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 an annual one. 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 Rate | Quick Deduction (RMB) |
| 0 – 5,000 | 0 | 0 |
| 5,000 – 8,000 | 3% | 0 |
| 8,000 – 17,000 | 10% | 210 |
| 17,000 – 30,000 | 20% | 1,410 |
| 30,000 – 40,000 | 25% | 2,660 |
| 40,000 – 60,000 | 30% | 4,410 |
| 60,000 – 85,000 | 35% | 7,160 |
| Over 85,000 | 45% | 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:
Monthly Income – 5,000 = Monthly Taxable Income
(Monthly Taxable Income x Tax Rate) – Quick Deduction = Tax Amount
Monthly Income – Tax Amount = Monthly Income After Tax
Examples
| Monthly Income (RMB) | Monthly Taxable Income (RMB) | Tax Amount (RMB) | Monthly Income After Tax (RMB) |
| 16,000 | 16,000 – 5,000 = 11,000 | (11,000 x 10%) – 210 = 890 | 16,000 – 890 = 15,110 |
| 21,000 | 21,000 – 5,000 = 16,000 | (16,000 x 20%) – 1,410 = 1,790 | 21,000 – 1,790 = 19,210 |
| 26,000 | 26,000 – 5,000 = 21,000 | (21,000 x 20%) – 1,410 = 2,790 | 26,000 – 2,790 = 23,210 |
| 32,000 | 32,000 – 5,000 = 27,000 | (27,000 x 25%) – 2,660 = 4,090 | 32,000 – 4,090 = 27,910 |
