Job Discussion Forums

[wawaguagua]

I work for a public university. At my department chair's request, and out of desire to make a little bit of extra money, I decided to work some overtime at the beginning of my winter holiday teaching an extra week-long course for adult learners.

The new term just began last week and my FAO told me I'd soon recieve my salary for January and February. I recieved it, but it seemed a bit short. Three days later, another deposit came adding an addition one thousand yuan. I assumed this was a correction to the previous short-handed deposit.

It turns out, the second deposit is actually for my holiday overtime hours. By paying my salary for the previous two months as well as my holiday overtime all at once, they put me in a high tax bracket that resulted in my salary being deducted a very high amount, roughly equal to the amount I was supposed to earn altogether for my week of overtime. Now, it's as if the extra week's work I put in was completely free on my part.

Naturally, I'm extremely dishearted by this (to put it in nicest terms). They easily could have avoided such a high tax on my salary by spacing out the payments a bit over a few months instead of paying it all at the same time. Since they already paid the salary (and thus the taxes), it seems there's nothing I can do to fight it.

Has this ever happened to you?

[wawaguagua]

Correction: After reviewing this website -

http://www.shanghaihalfpat.com/income-tax-for-foreigners-in-china/

- And doing every possible calculation, I've discovered what happened:

1. The first deposit is my pay for January and February, combined as if they were one month's pay and taxed accordingly (putting me in a much higher tax bracket than I normally would be, resulting in a loss of 1000+ RMB as opposed to a mere 60 RMB if I'd been paid separately).

2. The second deposit is indeed the winter overtime, which is short for a different reason. Before I'd accepted the overtime, I negotiated with the department chair for a higher hourly pay rate than the one initially proposed. It appears he forgot our negotiation and only paid the pre-negotiation hourly rate, which I should be able to clear up after a quick chat. No taxes appear to have been deducted from this.

So now, my issue is that I've lost an additional 1000 RMB or so to taxes compared to what I'd normally be taxed, simply due to my January and February salaries being paid at the same time instead of during separate months. Is this normal? Should I just accept this as "the way things are," or is there a legitimate grievance here?

It especially worries me as I stand to lose even more money to taxes at the end of my contract, when my final two salaries, my flight allowance, and all of my other benefits will be paid out at the same time. Are there any precautionary measures I can take there?[/b]

[wawaguagua]

Can other posters confirm whether or not it's standard for monthly salary paid after the holiday to be taxed this way? It's pay for two months, but it's being taxed as if it's a lump sum for one month. It pushes me from my regular 10% tax bracket to double that 20% all because the payroll office is closed over the holiday.

My previous school (also a public university) paid me in cash without taxes taken out, so this is new territory for me.

[LarssonCrew]

Tax?

Lol, I always got paid into three different bank accounts so that I avoided paying all tax.

Tax ends up stinging you hard after say 15000 so it's best to get a lower paying initial job then just smack the extra money in cash from parents for privates.

Ain't no one paying a penny of tax on 300 per hour from a private student.

[7969]

[wawaguagua]

[LarssonCrew]

79 perhaps I've paid some, I'm not really sure.

I've been ripped off by some employers so I think it's par for the course. They withhold my spring festival pay, fair enough I'll just not pay tax in all my 5 years there.

[jimpellow]

I would imagine that China's taxation system works like many in that you are taxed at a higher percentage if you receive pay on a less frequent basis, but come filing time, you are eligible for it to be refunded. It may be that the school personnel overlooked that you cannot file for a refund. More likely though is that they just don't care. I have heard of good schools that will help a foreign teacher come end of contract, by being "creative", so the foreign teacher avoids a big tax hit. It doesn't sound like your school will act so...

[Lucky707]

My school does the opposite: they spread out any allowances/additional salary over as many months as possible to reduce the tax burden on me. Have you considered talking to your school about this?

[wangdaning]

I work at a public uni, for a joint program. Some of my pay is from the uni and some from the partner side. The pay over the holiday was regular. The actual time off for spring festival was not the whole month, so they have no excuse for lumping your pay like that. I would complain. What are the terms in your contract about pay periods? Surely by paying you one salary so late they must have paid late?

[The bear]

I don't feel too guilty about not paying taxes on private work.


The tax reform, made more generous after a wave of online protest against earlier government proposals for stingier changes, means that only about 8 percent of Chinese will pay any income tax at all, according to Wang Jianfan, deputy director of the Finance Ministry’s tax policy department.

http://m.csmonitor.com/World/Asia-Pacific/2011/0831/China-to-cut-income-tax-for-60-million-people

[wawaguagua]

For those of you who pay taxes on your salary, how do you avoid getting hit at the end of each contract period when it's time for the school to pay up on all of those benefits listed in the contract? I just calculated what my taxes will look like when combining my salary for June and July, plus the airfare reimbursement, travel allowance, and another "miscellaneous expenses" bonus. When paid all together in one month, I'll get hit by almost 4000 yuan in taxes! Yikes!

Presumably these benefits should be categorized as tax deductable, but that requires a receipt of some sort as proof. Airfare reimbursement, for example, would presumably need an actual ticket in hand. Correct?

Also, does Chinese tax law require that all payments made during a single month must be taxed as if it's one monthly salary? If they're paying me for two months of work in the same month, there's a logical explanation for why my pay during that month is so huge and it seems irrational to tax it as if it's one month's pay. I don't know how it works, though...

[doogsville]

My uni pays in advance for the six week winter holiday, same in the summer. They deposit two months salary in the bank at one time. They tax it as normal though, since they're depositing two months salary at once, not one months salary at double the usual rate. Shouldn't your uni be doing the same? Just because they are depositing two months salary at once, they should still record it as two separate months and tax accordingly. Otherwise they're basically saying 'we're paying you double for January, and taxing it at the higher rate, and nothing for February'. That makes no sense. I think you need to go and talk to them and point out their error.

[wawaguagua]

[OhBudPowellWhereArtThou]