China income tax calculator: salary withholding and annual bonus

How to use it

1. Enter your monthly salary before tax and the social insurance and housing fund contributions taken from it — the "personal contribution" lines on your payslip, added together. Enter the annual bonus if you get one.
2. Choose the special additional deductions that apply to you: children (childcare under 3 and children's education are both 2,000 yuan a month per child), elderly parents, mortgage interest or rent, and continuing education. Yearly items, such as a professional certificate or serious-illness costs, go in the last box.
3. Read the average take-home pay, the tax on your salary for the year, the month-by-month table and the comparison of the two bonus methods. If the bonus falls in a range where a bigger bonus leaves you with less, a warning appears.

How Chinese salary tax works

Cumulative withholding

Employers withhold tax each month using the cumulative method set out in State Taxation Administration announcement 2018 No. 61. They add up your income from January to the current month, subtract 5,000 yuan for each month worked, your social insurance and housing fund, and your special deductions, and apply the annual tax table to that running total. The tax for the month is the total so far minus what has already been withheld. As the running total crosses 36,000 and then 144,000 yuan, the rate for later months rises from 3% to 10% and 20%, which is why the same salary produces less take-home pay in December than in January. Nothing is over-deducted: the total for the year equals the tax on the year's income. If the running calculation ever gives a negative amount, nothing is refunded during the year; the difference is settled in the annual filing.

The annual tax table

Under article 6 of the Individual Income Tax Law, taxable income is the year's income minus a basic deduction of 60,000 yuan, social insurance and housing fund, special additional deductions and other allowed deductions. The rates are 3% up to 36,000 yuan, 10% to 144,000, 20% to 300,000, 25% to 420,000, 30% to 660,000, 35% to 960,000, and 45% above that. The tax is taxable income × rate − a quick deduction of 0, 2,520, 16,920, 31,920, 52,920, 85,920 or 181,920 yuan (rate table published by the Shanghai tax bureau).

Special additional deductions

Since 1 January 2023 (State Council notice 2023 No. 13) childcare for each child under 3 and education for each child are 2,000 yuan a month; parents can have one of them claim it all or split it 50/50. Supporting elderly parents is 3,000 yuan a month for an only child; siblings share 3,000 and each claims no more than 1,500. The other amounts come from the 2018 interim measures: first-home mortgage interest 1,000 yuan a month; rent 1,500, 1,100 or 800 yuan a month depending on the city, not together with mortgage interest; 400 yuan a month while studying for a degree, or 3,600 yuan in the year you obtain a professional qualification; and serious-illness costs above 15,000 yuan, up to 80,000, claimed in the annual filing.

Annual bonus: separate or combined

Until 31 December 2027 (Ministry of Finance and STA announcement 2023 No. 30) an annual one-off bonus can be taxed on its own: divide it by 12, look up that amount in the monthly table (bands at 3,000, 12,000, 25,000, 35,000, 55,000 and 80,000 yuan; quick deductions 0, 210, 1,410, 2,660, 4,410, 7,160 and 15,160), and tax the whole bonus at that rate minus one quick deduction. Or it can be added to the year's income and taxed with the salary. The calculator works out the year's tax both ways.

Examples

A salary of 20,000 yuan with 2,000 of social insurance and 3,000 of special deductions leaves 10,000 yuan of taxable income a month. January to March stay under 36,000 in total, so 300 yuan is withheld each month. In April the total reaches 40,000; the tax on that is 40,000 × 10% − 2,520 = 1,480, minus the 900 already withheld, so 580 is withheld. From May it is 1,000 a month. The year's total is 9,480 yuan, exactly 120,000 × 10% − 2,520. Take-home pay falls from 17,700 in January to 17,000 in December.

One extra yuan of bonus costs 2,310.10 in tax, because the whole bonus moves to the higher rate while only one monthly quick deduction is subtracted. The bonus has to reach 38,566.67 before the take-home amount catches up. There are six such ranges: 36,000–38,566.67, 144,000–160,500, 300,000–318,333.33, 420,000–447,500, 660,000–706,538.46 and 960,000–1,120,000 yuan.

With 60,000 yuan of taxable salary income and a 36,000 bonus, taxing the bonus separately gives 4,560 for the year against 7,080 combined. But if deductions exceed the salary, leaving −20,000, the same bonus costs 1,080 separately and only 480 combined.

Limits

• The salary and deductions are assumed to be the same every month. A pay rise, a job change or starting mid-year changes the monthly amounts, although the tax for the year is still based on the year's totals.
• Only salary and the annual bonus are covered. Fees for services, author's remuneration, royalties, business income, dividends and interest are not.
• You enter your own social insurance and housing fund. Contribution bases and rates differ by city, and the calculator does not work them out.
• Other deductions are a single yearly figure. Whether an item qualifies, and for how much, is set by the rules and the IIT app.
• This applies to tax residents of mainland China. Non-residents and the rules for foreign individuals are not covered.

Sources and further reading

• Individual Income Tax Law of the PRC (STA database, in Chinese)
• STA announcement 2018 No. 61: withholding rules (in Chinese)
• Shanghai tax bureau: IIT rate tables (PDF, in Chinese)
• MoF and STA announcement 2023 No. 30: annual bonus (in Chinese)
• State Council 2018 No. 41: special additional deductions (in Chinese)
• State Council 2022 No. 8: childcare under 3 (in Chinese)
• State Council 2023 No. 13: higher deduction amounts (in Chinese)