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wawaguagua
Joined: 10 Feb 2013
Posts: 190
Location: China
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 Posted: Fri Mar 18, 2016 6:37 pm Post subject: |
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[quote="OhBudPowellWhereArtThou"]
| wawaguagua wrote: |
Airfare reimbursement isn't salary. You are repaid for what you spent for the airplane ticket. Have you been collecting airfare reimbursement at different schools even though you haven't returned to your home country?
I don't think that return airfare is taxable. Your school can get around taxation if return airfare is paid out simply by requiring you to buy a ticket home then reimbursing you for it. When I've indicated that I would return home rather than move on straight to another school, the school bought the ticket and gave it to me the day that I left. |
I've only worked at two schools, this one being the second. As stated above, the first school where I worked for two years always paid me in cash. I never asked questions and neither did they. I just got a wad of cash in the amount that the contract said I would for airfare reimbursement. I don't have any plans to return home (too far away, too expensive), so yes, I see the airfare money as nothing more than a bonus for completing the contract that I can use to help pay off my student loans. |
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jimpellow
Joined: 12 Oct 2007
Posts: 913
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| Posted: Fri Mar 18, 2016 8:44 pm Post subject: |
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| OhBudPowellWhereArtThou wrote: |
| wawaguagua wrote: |
What about your airfare reimbursement? How does that work out? If you don't actually use your reimbursement to buy a ticket, it's basically just added income and pushes you into a higher tax bracket, right?
I used to think I'd just stay in China for a long time and avoid travelling home so that I could save up as much money as possible by holding on to the airfare reimbursement pay. Now it seems that could kick me in the ass at this current workplace. |
Airfare reimbursement isn't salary. You are repaid for what you spent for the airplane ticket. Have you been collecting airfare reimbursement at different schools even though you haven't returned to your home country?
I don't think that return airfare is taxable. Your school can get around taxation if return airfare is paid out simply by requiring you to buy a ticket home then reimbursing you for it. When I've indicated that I would return home rather than move on straight to another school, the school bought the ticket and gave it to me the day that I left.
As far as being taxed for free housing, etc. (at a public university) goes, that hasn't figured into the mix.
Yet. |
I think the airfare may be taxable in theory. It seems on paper that it is supposed to act as a tax allowance before determining income tax. Long time since any accounting classes, but I think it ends up being a wash.
It seems that there are several tax allowances allowed to foreigners including food and relocation expenses. They have to be in contract and the foreigner must provide a fapio every month (to whom and under what circumstances I have no idea).
Overall, I get the feeling that foreign teachers are paying much more in taxes than is necessary. But to meet the conditions and put forth the effort to receive the allowances is beyond a teacher's knowledge and a school's desire.
Last edited by jimpellow on Sat Mar 19, 2016 12:23 am; edited 1 time in total |
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LarssonCrew
Joined: 06 Jun 2009
Posts: 1308
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| Posted: Fri Mar 18, 2016 11:36 pm Post subject: |
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Honestly, the Chinese get around so many regulations so I don't really see it as fair to tax you on that.
When I worked at a uni and saw the chinese grabbing their fat red envelopes around Chinese new Year do you think their 20,000 RMB gift was taxed?
Of course it wasn't. When a student hands over 10,000 in supermarket cards to buy a ticket n a course or get special treatment on an exam does the professor submit that as payment? Of course not. |
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wangdaning
Joined: 22 Jan 2008
Posts: 3154
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| Posted: Sat Mar 19, 2016 12:32 am Post subject: |
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| LarssonCrew wrote: |
Honestly, the Chinese get around so many regulations so I don't really see it as fair to tax you on that.
When I worked at a uni and saw the chinese grabbing their fat red envelopes around Chinese new Year do you think their 20,000 RMB gift was taxed?
Of course it wasn't. When a student hands over 10,000 in supermarket cards to buy a ticket n a course or get special treatment on an exam does the professor submit that as payment? Of course not. |
So, what exactly is the logic here. Assassins take money to kill people, so I might as well do it, too. |
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jimpellow
Joined: 12 Oct 2007
Posts: 913
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| Posted: Sat Mar 19, 2016 12:46 am Post subject: |
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| LarssonCrew wrote: |
Honestly, the Chinese get around so many regulations so I don't really see it as fair to tax you on that.
When I worked at a uni and saw the chinese grabbing their fat red envelopes around Chinese new Year do you think their 20,000 RMB gift was taxed?
Of course it wasn't. When a student hands over 10,000 in supermarket cards to buy a ticket n a course or get special treatment on an exam does the professor submit that as payment? Of course not. |
I don't think you are taxed on it if done properly. I think it is added to taxable income and then the allowance reduces it accordingly. China Briefing had the best information on it. The foreign worker is allowed two allowances per tax year for a return home.
I think the Chinese system is set up to tax at a high rate knowing that Chinese will be Chinese(or people will be people) and find every way imaginable to not have to pay any of it it. The article that "The Bear" linked to above stated that in 2011 only 8% of Chinese pay any income tax.
I would think that perhaps the income tax on the foreigner is in theory part money grab and part expectation that the school and foreigner will do proper tax planning to minimize taxable income.
I would think rare is the ESL school that takes advantage of all the allowances for an ESL teacher. |
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wangdaning
Joined: 22 Jan 2008
Posts: 3154
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| Posted: Sat Mar 19, 2016 1:54 am Post subject: |
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| Most Chinese work under the table. They simply do not declare, and the government is not out to rob them. Oh, how I miss home. |
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doogsville
Joined: 17 Nov 2011
Posts: 924
Location: China
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| Posted: Sat Mar 19, 2016 2:44 am Post subject: |
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| wawaguagua wrote: |
What about your airfare reimbursement? How does that work out? If you don't actually use your reimbursement to buy a ticket, it's basically just added income and pushes you into a higher tax bracket, right?
I used to think I'd just stay in China for a long time and avoid travelling home so that I could save up as much money as possible by holding on to the airfare reimbursement pay. Now it seems that could kick me in the ass at this current workplace. |
My uni only pays airfare if you've come directly from your home country or you fly home for the summer holidays. I've done neither since working here, so I don't get airfare. Honestly, I have an excellent package so I don't feel I'm missing out. My colleagues who have gotten the airfare weren't taxed on it, since it's not salary or bonus strictly speaking. They had to provide original tickets to qualify also. I do get a 1000 RMB bonus at the end of each semester which is taxed though.
My last employer, a private school, gives a 5k bonus instead of airfare. If you provided air tickets or other suitable receipts to the payroll department then you avoided tax, otherwise it was added to the last month of your contracts salary and taxed accordingly, which mean a large chunk disappeared. |
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wawaguagua
Joined: 10 Feb 2013
Posts: 190
Location: China
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| Posted: Sat Mar 19, 2016 2:57 am Post subject: |
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| jimpellow wrote: |
I don't think you are taxed on it if done properly. I think it is added to taxable income and then the allowance reduces it accordingly. China Briefing had the best information on it. The foreign worker is allowed two allowances per tax year for a return home. |
It seems all allowances require a fapiao of some kind though, and thst would presumably be a receipt of air ticket, right? If I'm not actually buying a ticket, there's no proof that the airfare reimbursement is anything more than taxable income (which, I mean, if we're calling a spade a spade, in my case it is just additional income).
The Chinese teachers I talked to claim that their payments from the previous two months were all paid at the same time and taxed as one month, too. They claim the school just works this way and nobody is happy about it, but there's nothing they can do because they're just teachers. I don't know if they're just telling me that to save face or what.
I sent a message to a previous foreign teacher who only worked here for one year and she claimed she doesn't remember being taxed like that... |
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wawaguagua
Joined: 10 Feb 2013
Posts: 190
Location: China
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| Posted: Sat Mar 19, 2016 3:03 am Post subject: |
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| Also, I've been reading about other foreign workers in China who hold on to restaurant receipts, electricity bills, and other taxed expenses and hand them in before the next pay period to reduce their tax burden. Is that still a thing, and is that open to everyone? Does anyone here do that? I use my online bank card to pay most restaurant bills here (Meituan and so on), so I'm not sure how I'd even get a paper fapiao that way. |
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asiannationmc
Joined: 13 Aug 2014
Posts: 1342
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| Posted: Sat Mar 19, 2016 3:20 am Post subject: |
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| Also, I've been reading about other foreign workers in China who hold on to restaurant receipts, electricity bills, and other taxed expenses and hand them in before the next pay period to reduce their tax burden. |
recently ran into a couple who worked at an international school in Beijing and they told me that their school had negotiated new contracts and as soon as the "John Hancock" was dry, notified them that the receipts handed in for expenses, (they received money back for some expenses incl. restaurants, elec. scripts and so forth) would no longer be accepted. Not only foreigners, but locals have told me that they are on the receiving end of this same kind of "tightening the belt" around their take home pay. |
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wawaguagua
Joined: 10 Feb 2013
Posts: 190
Location: China
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| Posted: Sat Mar 19, 2016 11:32 am Post subject: |
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Hm...
As the salary for July is paid out before the contract ends, it gets lumped in with June's salary, as well as the airfare money, a travel allowance payment, a "miscellaneous expenses" bonus, and an extra 500 yuan that's supposed to cover out-of-pocket medical expenses. When all of these are combined together, it amounts to a huge chunk of change that, going by the standard tax calculator, would end up with a significant portion（almost 4000 yuan) being skimmed out from taxes. That seems almost unbelievable.
I asked a former foreign teacher what happened at the end of her contract with all these pay-outs. She doesn't remember them being taxed to that high degree. She recalls the travel allowance and the miscellaneous expenses bonus being paid in cash, which is very strange considering how adamant they've been with me about doing everything above table and in bank accounts.
What I've got from everyone's experiences here is that there's simply no one right answer to how to deal with this (which I guess, knowing how things work over here, there wouldn't be). I guess my best case scenario would be to argue that the final payments for June and July should be taxed separately even though they're paid in the same month, and see if I can get the allowances paid in cash as the other foreign teachers did. No ideas about the travel allowance - My contract actually says it should be paid "at least two months before the end of the contract," so if it counts as taxable income, I could request that it be split up and paid over two months to save some tax burden. |
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