On November 1, the "National Tax Administrative Penalty Discretionary Benchmarks (2026 Edition)" came into effect, and illegal social security payment violations were included in the national unified tax administrative penalty discretion system for the first time. The "Benchmark" clarifies that employers who fail to pay social security shall be fined up to three times. At the same time, it should be noted that the so-called "voluntary surrender of social security agreement" is invalid.
Unify national law enforcement standards to prevent different punishments for the same crime
Item 30 of the "Benchmarks" clarifies that if an employer fails to pay or underpays social insurance premiums within the prescribed period, it will be ordered by the tax authorities to pay within a time limit. If it fails to pay within the time limit, it will be fined not less than one time but not more than three times the amount of overdue payment. Based on the amount in arrears and the proportion of the total amount payable, the enforcement will be divided into three levels: general, serious and severe. For example, if a company owes 6 million yuan in social security payments, accounting for 35% of the total amount due, it has violated the third level and may be fined up to 18 million yuan, plus a late payment fee of 50,000 yuan per day.
Shi Zhengwen, director of the Fiscal and Taxation Law Research Center of China University of Political Science and Law, said that in fact, the "one to three times fine" is not a new penalty. It has been clarified in the "Social Insurance Law of the People's Republic of China" that was implemented as early as 2011. This time, the standards for law enforcement have been unified. Under what circumstances the penalty will be tripled, which makes a big difference to the employer. The discretionary benchmark is the standard for uniform law enforcement.
In July this year, when the "National Tax Administrative Penalty Discretionary Benchmarks (2026 Edition)" solicited opinions from the public, the heads of relevant departments and bureaus of the State Administration of Taxation introduced that in recent years, Northeast, Southwest, Northwest, Central South, North China, East China and other regions have successively issued unified tax administrative penalty discretionary benchmarks within the region, which have played a positive role in standardizing tax law enforcement and strengthening tax collection. However, there are also problems such as inconsistent system structure, insufficient scientific rationality, inconsistent discretionary factors, and insufficient guidance. Formulating tax administrative penalty discretionary benchmarks and unifying the national tax administrative penalty scale will help reduce the discretionary space of tax administrative law enforcement, prevent different penalties for the same case, and equally protect the legitimate rights and interests of various business entities.
Underpaying social security may seem like an increase in income, but it actually harms employees’ rights and interests.
Why should social security payment standards be unified? Chu Fuling, director of the Social Security Research Center of the Central University of Finance and Economics, said that the crux of the problem is that in the past, employers had false payment bases. It seemed that paying less for social security allowed employees to get more money, but in the end it was the employees who suffered.
Chu Fuling: At the moment, the company's costs will be reduced, but it will have a great impact on the treatment of employees. For example, in the calculation and payment of pensions, if your contribution salary is 10,000 yuan, and the result is 5,000 yuan, it is obvious that when calculating the pension, the base will be reduced by one-half, and the level of the pension will also be reduced. In addition, work-related injuries, childbirth, etc. are usually calculated and paid based on paid wages.
Chu Fuling told China Voice that with the implementation of the "National Tax Administrative Penalty Discretionary Benchmarks (2026 Edition)" and the upgrade of technical means, law enforcement will be more evidence-based and can better protect the rights and interests of employees.
There are pre-processes for punishment and there is no immediate penalty for non-payment.
Shi Zhengwen believes that the "Benchmarks" will unify law enforcement standards in various places. In addition to protecting the rights and interests of employees, it also protects the rights and interests of compliant enterprises. Shi Zhengwen further explained that non-payment of social insurance premiums is not punished as soon as the payment is overdue, and there are strict pre-processing procedures for punishment. If the employer fails to pay on time and the social security fee collection department finds out, it must issue a notice ordering payment within a time limit. After the notice, if the employer still fails to pay overdue, a penalty can be imposed.
Shi Zhengwen reminded that paying social security fees is a legal obligation. Some employers have signed so-called "voluntary social security waiver agreements" with employees who have established labor relations. This agreement is invalid because it violates the mandatory provisions of the law.
