Job Discussion Forums

killian · Posted: Fri Mar 13, 2009 4:29 am Post subject: contract completion bonus?

do you have a contract completion bonus clause in your contract? if so, what is the tax rate (if any) on such?

Sonnibarger · Joined: 15 May 2007 Posts: 320 Location: Wuhan

not sure about taxes... I receive 8000 flight and 5000 bonus... im hoping tax free

bradley · Joined: 28 Mar 2005 Posts: 235 Location: China

I also get a completion bonus. I remember I paid some taxes on some bonuses but I can't remember how much.

evaforsure · Joined: 26 Jun 2004 Posts: 1217

As I understand it... it iwll be ajusted according to the ban the payment places ur salary in with the addtional payment, but if the school isnt paying taxes on your income, u may not pay any...I didnt at my first job...but the pay was in a ban that was not taxable...

Buck Lin · Joined: 13 Oct 2008 Posts: 405 Location: nanchang china

Get a receipt from them and tell them that you are also filing a tax return for the money you earned on their stock market. This tax you are paying probably goes into the accountants pocket. Tell them you paid tax on your air ticket so your accountant needs one to get you a rebate. Trip them up. Fun to do. Make sure they stamp it officially and put the deans name on it.

ymmv · Joined: 14 Jul 2004 Posts: 387

The bonus is taxable.

The airfare is non-taxable if used to actually buy a ticket (official receipt needed). If just paid in cash, it's the same as a bonus.

As to the amount of tax, they'll probably just dump it on top of your pay for that month and calculate the tax on that number. To run that calculation, read this post:

http://forums.eslcafe.com/job/viewtopic.php?t=66479

There may be another way to calculate it by treating it as spread out over 12 months (it's a year-end bonus) but it's too complex to explain here and I've never tried it.

Try the following page to figure it out if you're brave, but keep in mind, once you figure it out, you're probably gonna have to explain it to the accounting department in Chinese. And they probably won't believe you or want to take the time to do the extra calculations:

http://www.china-tax.net/tax/content03-2.html

Or hire a Chinese accountant. But the cost of that will probably eat up the tax savings.

But in short, the answer is bonuses are taxable. Somehow.

ymmv

Buck Lin · Joined: 13 Oct 2008 Posts: 405 Location: nanchang china

My understanding of tax is that you don't pay if you are making less than 5,200 as of last year and it is about 5% for the amount around this sum. We are at the low end of the taxation rates here in China. I recieved reciepts here for taxes at some places and others the final payment was made like a gangster paying a drug dealer in some hidden place.
I like to pay taxes in China because it legitamizes my stay here. But I always get a receipt with the chop. Taxation is something the Chinese are working out here. As stated before on this forum the Chinese have two incomes, the disclosed and the hidden. The hidden income is the important one.

ymmv · Joined: 14 Jul 2004 Posts: 387

Raindrops · Joined: 18 May 2009 Posts: 142 Location: PRC

No matter what!

If you pay a TAX!

You must ask for a "fapiao" in return!