Dear Customers.
On 4th Dec 2020 , China State Administration of Taxation made the No.19, 2020 announcement regarding Individual Income Tax (IIT) withholding calculation optimization for particular individual residents in order to further support stable employment. Effective from 1st January 2021, there will be calculation changes for those two types of employees as below.
1. In last complete tax year, individual residents who have declared tax for wages and salaries under the same employer every month and whose annual income for wages and salaries does not exceed CNY 60,000.
Individual residents are eligible to enjoy full year standard deduction 60,000 when calculating tax for salaries and wages since January of current tax year if following conditions are met at the same time.
(1) Work in the same company and declared tax for salaries and wages every single month from January to December of last tax year
(2) Cumulative salary income from January to December of last tax year (including year-end bonus and other salary income without deduction of any expenses or tax exemption) shall not exceed CNY 60,000
(3) Continue to be employed and receive income for wages and salaries since this January.
If it is not the case, the standard deduction remains unchanged. It is 5000 * the number of months from hire month to current payroll month.
2. In last complete tax year, individual residents who have declared tax for continuous labor remuneration under the same employer every month and whose annual continuous labor remuneration does not exceed CNY 60,000.
Individual residents are eligible to enjoy full year standard deduction 60,000 when calculating tax for continuous labor remuneration since this January if following conditions are met at the same time.
(1) Obtain labor remuneration from the same employer and declared tax for continuous labor remuneration in cumulative withholding method every single month from January to December of last tax year
(2) Cumulative remuneration from January to December of last tax year (exclude deduction of any expense and tax-free income)) shall not exceed 60,000
(3) Continue to obtain labor remuneration and declare tax for continuous labor remuneration in cumulative withholding method since this January.
If it is not the case, the standard deduction remains unchanged. It is 5000 * the number of months from hire month to current payroll month.
You may find more details in below link:
Link 1
Link 2
For any further information, please feel free to contact us if you have any question.
