Job Discussion Forums

[Big Worm]

Hi,

Sorry for posting a q that has been done before, but we know how the search function works.

Quick question: Are flight reimbursements supposed to be taxed? If so, at your "regular rate"? Thx.

[GuestBob]

If this is paid as a bonus of any kind (as opposed to a submission of tickets for reimbursal) then yes, you are liable for tax at whatever rate is applicable to you based on your income. If not, then you shouldn't be liable for any tax on a proven expense.

If you were Chinese and working for a public institution you would probably be asked to show invoices for purchase and/or tax receipts (fapiao). However, this is purchase tax and would not be deducted from the total amount reimbursed because you have already been charged it at point of sale.

Ask them whether the tax is income tax or purchase tax.

[GeminiTiger]

Guestbob is probably technically correct, however I have never been taxed at any Uni job in eight years for flight reimbursement in 4 different provinces and I suspect it's just another nickle and dime tactic of your
employer to pocket some extra cash.

Does your contract say the money will be taxed, does it say a direct amount? For that matter does your contract say you will be taxed at all? If it says you will receive X amount of payment, I feel that the employer should have to pay the tax. But I'm not a lawyer.

If you feel your being cheated you always have the right to third party government attribution. There is a really good chance someone is just pocketing this money and if you went in asking government employees if they employer was paying taxes for everything it could be messy for them.

It's complicated, making trouble for an employer can easily backfire and that is why they often lean on their workers, Chinese and laowai alike.

[johntpartee]

It makes sense that it would be subject to tax, but mine never has been (I've gotten three flight reimbursements in the last year and a half). The travel allowance has never been taxed, either.

[Bud Powell]

From Dictionary.com:

re·im·burse (rm-bûrs)

1. To repay (money spent); refund.
2. To pay back or compensate (another party) for money spent or losses

Reimbursement is money repaid for expenses incurred, not income. So no, it is not taxable, even if the school paid more for the airfare than you did.

I agree that if your employer tries to nick you for taxes on reimbursement, it's just an attempt to recoup expenses. I've NEVER been taxed on reimbursed airfare. The public system takes care of that itself in order to reduce expenses. (The travel agent also tries to cop the frequent flier miles, so hang onto your eticket--- if you can get one--- Pudong just requires a scan of your passport--- and boarding passes and other paperwork).

If you got bumped up from cattle class to business or first class, it's possible that you could be taxed on that, but it is not probable, especially if you paid nothing for the bump, and if it was initiated by the airline. I don't think that there's even any airfare change record issued when you get bumped up.

[mwaltman]

[GuestBob]

[Bud Powell]

Sometimes it's necessary to post actual definitions because it seems that sometimes we don't speak the same language.

The verbage that can be an indication of taxation is when the airfare "reimbursement" is referred to as an allowance. In the U.S., allowances are taxable income and are not considered reimbursement, and if you actually report your income to the IRS, the allowance is considered reportable and taxable income (if your income exceeds about $90,000.00 per year).

How the Chinese government regards reimbursement probably varies widely from area to area.