After entering July, multiple cities including Chengdu, Shenzhen, Fuzhou, and Quanzhou have issued announcements to adjust the upper and lower limits of social security payment bases. There has been a noticeable increase in the amount of social security payments for various personnel.

Starting from July, the upper and lower limits of the medical insurance payment base for Fuzhou's employees have been raised to 4,433 yuan to 22,164 yuan, and the medical insurance payment base for flexible employment personnel has been increased to 4,433 yuan.

In Chengdu, the upper and lower limits of the basic medical insurance payment base for employees have been raised to 4,511 yuan to 22,555 yuan from July. For flexible employment personnel, the payment bases for the two types of insurance participation, which are the combined account and the single account for overall planning, are 6,015 yuan and 7,518 yuan, respectively.

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Shenzhen has raised the lower limit of the pension insurance payment base for flexible employment personnel from 3,523 yuan to 5,284 yuan starting from July, which is a change from a 40% payment level to a 60% payment level.

Why are social insurance payments continuously increasing?

Many people may not understand, but the reason for the continuous increase in social insurance payments is the continuous rise in the average social wage. To ensure the level of social security benefits for people, our social insurance payments are directly linked to the upper and lower limits set according to the average social wage.

The upper and lower limits of the social insurance payment base generally refer to the average social wage of the previous year's full-range urban unit employment personnel, ranging from 60% to 300%.

For unit employees, the personal payment base should first look at the monthly average of the total annual wage of the previous year. Various bonuses, such as year-end bonuses and overtime pay, should be averaged in, and it should be the gross wage.If the average monthly salary falls between the upper and lower limits of the contribution base, then the average monthly salary is used as the contribution base. However, if it falls outside these limits, the contribution base can only be set at 60% or 300%.

For flexible employment personnel, the pension insurance can freely choose a contribution base between the upper and lower limits. The choice of contribution base for medical insurance is generally determined by local regulations. For instance, in places like Fuzhou and Chengdu, the medical insurance contribution base for flexible employment personnel is uniformly stipulated and not selectable.

In the past, for flexible employment personnel's pension insurance, some areas did establish contribution base limits lower than 60%. For example, Shenzhen has always stipulated that the lower limit of the contribution base is based on the minimum wage.

In reality, because China's pension calculation method includes a basic guarantee, if there were no upper and lower limits for the contribution base, according to the pension calculation formula, even with a contribution base of 0, one could still receive a basic pension of 0.5% × number of contribution years × the average social wage of the previous year before retirement. To ensure the long-term stable operation of China's employee pension insurance fund, the state has established a minimum contribution level of 60%. The payback time for this level is actually very short, and considering funeral expenses and consolation money benefits, it can be recouped in just a few years.

The average social wage in 2023 continues to rise.

The average social wage is based on data from national statistical departments. According to the National Bureau of Statistics, the average wage for urban non-private unit employees in 2023 reached 120,698 yuan, while for private units it was 68,340 yuan, with growth rates of 5.8% and 4.8% respectively, and the average monthly wage reached 10,058 yuan and 5,695 yuan. Comprehensively estimated, the average wage for all urban unit employees increased by about 5.3%. Although there will be differences among provinces, it is estimated that the upper and lower limits of the contribution base will also increase by about 4% to 6%.

The average social wage indeed has its statistical limitations. For example, individual employees and freelancers are not within the scope of the statistics, yet these groups also need to participate in insurance, and their income is relatively low.

Due to the relatively fixed social security contribution rates in various regions, such as a 20% contribution rate for flexible employment personnel's pension insurance, and an 8% personal contribution rate and a 16% employer contribution rate for unit employees, an increase in the contribution base will lead to an increase in the amount of money contributed.

Overall, July is the time when many places announce the upper and lower limits of the 2023 contribution base. Some places start to make up the difference from January, while others start to implement it from July. The whole country still needs to follow local policies, and it is hoped that there will be a unification in the future. #Top Headline Creation Challenge# #Social Security Contribution Increase#