If you’re taking part in one of our paid teaching placements, you might be wondering if and how you will pay tax on your earnings. In most cases the answer is yes, so you’ll be pleased to know it’s quite straightforward. Like in most countries, income tax in China is calculated at a progressive rate and is taken from your salary before it reaches your account.
Many schools advertise the salary after tax, but this isn’t always the case. We advise checking this with your potential employer before signing a contract to avoid any nasty surprises.
How much tax will I pay?
Salaries in China are quoted as a monthly amount, and tax is calculated as a percentage of your monthly income. Foreigners working in China have a tax free personal allowance of 4,800 RMB, with any earnings over this amount being taxed at the following rates:
TI = Taxable Income (amount over 4,800 RMB)
Quick Deduction = quick calculation to determine tax rate for your earnings
Calculating your tax rate
Foreign teachers in China tend to earn between 5000 and 16,000 RMB per month. If your school has quoted your gross salary (before tax), you can use the calculation below to find out how much you will take home each month:
Monthly income – 4,800 RMB = Monthly Taxable Income
Monthly Taxable Income x Tax Rate – Quick Deduction = Tax Payable
Here are some examples:
|Gross Salary: 7000 RMB||Gross Salary: 10,000 RMB||Gross Salary: 16,000 RMB|
|7,000 – 4,800 = 2200||10,000 – 4,800 = 5,200||16,000 – 4,800 = 11,200|
|2,200 x 0.10 – 105 = 115||5,200 x 0.20 – 555 = 485||11,200 x 0.25 – 1005 = 1,795|
|7,000 – 115 = 6885||10,000 – 485 = 9,515||16,000 – 1,795 = 14,205|
|Net Salary: 6,885 RMB||Net Salary: 9,515 RMB||Net Salary: 14,205|
If you want to double check how much you will receive per month, ask your school contact who will be able to help!