Housing provident fund is a government policy that involves both employees and companies contributing a portion of money each month. This money accumulates over time and can be used to assist employees in buying homes.
The housing provident fund is a policy-related fund specifically designated for housing purposes, and it serves as a continuation of welfare policies after the government’s elimination of housing allocation. Employers contribute to the housing provident fund on behalf of their employees, enabling them to access certain policy benefits, such as using the fund to obtain housing loans. Employees only need to cover half of the fund contributions, with the other half being paid by their employers.
Once the money is deposited into the employee’s provident fund account, it becomes their personal property and can be fully withdrawn in situations like purchasing a house or retirement.
The Features and Notices of the Housing Provident Fund
(1) The Housing Provident Fund is only established in urban areas and not in rural areas.
(2) The Housing Provident Fund system is only established for in-service employees. Unemployed urban residents and retired employees do not participate in the Housing Provident Fund system.
(3) The Housing Provident Fund is composed of two parts: one part is deposited by the employee, and the other part is deposited by the employee personally. The portion deposited by the employee personally is withheld by the workplace and deposited into the individual’s Housing Provident Fund account along with the employer’s contribution.
(4) The Housing Provident Fund is long-term in nature. Once the Housing Provident Fund system is established, employees must continuously make contributions as required during their employment period, with limited exceptions, such as retirement or other situations specified in the “Housing Provident Fund Management Regulations.” This reflects the stability, uniformity, standardization, and mandatory nature of the Housing Provident Fund.
(5) The Housing Provident Fund is a specific personal housing savings accumulated according to regulations for housing consumption expenses. It has two characteristics:
It is accumulative, meaning that the Housing Provident Fund is not part of an employee’s salary, is not distributed in cash, and must be deposited into a special account opened by the Housing Provident Fund management center at the designated bank and managed separately.
It is earmarked, meaning that the Housing Provident Fund is for specific housing-related expenses such as purchasing, building, renovating self-occupied housing, or paying rent. Employees can only withdraw their Housing Provident Fund when they leave their job, retire, become fully disabled, terminate their employment relationship with the employer, or change their residence from the original city of residence.
According to Chinese regulations, all enterprises are required to contribute to the Housing Provident Fund for their employees, regardless of whether they are state-owned or privately owned.
Benefits of the provident fund
Benefits for both individuals and business:
1. During your working years, the Housing Provident Fund is not only contributed by you personally at a certain percentage of your salary but also supplemented by your employer at a specified percentage of your salary. These two contributions are deposited into your personal Housing Provident Fund account, where they accrue interest, and both the principal and interest belong to you personally.
2.Monthly contributions to the Housing Provident Fund serve as savings for your own housing expenses. You can withdraw funds according to specified limits and frequencies when policy conditions allow, such as for purchasing a home.
3.In the event of sudden circumstances within the policy-defined scope, you can withdraw funds from your Housing Provident Fund account as stipulated to alleviate the economic pressure caused by such situations.
4.When you retire, any remaining Housing Provident Fund in your personal account that hasn’t been withdrawn can be settled as a lump sum with interest and then withdrawn. This is akin to a form of retirement savings.
5.After meeting certain conditions with your Housing Provident Fund account, you can apply for a Housing Provident Fund loan when purchasing or building a home. This type of loan typically offers lower interest rates compared to regular commercial bank personal housing loans.
6.The Housing Provident Fund contributions made as per regulations are exempt from personal income tax and interest income tax, meaning you can enjoy tax benefits.
7.Companies contributing to the housing provident fund demonstrate their commitment to legal compliance and integrity, which helps them avoid legal risks.
8. Companies can include the housing provident fund contributions made according to regulations as part of their costs and are exempt from income tax. This can lead to cost savings for the company.
9. Enhances cohesion:
Establishing a Housing Provident Fund system for employees demonstrates the company’s effective material incentive to employees, safeguards their immediate interests, and conveys genuine care for employees. This enhances employee identification, belonging, and cohesion with the company. It also contributes to the development of a harmonious corporate culture and a favorable work atmosphere, increases employee motivation, and helps the company attract and retain talent, ultimately boosting the company’s competitiveness and playing a continuous role in promoting and advancing the company’s development.
Additionally, after the company establishes a Housing Provident Fund system for employees, individual housing issues are transferred to society, fulfilling legal obligations and relieving the company of the burden of managing social welfare. Sincerely hope that our companies can comply with relevant national regulations, and while achieving higher profits, bring more well-being to employees. In summary, by contributing to the Housing Provident Fund, both the company and employees achieve a win-win situation. Employees can realize their housing dreams through low-interest loans, and the company fulfills its social responsibility, laying a solid foundation for future development.
How to Calculate Contribution ratio
The contribution rate is related to your monthly average base salary of the last whole year and the contribution rate. Any increase or decrease in the average salary amount and the contribution rate will lead to corresponding changes in the amount you should contribute to the Housing Provident Fund.
The deposit base of housing provident fund is different in different cities, and the deposit ratio will change accordingly. According to the latest regulations, localities can determine their own standards of deposit bases. If the employee’s income is lower than the minimum limit, it shall be paid according to the minimum standard, and if it is higher than the upper limit, it shall be paid according to the highest standard. The proportion of enterprise housing provident fund contributions can be further reduced according to the local actual situation. Here are some examples:
On July 25th, the Beijing Housing Provident Fund Management Center issued a notice regarding the 2023 annual Housing Provident Fund contributions. It was reported that the upper limit for the 2023 annual Housing Provident Fund contribution base is 33,891 yuan. Based on a 12% contribution rate, the maximum monthly contribution is 8,134 yuan, which is an increase of 482 yuan compared to the maximum monthly contribution limit from the previous year.
According to the notice, in the 2023 Housing Provident Fund year, the contribution rates continue to range from 5% to 12%, and employers can independently determine the specific contribution rate within the designated range based on their financial circumstances. Starting from July 1, 2023, the upper limit for the Housing Provident Fund annual contribution base has been adjusted to 33,891 yuan. With a 12% contribution rate, the maximum monthly contribution is 8,134 yuan, with both employers and employees contributing 4,067 yuan each.
In 2022, the average monthly salary for all urban employees in Shanghai was 12,183 yuan. Based on this, starting from July 1, 2023, the upper limit for the city’s social security payment base will be adjusted to 36,549 yuan per month (not exceeding three times the average wage in Shanghai), and the lower limit will be adjusted to 7,310 yuan per month.
For new employees who join on or after January 1, 2023, their housing provident fund contribution base will be determined based on their total monthly income for the month they start working.
In 2023, the contribution ratio for both employers and employees to the housing provident fund will be between 5% and 7% (rounded to whole numbers). The additional contribution ratio for both employers and employees can range from 1% to 5% (rounded to whole numbers). Employers have the flexibility to choose specific contribution rates within the mentioned ranges.
Adjustment of contribution base for employees and flexible workers:
The contribution base for both regular employees and flexible workers will not exceed 41,190 yuan (three times the average monthly wage of 13,730 yuan in the city in 2022). After the adjustment, the contribution base should not be lower than 2,360 yuan.
For employees who start a new job or are newly hired by an employer after January 1, 2023, their contribution base will not be subject to the current adjustment and will continue to use the existing base.
The minimum and maximum contribution ratios for both employers and employees for the housing provident fund are 5% and 12%, respectively.
Flexible workers have the option to adjust their housing provident fund contribution ratio through voluntary contribution agreements, with the adjusted ratio not falling below 10% or exceeding 24%.
If a company faces genuine difficulties in contributing to the housing provident fund, it can request a reduction in the contribution ratio (below 5%) or a delay in contributions, following the relevant policies of our city. Once the company’s financial situation improves, it can then increase the contribution ratio or make up for the delayed housing provident fund contributions.
More information can be seen in the following table:
How to inquire your Housing Provident Fund
1.Log in to the Housing Provident Fund Management Center’s official website to check: Enter the official website and click on the “Personal Housing Provident Fund Query” link, then go to the query page. Enter your account (ID card or Housing Provident Fund card number) and password to access the detailed account page.
2.Log in to the Housing Provident Fund Banking System to check: Log in to the Housing Provident Fund banking system, and after a successful login, you will reach the online banking welcome page. Click on the “My Account” section in the navigation bar. Once you are in the “My Account” page, you will find the “Housing Provident Fund” option in the left-side menu. Click on “Housing Provident Fund” and select the information you want to query, such as “My Housing Provident Fund,” “Transaction Details,” or “Repayment Schedule.”
3.Visit the Housing Provident Fund Management Center in person for inquiries: If you are the employee, you should bring your original ID card. If you are the representative of your employer, you should carry a letter of introduction from your employer along with your ID card. If you are an authorized person, you need to bring the authorized person’s ID card and the authorization letter. Visit the counter at the local Housing Provident Fund Management Center with the required documents.
If you need to inquire (or print) the detailed deposit history of the Housing Provident Fund (for more than the past year and a half), the employee should go to the Housing Provident Fund Center (Office, Branch Center) in person with their original ID card and request the information. The employee can collect the query details after 5 working days.
4.Dial the 12329 Housing Provident Fund Service Hotline to inquire: Call the Housing Provident Fund hotline and follow the prompts for self-service inquiry. Enter your Housing Provident Fund account number and password to access the information.
5.Inquiry through SMS (not supported in some cities): Compose a text message according to the Housing Provident Fund query format requirements and send it to the designated query number.
6.Check the Housing Provident Fund through Alipay (not supported in some cities): Tap the Alipay Wallet icon on your mobile desktop to open the app. Find the “City Services” button and open it to proceed. In the “City Services” menu, locate the “Housing Provident Fund Query” button. For the first time using this service, you will need to authorize it. After authorization, you can click on “Personal Inquiry.” Follow the system prompts to enter your ID card number and query password. Once you access the interface, you can wait for the system to provide specific data.
Here are the steps to check your Housing Provident Fund balance on Alipay:
Open the Alipay app on your mobile device.
Tap the search bar at the top and search for “住房公积金” (Housing Provident Fund).
Select the “全国住房公积金公共服务” (National Housing Provident Fund Public Service) option from the search results.
Within the “全国住房公积金公共服务” mini-program, log in with your credentials.
Once logged in, you should be able to view your Housing Provident Fund balance and related information.
Please note that the specific user interface and options may vary depending on your location and the version of the Alipay app you are using.
Frequently Asked Questions
Can I contribute to a provident fund on my own?
Housing provident fund cannot be contributed individually. The relevant regulations are as follows:
Housing provident fund cannot be individually contributed by the person. The housing provident fund account is established by the employer on behalf of the employee, and the fund is contributed by the employer.
The housing provident fund is contributed by the employer, and individuals are not allowed to contribute on their own. To open an account or make contributions to the provident fund, it must be accompanied by the company’s financial official stamp.
If the employer does not make contributions to the provident fund, the individual’s provident fund account will be frozen at the provident fund management center. It can be withdrawn when reaching the retirement age or transferred to continue contributions. Individuals cannot process various provident fund transactions.
Can I apply for a housing provident fund during the probation period?
Yes, you can start contributing from the second month of your employment. The legal basis for this is Article 17 of the Housing Provident Fund Management Regulations. Newly employed workers begin to contribute to the housing provident fund from the second month of their employment, and the monthly contribution amount is calculated by multiplying the worker’s monthly salary by the worker’s housing provident fund contribution rate. For employees newly transferred to a unit, they start contributing to the housing provident fund from the day they receive their salary from the unit, with the monthly contribution amount calculated in the same manner.
Can I withdraw the full amount of my CPF?
You can withdraw the entire provident fund as long as you meet one of the following withdrawal conditions:
Purchase a house, construct a house, renovate, or make major repairs.
Households without a property paying rent exceeding the prescribed income ratio.
Repay housing loan principal and interest.
Install an elevator in an existing residential property.
Experience family financial difficulties due to unexpected events (serious illness, accidents, or disasters).
Enjoy minimum living allowances.
Non-local residents or rural migrant workers leaving the city and terminating labor contracts with their employers.
Completely or partially lose the ability to work and terminate the labor relationship with the employer.
Move the household registration out of the province.
Retire or reach the retirement age.
Be sentenced to imprisonment during employment, with release occurring after reaching the
statutory retirement age.
Pass away or be declared legally deceased.
How to withdraw the accumulation fund if it is sealed up
After the housing provident fund is sealed, if you want to make a withdrawal, you should follow these specific procedures:
Step 1: Submit an Application
The contributor should visit the local housing provident fund management center or an authorized bank branch with documents such as their personal ID, housing provident fund deposit certificate, and employment termination certificate to apply for the withdrawal procedure.
Step 2: Application Review
Once the housing provident fund management center receives the application, they will review the submitted documents. They will then decide whether to approve or reject the withdrawal and notify the applicant through a message.
Step 3: Disbursement of Funds
If the withdrawal is approved, the housing provident fund management center typically transfers the withdrawn amount to the contributor’s bank account within three business days.