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How to calculate Personal Income Tax (PIT) in China – Part 1

​Although the personal income tax system in China may be difficult to understand, it doesn’t take a genius mathematician to work it out. Here are some simple steps for a better understanding:

Quick calculation guide based on annual income as below (Updated as of 2019 onwards):

E.g. My monthly salary is 20,000RMB, monthly taxable income amount would be 15,000RMB
20,000 – 5000 = 15,000 RMB

*Optional* If I have social insurance, the amount of social insurance contributed by the employee would also be deducted. “Monthly Taxable Income (RMB) – Social Insurance Employee Contribution” 

E.g. My monthly taxable income is 15,000 RMB, I am employed under a 12 months contract, My annual cumulative taxable income would be 180,000 RMB

15,000 x 12 = 180,000 RMB

E.g. According to the table above, my annual cumulative taxable income is 180,000 RMB, it would fall in the Grade 3 tax bracket with a tax rate of 20%, quick deduction amount of 16,920 RMB. My annual personal income tax would be 19,080 RMB.

180,000 x 0.2 (20%) – 16,920 = 19,080 RMB

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Pro-1 Human Resource Consultants Ltd. provides premium recruitment services for Chinese clients and foreign candidates. We specialize in the education institution sector all over China. We dedicate ourselves in offering professional and first-class staffing solutions in the industry.

www.pro1hr.com

By Pro 1

Pro-1 Human Resource Consultants Ltd. provides premium recruitment services for China clients and foreign candidates. We specialize in the education institution sector all over China. We dedicate ourselves in offering a professional and first-class staffing solutions in the industry.