Job Discussion Forums

svaldezi · Joined: 22 Apr 2014 Posts: 36

How is that employers in China get away with not paying taxes in China? I have talk to many ESL teachers who don't pay taxes. My boss also doesn't take out taxes in my check. Are the teachers at risk in getting trouble with the govt. or does this fall on the employer?

MuscatGary · Posted: Thu Apr 16, 2015 1:54 am Post subject: Re: Taxes in China

svaldezi · Joined: 22 Apr 2014 Posts: 36

I don't know but even people I know who have z visa have done this. So yes it doesn't make sense but obviously some taxes must be being paid. Since the govt. is aware of the foreigner working in the country. That's my question.

hdeth · Joined: 20 Jan 2015 Posts: 583

What kind of job? The tax threshold is high enough that people working uni gigs usually don't have to pay taxes on their primary income.

svaldezi · Joined: 22 Apr 2014 Posts: 36

7969 · Joined: 26 Mar 2003 Posts: 5782 Location: Coastal Guangdong

MuscatGary · Posted: Thu Apr 16, 2015 3:39 am Post subject:

What would the tax be on 20k pcm?

svaldezi · Joined: 22 Apr 2014 Posts: 36

Thank You!!!!!!!!!!! Now it makes sense!

Son of Bud Powell · Joined: 04 Mar 2015 Posts: 179 Location: Since 2003

This is the lame reason I got from an FAO:

"You are considered a temporary worker, so we don't bother to file taxes for you."

And boy, was i treated like a temporary worker.

There are a couple of drawbacks to not paying taxes. First, you won't be able to convert rmb to dollars or your home currency. (Yeah, yeah. Everyone and his brother does it all the time. Right).

You will need a Chinese citizen to take your money to a bank, present his ID card, fill out a form, and then make the conversion. Soon, everyone and his brother will know how much you make, and you will run out of people who will be willing to go to the bank for you. You may be lucky and find a bank officer who will use his own ID card to make the conversion for you, but that won't happen often.

Of course another drawback to not paying taxes is the possibility that you'll be caught. I'm unsure who would get into more trouble: the FT or the school.

The bottom line is this: Your employer isn't paying taxes because he's lazy and doesn't care. You're under the radar as far as the tax man is concerned.It's very common at public institutions.

tlkdmc · Joined: 31 Mar 2015 Posts: 51

11 years in China, difference cities, many different banks, and never once have I been asked for my contract, tax receipts, or anything. I don't know what this guy is talking about being unable to convert money.

Deats · Joined: 02 Jan 2015 Posts: 503

The tax threshold is 4500RMB. But then after this the tax is so small, up to a certain level, then the next tax level kicks in which is way higher. For example, I was told on a 6000RMB contract the tax would be 36RMB this year (a uni told me this). When I got paid 6200RMB by my old uni, they paid about 90RMB in tax (it came from my salary).

If you are being paid cash in hand, the probability is the school declares you earn 4500RMB therefore no tax. Or, they just pay the tax for you and don't tell you, cos they tailor it into your contract.

Personally I would demand your salary be paid directly into a bank account - it's safer and I think it would force the company into paying your tax. Then there are no risks.

I don't know how much tax you pay on 20k, but it would be a fair bit. I remember when I got my final salary + air fare + bonus it was about 20k and they took 3k off, I think. Compared to the West it isn't much, but it feels a lot when you aren't used to paying tax - thankfully my uni paid it.

As for sending money, I don't get the problem. Ask the FAO at school to go with you and use their ID card. Having said that, most bank tellers have NO experience or knowledge of sending money, so never ask for documents. Your FAO should do this for you. If they won't (why wouldn't they!?), ask a Chinese teacher, or friend. It really is easy. I was so scared of the process after reading so much BS on forums about how hard it was, it took me 3.5 years to pluck up the courage to send all my money home. After the first transfer, I didn't know why the hell I'd been so bothered.

Son of Bud Powell · Joined: 04 Mar 2015 Posts: 179 Location: Since 2003

kev7161 · Joined: 06 Feb 2004 Posts: 5880 Location: Suzhou, China

I just finished ten years at one school. Whether or not they paid taxes is no longer my business. I always asked for my NET pay to be stated in my contract - - this was the amount I was to take home. They never had a problem with that. I've always been able to convert money at the bank. For a long while, I used to take in my contract, pay receipts, my FEC booklet, and passport. Lots of paperwork and lots of time. Now I just go in and convert to get $500 at a time. I can't be bothered with all that other stuff. Sending money home via bank-to-bank transfer has NEVER been a problem. I go home in a couple of weeks, so I'm currently going in nearly every day to convert until my vast (ha!) amount of end-of-contract, end-of-tenure money has been converted (the school gifted me with a big, fat red envelope, so an unexpected windfall that also needs to be converted).

tlkdmc · Joined: 31 Mar 2015 Posts: 51

wangdaning · Joined: 22 Jan 2008 Posts: 3154

Chinese tax authorities are not as anal as in the West, but they might get angry if you were pulling in something worth a take.