Shall Holliday Allowance be excluded from social security base?
Asked by: Manufacturing HR
Hi Lawyer. We company would pay employees RMB 500 Yuan as holiday allowance in Spring Festival, Mid-Autumn Day, etc. and would be paid in monthly payroll. I notice that Article 11.2 of Regulations on Composition of Total Wages stipulates the expenses related to labor insurance and employee's benefits shall not be included in employee wages. I was wondering whether holiday allowance shall be excluded from the social security payment calculation base?
Answered by: RDL-Shanghai Attorney Huang Fan
From my point of view, the holiday allowance shall not be excluded from the payment base of social security. First, as cash pay by the company, holiday allowance is different from other benefits in kind. It shall be deemed as within the range of wages income of wide-sense. Second, the "expenses related to labor insurance and employee's benefits" in Regulations on Composition of Total Wages generally refers to expenses of newspaper and book, laundry, haircut and bathing, which is common as employee benefits in state-owned enterprises before. Holiday allowance does not belong to this type. Therefore, it shall be calculated as one type of wages income.