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englishgibson
Joined: 09 Mar 2005
Posts: 4345
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 Posted: Sun Apr 30, 2006 5:24 am Post subject: The Tax rate |
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Sorry to pop in guys, but it looks just hilarious to see two bullies on. One often joins in on discussions that are unclear to him using variety of questionable resources and the other one suffers of high blood pressure and low self-esteem.
It�d be good for all of us, if you both took a couple of aspirins.
Peace to all
And
Cheers and beers |
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clark.w.griswald
Joined: 06 Dec 2004
Posts: 2056
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| Posted: Sun Apr 30, 2006 6:02 am Post subject: |
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One thing I will say in support of Joe.C is that he brings a lot of good information to this forum, in a clear and concise way.
Given the choice between a board full of 'Joe.C's' and a board full of people who make posts here not to offer information but to have a go at others I will take the board full of Joe.C's thanks very much.
I come here for information not personal grudge matches and one-upmanship at the expense of other users. This sort of behavior is counter productive as it discourages newbies from posting here and just calls into question the value of this board as a discussion forum. |
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bendan
Joined: 18 Jun 2004
Posts: 739
Location: North China
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| Posted: Mon May 01, 2006 2:43 am Post subject: |
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The tax on 8000 would be 355, I think.
The tax free allowance is 4800.
The next 500 is taxed at 5% = 25.
The next 1500 is taxed at 10% = 150.
The last 1200 is taxed at 15% = 180.
Total of 355. This is the same as Joe C's figure (15% of 3200, then subtract 125)
The quick deduction figures are just to save you time calculating things.
Why not make a sticky of tax you should pay on various salaries:
4500 - 0
5000 - 10
5500 - 45
6000 - 95
7000 - 205
8000 - 355
9000 - 505
10000 - 665
11000 - 865
12000 - 1065
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Malsol
Joined: 06 Mar 2006
Posts: 1976
Location: Lanzhou
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| Posted: Mon May 01, 2006 2:56 am Post subject: |
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| It isn't that hard to disagree without being disagreable. |
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Malsol
Joined: 06 Mar 2006
Posts: 1976
Location: Lanzhou
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| Posted: Mon May 01, 2006 2:57 am Post subject: |
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| clark.w.griswald wrote: |
One thing I will say in support of Joe.C is that he brings a lot of good information to this forum, in a clear and concise way.
Given the choice between a board full of 'Joe.C's' and a board full of people who make posts here not to offer information but to have a go at others I will take the board full of Joe.C's thanks very much.
I come here for information not personal grudge matches and one-upmanship at the expense of other users. This sort of behavior is counter productive as it discourages newbies from posting here and just calls into question the value of this board as a discussion forum. |
WELL SAID! Olive branch extended. Will Joe grasp it? Hoping so! |
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bendan
Joined: 18 Jun 2004
Posts: 739
Location: North China
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| Posted: Mon May 01, 2006 3:07 am Post subject: |
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| By the way, Clark, your info is correct, too, but you are not using it correctly. Under your calculations, it would be better to earn 6750 than to earn 6850. Clearly that is not a sane proposition, even in China. The tax rates only apply to the incremental income, not all of it. |
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boxcarwilly
Joined: 23 Jan 2003
Posts: 85
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| Posted: Mon May 01, 2006 3:33 am Post subject: |
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| kev7161 is correct with the calculation. I have read the english version of the code and I have experience with taxes. When I arrived at my present school I did the calculations and gave them to the accountant to verify. Don't forget to get the proper receipts from the school or else your contribution to the tax base might end up in somebody's pocket who is not part of the tax department. |
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Joe C.
Joined: 08 May 2003
Posts: 993
Location: Witness Protection Program
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| Posted: Mon May 01, 2006 3:38 am Post subject: |
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| bendan wrote: |
The tax on 8000 would be 355, I think.
The tax free allowance is 4800.
The next 500 is taxed at 5% = 25.
The next 1500 is taxed at 10% = 150.
The last 1200 is taxed at 15% = 180.
Total of 355. This is the same as Joe C's figure (15% of 3200, then subtract 125).
The quick deduction figures are just to save you time calculating things.
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It seems your method of calculating is correct. I suppose the tax bureau just tries to make it idiot proof. This is China.
A sticky might not be a bad idea. However, I'm not sure how it would deal with the other variables involved like offsetting tax liability with receipts for expenditures in certain allowable categories. Also, many employers don't know and / or follow the tax rules while others just "tax" you and keep the "tax" themselves. There's also the issue of provincial tax bureaus implementing the tax law in their own manner. For example, there is a relatively new tax-free base for locals of the first 1800 of income. While up to this year it was only 600 (or some figure like that) in Beijing and Shanghai, Guangdong has been giving the 1800 tax-free base for the past three years.
I think that because China is so inconsistent throughout all the provinces on just about every matter conceivable, it is virtually impossible to say with scientific certainty just what the policy is. |
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jeffinflorida
Joined: 22 Dec 2004
Posts: 2024
Location: "I'm too proud to beg and too lazy to work" Uncle Fester, The Addams Family season two
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| Posted: Mon May 01, 2006 3:50 am Post subject: |
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First, thank you for all your input and a bigger thanks for not hijacking this thread into an inane arguement over nothing...
Now the school has proposed this to me.
On an assumed salary of 8000 rmb for base, they say they will pay me 4000 rmb a month for salary and 4000 rmb a month for apartment allowance so that I would have to pay little or no tax.
So is this legal and is the apartment allowance not taxable? |
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Joe C.
Joined: 08 May 2003
Posts: 993
Location: Witness Protection Program
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| Posted: Mon May 01, 2006 4:04 am Post subject: |
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| jeffinflorida wrote: |
Now the school has proposed this to me.
On an assumed salary of 8000 rmb for base, they say they will pay me 4000 rmb a month for salary and 4000 rmb a month for apartment allowance so that I would have to pay little or no tax.
So is this legal and is the apartment allowance not taxable? |
Legal? Probably not. It would probably be called tax evasion.
However, that doesn't mean that you shouldn't do it or that if you do it that you will get busted. I have seen numerous schools ask FTs to provide ID from a Chinese friend(s) in order to split the FTs pay into two or more separate employees thus reducing, if not eliminating, tax liability. I believe that it is the employer's duty to withhold tax and if they, under whatever scheme they devise, do not, the risk is theirs and you would not be in a jam -- not that anything would ever happen anyhow.
In order for the school's plan to be legal, I think they'd have to pay you the 8000 as salary and you would then have to provide a "fa piao" for 4000 paid as rent and then they'd use that to lower (or eliminate) your tax liability. Again, though, I wouldn't worry about it. |
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jeffinflorida
Joined: 22 Dec 2004
Posts: 2024
Location: "I'm too proud to beg and too lazy to work" Uncle Fester, The Addams Family season two
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| Posted: Mon May 01, 2006 4:12 am Post subject: |
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Thanks Joe C.
Worried about tax evasion? Not my concern at all.
My biggest concern is something that has been stated: my employer taking out tax and keeping it.
That's more of a reality to me.
I will sit down with HR and discuss this in the near future to ensure that I pay minimum tax and that I get a true receipt for anything that hold back.
Thanks again to all the responders. |
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Bayden
Joined: 29 Mar 2006
Posts: 988
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| Posted: Mon May 01, 2006 4:33 am Post subject: |
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| Quote: |
Schedule of Individual Income Tax Rates (applicable to incomes from wages and salaries)
Not exceeding 500 yuan - 5%
Exceeding 500 yuan but not exceeding 2,000 yuan - 10%
Exceeding 2,000 yuan but not exceeding 5,000 yuan - 15%
Exceeding 5,000 yuan but not exceeding 20,000 yuan - 20%
Exceeding 20,000 yuan but not exceeding 40,000 yuan - 25%
Exceeding 40,000 yuan but not exceeding 60,000 yuan - 30%
Exceeding 60,000 yuan but not exceeding 80,000 yuan - 35%
Exceeding 80,000 yuan but not exceeding 100,000 yuan - 40%
Exceeding 100,000 yuan - 45% |
Assuming these figures are correct, on an 8,000.00 salary, tax at 15% would be paid on the taxable amount over 4,800.00 (3,200.00). 480.00.
Something you can do to reduce your tax, that is if the people in your finance department aren't to lazy and the finance director agrees, is to submit reciepts as expenses which can be deducted from the taxable amount. Example
Salary, 8,000
tax free threshhold 4,800
taxable income 3,200
reciepts 1,000
Taxable income, 2,200 x 15% 330.
The receipts must be tax receipts (Fa piou) with the two stamps on them.
Your phone bill, restaurant bills, taxi receipts, clothing, pretty much anything. Always get a fa piou.
This is perfectly legit, talk to your finance director about it. |
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Joe C.
Joined: 08 May 2003
Posts: 993
Location: Witness Protection Program
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| Posted: Mon May 01, 2006 5:21 am Post subject: |
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| Bayden wrote: |
Assuming these figures are correct, on an 8,000.00 salary, tax at 15% would be paid on the taxable amount over 4,800.00 (3,200.00). 480.00.
Something you can do to reduce your tax, that is if the people in your finance department aren't to lazy and the finance director agrees, is to submit reciepts as expenses which can be deducted from the taxable amount. Example
Salary, 8,000
tax free threshhold 4,800
taxable income 3,200
reciepts 1,000
Taxable income, 2,200 x 15% 330.
The receipts must be tax receipts (Fa piou) with the two stamps on them.
Your phone bill, restaurant bills, taxi receipts, clothing, pretty much anything. Always get a fa piou.
This is perfectly legit, talk to your finance director about it. |
Actually, the tax liability is 355. You forgot to deduct the 125 standard deduction.
The use of receipts to lower tax liability has been discussed before in this thread. Not all schools will allow you to do so regardless of how legit it is because they either don't know about how the tax law should be implemented or they find it too burdensome to even care.
In any event, "pretty much anything" is definitely not allowable. Only those expenses that fall into carefully defined categories such as transportation, food, housing and work-related clothing & equipment are allowable. Any employer that allows you to use receipts to reduce your taxable income will be pretty careful because if they allow you to claim items that are not allowed it is the employers responsibility to pay the real tax amount -- plus penalties. |
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Bayden
Joined: 29 Mar 2006
Posts: 988
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| Posted: Mon May 01, 2006 7:34 am Post subject: |
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| In any event, "pretty much anything" is definitely not allowable |
Meals (entertainment) Taxis (transport) most things you'll be able to find a way.
When I buy groceries at the supermarket it's necessary to take the checkout reciept to another counter to get a fa piou. They're happy to make the fa piou out for anything at all. (office supplies for example). 
I had so many one month they actually paid me OVER (still trying to work that one out) |
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englishgibson
Joined: 09 Mar 2005
Posts: 4345
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| Posted: Mon May 01, 2006 8:00 am Post subject: The Tax rate |
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Quite educational on taxes in China and good numbers displayed, I must say. Discussing it here on forums might trigger some "alarms" in the Chinese tax office I am afraid.
We've been enjoying quite a "free ride" in China as oppose to Vietnam and their foreign teachers that have to go through much more hassle than us here. Well, awarness is important, isn't it
| Quote: |
I come here for information not personal grudge matches and one-upmanship at the expense of other users. This sort of behavior is counter productive as it discourages newbies from posting here and just calls into question the value of this board as a discussion forum.
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Absolutely agreed and let's live up to it
| Quote: |
Now the school has proposed this to me.
On an assumed salary of 8000 rmb for base, they say they will pay me 4000 rmb a month for salary and 4000 rmb a month for apartment allowance so that I would have to pay little or no tax.
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Many schools in China have such practices. "NO TAXES" is a good way to attract foreign teachers.
| Quote: |
So is this legal and is the apartment allowance not taxable?
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I'll put it this way, "It's more legal for you than for the school to do it that way". It'd be tough to get the official receipt for your appartment payments from either the owner or the school, but if you could get that in the 4,000 monthly sums, you'd be most likely off the hook there.
| Quote: |
| My biggest concern is something that has been stated: my employer taking out tax and keeping it. |
Every time you get paid, you should sign a proper documentation of accepting your salary. That tax shall be there on it well noted. Your a*s is covered that way, and your employer's a*s isn't in the case of cheating.
However, keep in mind that we are in China. Employers often get off any charges easily by bribing the officials. Then, keep in mind that in your case, it'd be a bit tougher .... to bribe....
Peace to all
And
Cheers and beer
_____________________________________________________________
Hopefully China will not become Vietnam |
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