Big_H
Joined: 21 Dec 2013
Posts: 115
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 Posted: Tue Mar 31, 2015 2:22 am Post subject: Income Tax for Expats in China |
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Hey everyone,
I've looking around trying to find how much I owe in taxes each month, an although I found the table listing the different rates/salary, but I'm not sure about that formula that this guy used:
| tangal wrote: |
According to the tax regulation in China, wages and salaries are taxed on the basis of the balance of tax payer's monthly wages and salaries after lump-sum deduction and by applying the nine-grade progressive rates as shown in the table below. The lump-sum deduction is published by the government and currently, it is 3,500 Yuan for Chinese and 4,800 Yuan for ex-pats.
Individual Income Tax Rates Schedule:
Grade / Monthly Taxable Income / Tax Rate (%) / Quick Deduction
1 Income of 1500 yuan or less / 3 / 0
2 1500 to 4,500 yuan / 10 / 105
3 4,500 to 9,000 yuan / 20 / 555
4 9,000 to 35,000 yuan / 25 / 1005
5 35,000 to 55,000 yuan / 30 / 2755
6 55,000 to 80,000 yuan / 35 / 5505
7 Income in excess of 80,000 / 45 / 13505
Formula: Income tax= (Gross salary-lump sum deduction)* Tax Rate- Quick Deduction
E.g. An expat’s monthly gross income is: 8,000.00 Yuan.
The monthly individual income tax is: (8000-4800)*10%-105=215 Yuan |
Is that formula correct? I mean, isn't it supposed to be incremental?
For example if a salary is: 15'000 RMB/mth
- Deductible 4800 RMB: 15'000-4800 = 10'200 RMB
Should it be:
| A wrote: |
Tier 4 [9k -> 35k]: (10'200 * 0.25) - 1005 = 1'545
Total Monthly Tax: 1545 RMB |
or
| B wrote: |
Tier 1 [0 -> 1.5k]: (1500 * 0.03) - 0 = 45
Remaining taxable income: 10'200 - 1500 = 8700 RMB
Tier 2 [1.5k -> 4.5k]: (4500 * 0.1) - 105 = 450
Remaining taxable income: 8700 - 4500 = 4200 RMB
Tier 3 [4.5k -> 9k]: (4200 * 0.2) - 555 = 285
So the total income tax is: 45 + 450+ 285 = 780 RMB |
How does it work out in here? |
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