If you have no employer, pay into China’s employee pension scheme yourself at the lowest contribution tier and first meet the minimum contribution period; even at the lowest tier, it takes about 10 years of pension payments to recover the cost

You pay the entire amount yourself: 20% of the contribution base. Even the lowest tier costs several hundred to over a thousand yuan a month. You must pay on time for at least 15 years; from 2030, this minimum will rise gradually to 20 years. You cannot withdraw this money before completing the required contributions and retiring.

China’s State Council decision of 2005 sets out how to contribute and receive payments. People without an employer who pay for themselves, formally called flexible-employment workers, contribute 20% of their contribution base, of which 8% is credited to their individual account. Since 2019, they can choose their contribution base within a range of 60% to 300% of the provincial average wage of employees in all categories of urban employers. The pension has two parts. The first is the basic pension: add the local average monthly wage of employed staff in the preceding year to your own average contribution wage, divide by 2, and pay 1% of that amount for each full year of contributions. The second is the individual-account pension: the account balance divided by the prescribed number of payout months. The divisor is 139 months when retiring at 60 and 170 months at 55; the later you retire, the smaller the divisor. The following example is calculated from these formulas, not an official figure. Assume the local average monthly wage in the retirement year is 8,000 yuan, and treat the two average-wage measures as the same figure. All amounts below are expressed at the wage level in the retirement year, assuming interest credited to the individual account exactly keeps pace with wage growth. At the lowest tier of 60%, the contribution base is 4,800 yuan and monthly contributions are 960 yuan. Over 15 years, total contributions are about 173,000 yuan (exactly 172,800 yuan). From age 60, the monthly pension is about 1,457 yuan: 960 yuan in basic pension plus about 497 yuan from the individual account. That is about 17,500 yuan a year (approximately 17,487 yuan), so it takes about 9.9 years to recover the contributions, or until roughly age 70. At the 100% tier, contributions over 15 years total about 288,000 yuan (exactly 288,000 yuan), and the monthly pension is about 2,029 yuan. The extra contributions above the lowest tier, about 115,000 yuan (exactly 115,200 yuan), provide only about 572 yuan more each month and take about 16.8 years to recover. This is because half of the basic-pension calculation uses the local average wage regardless of how much you contribute, favoring lower contributions. Each extra year of contributions at the lowest tier still takes about 9.9 years to recover, making it better value than moving to a higher tier. At the lowest tier, the basic pension supplies most of the pension received. This break-even period does not depend on whether local wages are high or low: where wages are higher, both contributions and pension payments rise in the same proportion, leaving the period unchanged. Earlier contributions are smaller in nominal yuan, while the pension is calculated using the average wage at retirement. Comparing nominal amounts paid and received alone therefore gives a break-even point earlier than 9.9 years. The law requires a total of 15 years of contributions at retirement to receive a monthly pension; people short of this can continue contributing until they reach the minimum. From January 1, 2030, the minimum increases by 6 months each year, gradually reaching 20 years. If a person dies, the remaining individual-account balance can be inherited. The state adjusts pensions upward when appropriate in light of average wage growth and price increases. If the pension insurance fund cannot cover payments, the government provides subsidies (China nationwide).

国务院 (2005). 关于完善企业职工基本养老保险制度的决定（国发〔2005〕38 号，第三、六条及附件「个人账户养老金计发月数表」）. https://www.gov.cn/zhengce/zhengceku/2008-03/28/content_7376.htm；国务院办公厅 (2019). 降低社会保险费率综合方案（国办发〔2019〕13 号，第一、三部分）. https://www.gov.cn/zhengce/zhengceku/2019-04/04/content_5379629.htm；全国人民代表大会常务委员会 (2024). 关于实施渐进式延迟法定退休年龄的决定（附件《国务院关于渐进式延迟法定退休年龄的办法》第二条）. https://www.gov.cn/yaowen/liebiao/202409/content_6974294.htm；全国人大常委会 (2010, 2018 修正). 社会保险法（第十、十二、十三、十四、十六、十七、十八条）. https://www.gov.cn/guoqing/2021-10/29/content_5647616.htm

The example only illustrates the scale of the amounts. Your actual pension depends on local average wages, your contribution tier, interest credited to the individual account, and the year you retire. Pension increases after retirement are excluded from this calculation, so actual break-even may come sooner. Delayed retirement reduces the payout-month divisor and increases the monthly individual-account pension. With an employer, the employer contributes 16% and you contribute 8%. Without an employer, nobody pays that 16% on your behalf: you pay the entire 20% yourself. If you die before receiving enough pension payments to recover your contributions, the individual-account balance can be inherited, and surviving family members can also receive a funeral subsidy and survivor benefit. If you cannot afford the lowest monthly tier, you can first join the urban and rural residents’ pension scheme; see Section 31, item 11 (working without an employer means flexible employment). For eligibility for social insurance subsidies, see Section 7, item 12 (recognition as a person facing employment difficulties). For interrupted contributions and making up missed payments, see Section 7, item 18 (interrupted social insurance contributions). For transferring pension insurance after moving to another city, see Section 19, item 19 (transfer pension and medical insurance to your new place of enrollment).