We frequently receive questions from teachers about how the tax system in China works, and how much tax they’ll pay when teaching there. Like many other countries, China calculates income tax at a progressive rate and also has a tax-free allowance. For teachers, tax is deducted from your monthly salary before any payment reaches your account, so you don’t need to worry about filing a tax return. 

Typically, when a teacher receives a job offer from a school in China, the post-tax salary is shown on the offer. This way teachers can see how much money they’ll be receiving in their bank each month. However, some schools will only disclose the pre-tax salary, meaning it’s useful for teachers in China to understand how to calculate what tax they’ll be paying. We explain how to do this below.

Tax Rates

Teachers in China will usually be offered a monthly salary, rather than annual. In China, there is a tax-free allowance of 5,000 RMB per month. Once over the tax-free allowance, tax is calculated at a progressive percentage rate as shown in the table below. A ‘Quick Deduction’ reduces the amount of tax owed, with this figure also being shown below.

Monthly Income (RMB)Tax RateQuick Deduction (RMB)
0 – 5,00000
5,000 – 8,0003%0
8,000 – 17,00010%210
17,000 – 30,00020%1,410
30,000 – 40,00025%2,660
40,000 – 60,00030%4,410
60,000 – 85,00035%7,160
Over 85,00045%15,160

Calculating

To figure out how much tax you’ll be paying in China, and how much you’ll be earning after tax, use the following calculations:

  1. Monthly Income – 5,000 = Monthly Taxable Income
  2. (Monthly Taxable Income x Tax Rate) – Quick Deduction = Tax Amount
  3. Monthly Income – Tax Amount = Monthly Income After Tax

Examples

Monthly Income (RMB)Monthly Taxable Income (RMB)Tax Amount (RMB)Monthly Income After Tax (RMB)
16,00016,000 – 5,000 = 11,000(11,000 x 10%) – 210 = 89016,000 – 890 = 15,110
21,00021,000 – 5,000 = 16,000(16,000 x 20%) – 1,410 = 1,79021,000 – 1,790 = 19,210
26,00026,000 – 5,000 = 21,000(21,000 x 20%) – 1,410 = 2,79026,000 – 2,790 = 23,210
32,00032,000 – 5,000 = 27,000(27,000 x 25%) – 2,660 = 4,09032,000 – 4,090 = 27,910

As shown, by using the calculations set out above it’s relatively easy for teachers to figure out how much tax they’ll pay each month in China. Please check out our Blog for more useful information like this, and if you’re interested in teaching in China please Apply Now!