What is included in the social security part paid by the unit?
In China, social insurance mainly includes endowment insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance. The part that the unit pays for us is mainly related to endowment insurance, medical insurance and unemployment insurance. The cost of these insurances is calculated based on our salary base and the contribution ratio of the unit.
After retirement, how does the social security part of the employer affect our pension?
After retirement, the pension we receive is mainly composed of two parts: one is the personal account pension, and the other is the basic pension. The calculation of the basic pension is closely related to the part of the pension insurance paid by the unit for us.
The basic pension is calculated based on the average of the average monthly salary of the local on-the-job employees in the previous year and the average indexed monthly contribution salary of the person. My indexed average monthly salary is related to the pension insurance fee paid by the unit for us. The higher the pension insurance fee paid by the unit for us, the higher our indexed average monthly contribution salary may be, and thus the higher the basic pension.
Suppose that Mr. Zhang's employer has been paying social security for him in full before he retires. His salary base is relatively high, so the pension insurance paid by the unit for him is also relatively high. After retirement, the basic pension part of the pension he receives will be relatively high, because the pension insurance part paid by the unit for him plays an important role in the calculation of the basic pension.
Relevant Regulations. The Social Insurance Law of the People's Republic of China stipulates that an employer shall pay basic pension insurance premiums in accordance with the proportion of the total wages of its employees stipulated by the state, which shall be credited to the basic pension insurance pool. Employees shall pay basic pension insurance premiums in accordance with the proportion of their wages stipulated by the state, which shall be credited to their personal accounts.
The specific regulations on the proportion of social security contributions and the calculation of pensions may vary from place to place. In practice, it is advisable to consult with your local social security department or professional for accurate information.