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Individual income tax provisions related to wages and salaries

1. Individual income tax payers are individuals who reside in China and have earned income, including resident taxpayers and non-resident taxpayers. Resident taxpayers have unlimited duty to pay tax and pay individual income tax on all domestic and overseas income.


2. Calculation of taxable income of wages and salaries: The taxable income is equal to the monthly gross income minus the exemption amount (currently 5,000 yuan), and then minus special deductions (such as three insurance and one fund: personal pension, medical, unemployment and housing fund) and special additional deductions, as well as other deductions determined by law.


3. Payroll tax calculation: Payroll tax is equal to taxable income multiplied by the payroll tax rate. Individual income tax rates vary depending on the taxable income range, ranging from 0% to 45%.


Resident taxpayer

 Tax Rate

 Quick deduction

 -   

0%

 -   

 0.0001

3%

 -   

 36,000.0001

10%

 2,520

 144,000.0001

20%

 16,920

 300,000.0001

25%

 31,920

 420,000.0001

30%

 52,920

 660,000.0001

35%

 85,920

 960,000.0001

45%

 181,920


4. Special additional deductions: This refers to some specific expenses that can be deducted when calculating taxable income, including children's education, continuing education, serious illness medical treatment, housing loan interest, housing rent and supporting the elderly, and care for infants under 3 years old.


5. Year-end one-time bonus: For annual one-time bonus, individual income tax needs to be calculated separately. Specifically, divide the annual one-time bonus income by 12, find the corresponding applicable tax rate and quick deduction according to the quotient, and then calculate the tax payable.


6. Expense for part-time labor service: For labor services expense, the balance of the income after deducting 20% of the expenses shall be taken as the amount of income, and then the individual income tax shall be calculated according to the progressive excess tax rate applicable to the comprehensive income.


No.

Labor Expense(x)

Taxable Income

Tax Rate

Quick deduction

1

x≤800

0

0%

0

2

800<x≤4000

x-800

20%

0

3

4000<x≤20000

x(1-20%)

20%

0

4

20000<x≤50000

x(1-20%)

30%

2000

5

50000<x

x(1-20%)

40%

7000