Foreign employee IIT Guideline
IIT calculation
The formula for computing the tax payable is as follows:
Monthly taxable income = Total monthly wages or salaies-5000 Yuan- exempted items
Monthly income tax payable = Monthly taxable income* Applicable rate – Quick deduction
Individual Income Tax Rates
| Grade |
Monthly Taxable Income |
Tax Rate (%) |
Quick Deduction |
| 1 |
RMB 36000 or less |
3 |
0 |
| 2 |
RMB 36000 < income< RMB 144000 |
10 |
2520 |
| 3 |
RMB 144000 < income< RMB 300000 |
20 |
16920 |
| 4 |
RMB 300000< income< RMB 420000 |
25 |
31920 |
| 5 |
RMB 420000< income< RMB 660000 |
30 |
52590 |
| 6 |
RMB 660000< income< RMB 960000 |
35 |
85920 |
| 7 |
over RMB 960000 |
45 |
181920 |
Tax declaration papers should be filed and submit to tax bureau monthly even it is 0 tax.
Tax-exempted items for expats:-
In China, foreign nationals are subject to Individual Income Tax (IIT) but may qualify for certain deductions and tax-exempt allowances. Below are the key deductible expenses and exemptions available, No.1 is the basic deduction while No.2 & No.3 cannot be claimed simultaneously, expats should choose one option.
1.Basic Deduction
Foreign nationals, like Chinese residents, are entitled to a monthly standard deduction of RMB 5,000 (as of 2023).
2.Special Additional Deductions
If eligible, foreign nationals can claim the same six categories of special additional deductions (supporting documents required):
Children’s Education: RMB 1,000 per child per month
Continuing Education: RMB 400/month for degree programs or RMB 3,600/year for vocational qualifications
Medical Expenses for Serious Illness: Deductible portion exceeding RMB 15,000 (capped at RMB 80,000)
Housing Loan Interest: RMB 1,000/month (max 240 months)
Housing Rent: RMB 800–1,500/month (varies by city)
Elderly Support: RMB 2,000/month for only children; shared deduction for non-only children
3.Tax-Exempt Allowances
Foreign nationals may receive certain tax-free allowances (with valid invoices or proof):
Housing Allowance
Language Training Fees
Children’s Education Fees
Meal Allowance (within reasonable limits)
Relocation Expenses
Home Leave Travel (up to two trips per year)