Guides - Human Resources & Payroll in China 2016 - 2017 (5th

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70 - Human Resources and Payroll in China 2016-2017 (5th Edition)
3.6 Calculating and Filing
Individual Income Tax (IIT)
Individual Income Tax (IIT) in China is levied not only on salary income, but on a range of other
income that an individual may receive. The employer’s responsibility is limited to withholding the
IIT payable on employment income, including wages and salaries, bonuses, stock options and
allowances, before paying a net amount to the employee. Employers are required to file IIT for their
employees on a monthly basis, but the actual deadlines vary from city to city.
IIT on Income fromWages and Salaries
As in most countries, income from wages and salaries is taxed according to progressive rates
ranging from three to 45 percent. All employees are given a fixed standard deduction and may also
deduct mandatory benefit payments (e.g. social insurance and housing fund payments for Chinese
nationals, and foreign and Chinese social insurance payments for foreigners) as stipulated by laws
and regulations. Some employers choose to enroll their employees in additional pension plans or
other types of wealth accumulation plans, which are usually not tax deductible.
For better illustration, the following tables are provided to introduce the tax rates and calculation
method for both Chinese nationals and foreign employees.
It should be noted that not all foreign employees are liable for Chinese tax. To determine whether
a foreign individual working in China is subject to Chinese tax, please refer to the section “When
Foreign Employees are Liable to Chinese Tax”.
Employment Income Tax Rates and Deductions
Monthly Taxable Income (RMB) Tax Rate Quick Deduction (RMB)
1,500 or less 3% 0
1,500 < TI ≤ 4,500 10% 105
4,500 < TI ≤ 9,000 20% 555
9,000 < TI ≤ 35,000 25% 1,005
35,000 < TI ≤ 55,000 30% 2,755
55,000 < TI ≤ 80,000 35% 5,505
> 80,000 45% 13,505