China, People's Republic of

Individual - Sample personal income tax calculation

Last reviewed - 30 June 2020

Below is a sample calculation of the annual IIT liability on comprehensive income derived by a resident individual for the year 2019 (for illustrative purpose).

Assumptions:

  • The individual derives employment income of CNY 35,000 per month and one-off remuneration for labour services in the amount of CNY 50,000.
  • The individual makes monthly contribution of CNY 5,000 to China statutory social security and housing fund (i.e. specific deductions).
  • The individual claims the following specific additional deductions for the whole year:
    • Child education for one qualified child.
    • Mortgage interest.
Calculation of annual IIT on comprehensive income CNY CNY
Employment income 420,000
Remuneration for labour services 50,000
Less: 20% of gross remuneration for labour services (10,000)
Total comprehensive income 460,000
Less: Personal deductions
Standard basic deduction (60,000)
Specific deductions (60,000)
Specific additional deductions (24,000) (144,000)
Taxable comprehensive income 316,000
Applicable tax rate @ 25% 79,000
Less: Quick deduction (31,920)
Tax on comprehensive income 47,080