How Much Tax Do You Have to Pay?

After a long long discussion, Law of the PRC on Individual Income Tax (“IIT Law”) has finally been promulgated at June 30, 2011 and can answer your question of "How Much Tax Do You Have to Pay?".

According to the law, two types of expats should pay IIT:

  1. For expats who stayed within the territory of China more than one year, shall pay IIT for his income obtained in and/or outside the territory of China ;
  2. for expats who does not stay within the territory of China or has stayed within the territory of China for less than one year, shall pay IIT for his income obtained within the territory of China.

Foreign employees should pay IIT according to the rates listed as following:

Grade

1

2
.

3
.

4
.

5
.

6
.

7

Monthly Taxable Income

income of 1,500 yuan or less

that part of income in excess
of 1,500 to 4,500 yuan

that part of income in excess
of 4,500 to 9,000 yuan

that part of income in excess
of 9,000 to 35,000 yuan

that part of income in excess
of 35,000 to 55,000 yuan

that part of income in excess
of 55,000 to 80,000 yuan

that part of income in excess
of 80,000 yuan

Tax Rate %

3

10
.

20
.

25
.

30
.

35
.

45

Note:

  1. The monthly taxable income in this Schedule refers to the balance after deducting 3,500 Yuan and additional expenses from the monthly income;
  2. the above mentioned additional expenses may be determined in light of the foreign taxpayer’s average income level, living standards and the change of exchange rates, the scope and standards for which shall be formulated by the State Council.
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