bases are revised annually against local average wages.
Is it cheaper to use an EOR or my own entity?
Statutory contributions are the same either way. An entity adds incorporation, registered office, audit, tax and HR costs, and saves the EOR fee. The crossover is usually somewhere between ten and twenty employees in a country, depending on the market.
Get a real number
Every provider in our Asia EOR ranking will quote the loaded monthly cost for a specific role and city. Ask two or three, and compare the contribution line as well as the fee.
See the providersSources
- Hong Kong MPFA; Singapore CPF Board contribution rates and ordinary-wage ceiling schedule; PRC MOHRSS and municipal social-insurance bureaux; Japan Pension Service and Japan Health Insurance Association; Korea National Pension Service and NHIS; Taiwan Bureau of Labor Insurance; India EPFO and ESIC; Indonesia BPJS; Philippines SSS, PhilHealth, Pag-IBIG; Vietnam Social Security; Malaysia KWSP/EPF, PERKESO; Thailand Social Security Office.
- Rates as published for 2025–2026 and rounded; confirm against the authority before budgeting.