INCOME TAX CALCULATIONS

Income tax is directly taken from your salary each month and is directly paid to the local and state tax authorities. The government run tax website verifies that the monthly deductions for each teacher are correct.

When calculating your monthly tax burden in China it is important to remember several things:

  • The first 4800 RMB of your month salary is tax free
  • Housing allowance is tax free

STEP ONE

Take your monthly salary and deduct 4800 RMB.

STEP TWO

Use the amount left from step one to find out what tax bracket you are in and what the quick deduction is:

Table for Calculating Tax Liability Based on your Monthly Salary

 

Bracket

   Income Remaining from Step One

Percent Tax

   Quick Deduction

1

   0 – 1,500 RMB

 03%

 0 RMB

2

   1,501 – 4,500 RMB

 10%

 105 RMB

3

    4,501 – 9,000 RMB

 20%

  555 RMB

4

      9,001 – 35,000 RMB

 25%

 1005 RMB

5

      35,001 – 55,000 RMB

 30%

  2755 RMB

STEP THREE

Take the amount left from step one, multiply it by the tax rate and subtract the quick deduction. The amount left is the tax that you owe each month.

EXAMPLES

  1. Salary: 10000 RMB  (which is what all our inexperienced teachers start on)
    10000 – 4800 = 5,200
    5,200 x 0.20 – 555 = 485 RMB tax paid per month
  2. Salary: 11000 RMB (which is what our experienced teachers start on)
    11000 – 4800 = 6200
    6,200 x 0.20 – 555 =  685 RMB tax paid per month
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