Average salary is very hard to tell, since it varies greatly based on lots of factors.
The Enterprise Type You Work For
Nation Owned Enterprises pays very low, something around 1000 – 2000 RMB. For people looking for salary information on Internet, you don’t need to take it into consideration since you don’t like them (for the low salary) and they don’t like people like you (since they don’t has the flexibility to hire you). :-D Of cause, they are changing these days.
Most higher salary jobs exist in foreign owned company and private held companies. According to this report, the average annual salary for white-collar workers in Shanghai is 38,447 RMB (US$ 4,632).
For Fortune 500 companies, like Intel, Microsoft, HP, IBM, people are paid higher. Should be 100K to 200K RMB / year for employees.
Executives are paid very high. I heard a GM position of an IT company is 2 million RMB per year.
A lot of foreigner get U.S. or Europe local pay and dispatched to Shanghai to work. For them, Shanghai will be paradise considering the exchange rate. Foods and drinks are labeled almost the same number (or 50%) higher than that in U.S. The difference is, in U.S, the unit is USD and in Shanghai, it is RMB. The exchange rate is around 8 RMB = 1 USD.
People coming here from U.S should expect lower income since the living cost is much more lower than in U.S. The low living cost has been nominated as top 10 things expats love about Shanghai.
According to the last regulation (Chinese site)
<500 5% 500-2000 10% 2000-5000 15% 5,000-20,000 20%
The portion below 1000 RMB in Shanghai do not need to pay tax. (It is 1000 RMB for Beijing, 1600 RMB for Shenzhen and 800 RMB for the rest part of China).
For example, if someone get 100K annual salary (already pretty good), that is 8333 RMB/month. (Some companies pay salaries in 13 months with one month double pay.)
After tax (20%), he/she gets 6666 RMB. Update: Run corrected me that the tax is not calculated as 20% of salary directly.
The portion of salary you need to pay tax = 8333 – 1000 = 7333 RMB
The tax you need to pay = 500 * 5% + (2000 – 500) * 10% + (5000 – 2000) * 15% + (7333 – 5000) * 20% = 1091.6 RMB
You get 6242 RMB. (Thanks goes to Run, Ginn and JH to help me correct all the errors. I believe this version is the correct one)
How he/she will spend the money?
- Rent. Typically, he/she will need to pay of rent of 1000 – 1200 RMB – a typical room people from this salary rage will choose.
- Transportation. 3 RMB for single way Metro –> 6 RMB per day –> 180 RMB per month. Should also consider occasional taxi – additional 50 RMB.
- Mobile and Internet. Should be 200 RMB in total if the person is not too talkative.
- Utilities. Utilities is nothing compared to other expense. 100 RMB or so.
So he/she should still have some money (around 4000 RMB) for eating out, shopping, and clothes… That is life of a well-paid white collar in Shanghai.