China Personal Income Tax Calculator 2025

Understanding China's Personal Income Tax System

China's Personal Income Tax (PIT) system applies to both residents and non-residents, with progressive rates ranging from 3% to 45% depending on income level. The system distinguishes between comprehensive income (combining wages, salaries, and certain service income), business income, and other income categories, each with specific tax rates and deduction rules administered by the State Administration of Taxation.

Personal Income Tax Rates for Residents 2025

How to Calculate Personal Income Tax in China

For Resident Individuals - Annual Comprehensive Income

For Non-Resident Individuals - Monthly Calculation

Non-residents earn a CNY 5,000 monthly deduction instead of the annual CNY 60,000. Special additional deductions (child education, elderly care, etc.) are only available for non-residents if they meet specific requirements and during applicable periods.

Special Deductions and Additional Deductions

Standard Deductions

Residents: CNY 60,000 per year (CNY 5,000 monthly for withholding purposes). Non-Residents: CNY 5,000 per month. These are fixed deductions applied to all comprehensive income regardless of actual living expenses.

Special Deductions (Pre-Tax)

Special deductions reduce taxable income before tax calculation and include mandatory contributions:

• Social Insurance: Basic pension, unemployment, medical, work-related injury, and maternity insurance contributions
• Housing Fund: Statutory Housing Fund contributions (up to 12% of salary)
• Corporate Annuities: Employer and employee contributions to qualified corporate annuity plans
• Commercial Insurance: Premiums for tax-deferred commercial health insurance and commercial endowment insurance

Special Additional Deductions (Post-Tax Filing Only)

Tax Calculations by Income Type

Salary and Wage Income

The most common form of comprehensive income for residents, calculated using the cumulative withholding method with annual reconciliation between March 1 and June 30.

Business Income (Sole Proprietorship & Partnerships)

Business losses can be carried forward for five years to offset future business income. Personal deductions of CNY 60,000 annually can be claimed by sole proprietors and partners against total income, avoiding double deductions with employees.

Labor Service Remuneration

Income from independent services receives a 20% expense deduction before applying the 20% flat tax rate. When payments are between CNY 4,000 and CNY 20,000, an additional 10% discount applies; between CNY 20,000 and CNY 50,000, an additional 20% discount applies.

Author's Remuneration and Royalties

Subject to 20% expense deduction plus an additional 30% discount on the remaining taxable income. This means actual tax is effectively 0.2 × (income × 0.8) = 14% for most authors. Special calculation: up to 30% of net income is deductible.

Dividends, Interest, and Bonus Income

Subject to a flat 20% tax rate with no deductions except certain state bond interest is exempt. This rate applies regardless of taxpayer status or total income level.

Rental Income

Monthly rental income is subject to a flat 10% tax rate (for residents; non-residents face 20%) with either CNY 800 monthly deduction or 20% of gross rent, whichever is greater. Maintenance costs, property taxes, insurance, and management fees are deductible.

Property Transfer Gains (Capital Gains)

Taxed at a flat 20% rate on the gain (sale price minus original cost and reasonable expenses). Certain property transfers, such as primary residences held for specific periods, may receive preferential treatment or exemptions.

Resident vs. Non-Resident Taxation

Cumulative Withholding Method for Residents

Employers use the cumulative withholding method to calculate monthly tax for residents, ensuring that employees pay the correct progressive tax rate based on their cumulative income from January through the current month. This prevents over-taxation in early months when cumulative income is lower and under-taxation in later months.

Cumulative Withholding Formula

If the calculated amount is negative, no tax is withheld and no refund is issued until the annual settlement. This method ensures progressive taxation accuracy throughout the year, with final reconciliation after year-end.

Annual Tax Reconciliation and Settlement

Resident taxpayers must complete annual tax settlement between March 1 and June 30 of the following year. This process recalculates total tax payable for the year and compares it with total taxes withheld monthly, resulting in either a refund or additional payment.

Reconciliation Requirements

Reconciliation is required if: (1) deriving comprehensive income from two or more sources with balance exceeding CNY 60,000 after deductions; (2) deriving labor services, author's remuneration, or royalties with balance exceeding CNY 60,000; (3) total monthly tax paid is less than actual tax payable; (4) eligible for tax refund; or (5) any other circumstances requiring adjustment per State Council provisions.

Special Tax-Exempt Income and Benefits

Certain income types are completely exempted from personal income tax under Chinese law, including government awards, state bond interest, uniform government subsidies, welfare benefits, insurance claims, military separation payments, state-issued pension income, and income earned by diplomatic/consular personnel under treaty provisions.

Additionally, employers can provide certain tax-exempt fringe benefits to foreign employees including housing allowances, meal fees, laundry fees, education expenses, language training, relocation costs, business travel reimbursement, and home visit allowances. These benefits must be properly documented and approved by local tax authorities (policy extended through December 31, 2027).