--- title: "China Individual Income Tax (IIT) Calculation: Salary, Bonus & More" description: How to calculate IIT in China — progressive tax brackets, special additional deductions for education and housing, expat tax-exempt allowances. image: https://asomerit.com/hubfs/Blog%20images/Corporate%20Income%20Tax.webp --- [![Asomerit Consulting](https://asomerit.com/hubfs/Asomerit%20Logo/Asomerit%20Consulting%20Logo.png)](https://asomerit.com/) China Services ### Setup - [WFOE Registration](https://asomerit.com/wfoe-registration) - [Registered Address](https://asomerit.com/wfoe-registration) - [Bank Account Opening](https://asomerit.com/china-bank-account-opening) ### Operate - [Bookkeeping & Tax](https://asomerit.com/bookkeeping) - [Annual Compliance](https://asomerit.com/bookkeeping) - [Hiring Support](https://asomerit.com/china-hiring-support) - [Payroll & Social Insurance](https://asomerit.com/china-hiring-support) - [Work Visa](https://asomerit.com/china-work-visa) - [Export Tax Rebate](https://asomerit.com/china-import-export-tax-rebate) ### Documents & Licences - [NCR Certificate](https://asomerit.com/china-no-criminal-record-certificate) - [Document Authentication](https://asomerit.com/china-document-authentication-apostille) - [Import & Export License](https://asomerit.com/import-export-license-application) - [Food Operation License](https://asomerit.com/food-operation-license-application) ### Change & Exit - [Company Change](https://asomerit.com/china-company-change) - [Company Deregistration](https://asomerit.com/china-company-deregistration) Hong Kong - [Hong Kong Incorporation](https://asomerit.com/hong-kong-incorporation) - [Hong Kong Bank Account Opening](https://asomerit.com/hong-kong-bank-account-opening) - [Hong Kong Accounting & PTR](https://asomerit.com/hong-kong-accounting-tax) - [Hong Kong Company Secretary](https://asomerit.com/hong-kong-company-secretary) [About](https://asomerit.com/about-us-asomerit-consulting) Resources - [Blog](https://asomerit.com/blog) - [Tools](https://asomerit.com/tools) - [Downloads](https://asomerit.com/downloads) [Contact](https://asomerit.com/contact) [Get a quote](https://asomerit.com/contact) China Services #### Setup [WFOE Registration](https://asomerit.com/wfoe-registration) [Registered Address](https://asomerit.com/wfoe-registration) [Bank Account Opening](https://asomerit.com/china-bank-account-opening) #### Operate [Bookkeeping & Tax](https://asomerit.com/bookkeeping) [Annual Compliance](https://asomerit.com/bookkeeping) [Hiring Support](https://asomerit.com/china-hiring-support) [Payroll & Social Insurance](https://asomerit.com/china-hiring-support) [Work Visa](https://asomerit.com/china-work-visa) [Export Tax Rebate](https://asomerit.com/china-import-export-tax-rebate) #### Documents & Licences [NCR Certificate](https://asomerit.com/china-no-criminal-record-certificate) [Document Authentication](https://asomerit.com/china-document-authentication-apostille) [Import & Export License](https://asomerit.com/import-export-license-application) [Food Operation License](https://asomerit.com/food-operation-license-application) #### Change & Exit [Company Change](https://asomerit.com/china-company-change) [Company Deregistration](https://asomerit.com/china-company-deregistration) Hong Kong [HK Incorporation](https://asomerit.com/hong-kong-incorporation) [HK Bank Account Opening](https://asomerit.com/hong-kong-bank-account-opening) [HK Accounting & PTR](https://asomerit.com/hong-kong-accounting-tax) [Hong Kong Company Secretary](https://asomerit.com/hong-kong-company-secretary) [About](https://asomerit.com/about-us-asomerit-consulting) Resources [Blog](https://asomerit.com/blog) [Tools](https://asomerit.com/tools) [Downloads](https://asomerit.com/downloads) [Contact](https://asomerit.com/contact) [Get a quote →](https://asomerit.com/contact) **Ex-government** corporate experts Trusted by **800+** international clients **Replies in a few hours,** every weekday [★★★★★ **Excellent** on Trustpilot](https://www.trustpilot.com/review/asomerit.com) # China Individual Income Tax (IIT) Calculation: Salary, Bonus & More ![Tommy Zhang](https://asomerit.com/hubfs/%E6%9C%AA%E6%A0%87%E9%A2%98-1-2.jpg) [Tommy Zhang April 27, 2026](https://asomerit.com/blog/author/tommy-zhang) - [Finance and Taxation](https://asomerit.com/blog/tag/finance-and-taxation) - 5 mins This guide explains how income tax in mainland China applies to salary and wages, year-end bonuses, labor remuneration, and incidental income. It also shows the main salary formula, bonus formula, deduction items, and the tax tables most commonly used in practical payroll and personal income planning. If you are trying to calculate **China income tax**, the first step is to identify the type of income. Salary is not calculated in the same way as a **year-end bonus**, and neither of them is treated in the same way as **labor remuneration** or **incidental income**. For employers, foreign-invested companies, and individuals working in China, understanding these differences makes it easier to estimate **take-home pay**, payroll withholding, and total tax exposure. If your company needs help with payroll setup, bookkeeping, or broader compliance in China, Asomerit provides support for bookkeeping and accounting, WFOE registration, and related corporate services. ## Contents - [Types of IIT covered in this article](https://asomerit.com/blog/china-mainland-individual-income-tax-calculation#types-of-iit) - [How salary is calculated in mainland China](https://asomerit.com/blog/china-mainland-individual-income-tax-calculation#salary-in-mainland-china) - [How a year-end bonus is taxed in mainland China](https://asomerit.com/blog/china-mainland-individual-income-tax-calculation#year-end-bonus-in-mainland-china) - [Other income: labor remuneration and incidental income](https://asomerit.com/blog/china-mainland-individual-income-tax-calculation#other-income) ## Types of IIT covered in this article This article focuses on four common mainland China IIT topics that are most relevant for salary planning and personal income calculation: salary and wages, year-end bonuses, remuneration for labor services, and incidental income. ### 1. Salary and wages Salary and wages usually refer to employment income received because a person holds a position or works for an employer. In practice, this may include regular salary, wages, bonuses, allowances, subsidies, and other employment-related income. ### 2. Year-end bonus A year-end bonus is usually part of employment income, but a qualifying annual one-off bonus may still use a separate tax calculation method under the current policy. ### 3. Remuneration for labor services This is different from salary. It usually refers to service income earned outside a normal employment payroll relationship, such as consulting, design, lecturing, translation, legal, accounting, or similar work. ### 4. Incidental income Incidental income is generally taxed separately and is commonly introduced as a flat 20% IIT item in simple practical guides.   How salary is calculated in mainland China For payroll purposes, salary calculation usually starts with **gross salary**, then deducts employee-side statutory items and eligible deduction items before arriving at the tax base and the final **net salary**. For a simple salary guide, this is the clearest way to explain how **salary tax in China** works. Foreign employees usually need a [China work visa and residence permit](https://asomerit.com/china-work-visa) before IIT registration can be completed under their name.   ### Gross salary vs net salary **Gross salary** means pre-tax salary before IIT and before employee-side statutory deductions. **Net salary** means the amount the employee actually receives after employee-side social insurance, housing fund, and IIT are withheld.   ### Salary calculation table | Item | How it works | | --- | --- | | Gross salary | Monthly pre-tax salary | | Less: employee social insurance and housing fund | Employee-side statutory deductions | | Less: special additional deductions | If claimed | | Less: eligible foreign tax-exempt fringe benefits | If applicable | | Less: monthly basic deduction | RMB 5,000 | | = Estimated monthly taxable salary | Base used for tax calculation | | Less: IIT | Calculated using the applicable rule | | = Net salary | Amount received by the employee | For resident individuals, actual payroll withholding often follows the cumulative withholding method, so the actual monthly IIT withheld may differ from a simple one-month estimate.   IIT is withheld by the employer monthly — see our [China payroll service](https://asomerit.com/china-hiring-support) for full IIT calculation, withholding and year-end reconciliation support.   ### Salary deduction items The main deduction items usually discussed in **China salary tax** planning are: - Employee-side social insurance and housing fund - Special additional deductions - Eligible foreign tax-exempt fringe benefits for qualifying foreign individuals Special additional deductions commonly include childcare under age three, children’s education, continuing education, major illness medical expenses, housing loan interest or housing rent, and elderly care. For qualifying foreign individuals, certain fringe benefits such as housing, children’s education, language training, meal, laundry, relocation, business travel, and home leave may still be relevant in practice. Eligibility depends on the individual's annual IIT treatment choice and whether the applicable policy conditions are met. These items should be checked carefully before being used in a payroll calculation.   How a year-end bonus is taxed in mainland China A qualifying annual one-off bonus may still be taxed separately under the current policy. In practical **year-end bonus tax planning**, this is usually compared with the method of combining the bonus with annual comprehensive income. ### Year-end bonus tax table | Monthly-converted amount (RMB) | Rate | Quick deduction | | --- | --- | --- | | Up to 3,000 | 3% | 0 | | 3,000 to 12,000 | 10% | 210 | | 12,000 to 25,000 | 20% | 1,410 | | 25,000 to 35,000 | 25% | 2,660 | | 35,000 to 55,000 | 30% | 4,410 | | 55,000 to 80,000 | 35% | 7,160 | | Over 80,000 | 45% | 15,160 | ### Year-end bonus formula Under the separate calculation method, the bonus tax is usually shown like this: ``` Bonus tax = Annual one-off bonus × applicable rate - quick deduction ``` The applicable rate is determined by dividing the annual bonus by 12 and locating the correct bracket in the monthly-converted bonus table. For a more practical result, many companies compare the separate method with the combined method before finalizing payroll and tax treatment.   Other income: labor remuneration and incidental income ### Labor remuneration Labor remuneration is different from salary. It usually applies to independent service income rather than income paid under a normal employment payroll relationship. **Simple withholding base formula** ``` If each payment is RMB 4,000 or less: Taxable base = each payment - RMB 800 If each payment is above RMB 4,000: Taxable base = each payment × 80% ``` > Withholding tax on labor remuneration is generally applied at 20%. For annual comprehensive income purposes, labor remuneration is subject to the same progressive rates as salary at annual reconciliation.   ### Incidental income Incidental income is usually introduced as a separate IIT category with a flat 20% rate. **Simple incidental income formula** ``` Incidental income tax = incidental income × 20% ``` ### Related Asomerit services - [Bookkeeping for foreign-invested companies in China](https://asomerit.com/bookkeeping) - [WFOE registration in China](https://asomerit.com/wfoe-registration) - [More China compliance and tax articles](https://asomerit.com/blog) ## Need help with China payroll, salary tax, or bookkeeping? If you need support with **payroll tax in China**, employee salary calculations, bookkeeping, or foreign-invested company compliance, Asomerit can help with practical setup and ongoing support. 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