Income Tax for Foreigners in China

Personal income tax calculation for foreigners in China changed in 2011. Expats and halfpats in China can refer to the following table and work out the amount of taxes you’ll be deducted monthly.

Tax Rate Chart (translated from this article from Shanghai Tax Bureau)

Income Tax for Foreigners in China

Income Tax for Foreigners in China

Taxable Income = ( Total Income – Initial Deduction* – Tax Deductible Allowance** )
Tax Payable = ( Taxable Income x Tax Rate ) – Deduction

* Initial deduction is RMB 3,500 for PRC residents and 4,800 for foreigners. (taken from this other article from Shanghai Tax Bureau)
** Tax Deductible Allowance includes rental, food and travel expenses, etc. as determined by your company’s Finance/HR department. You will need to get fapiao (发票) (official invoices) for these figures to qualify as your Tax Deductible Allowance.

Tax Examples
Example 1: Gross Salary of 10K RMB/month
Gross Salary = 10,000
Taxable Income = 10,000 – 4,800 = 5,200
Tax Rate = 20%
Deduction = 555
Tax = 5,200 * .2 –555 = 485 RMB

Example 2: Gross Salary of 10K RMB/month, Tax Deductible Allowance of 2,000 RMB/month

Gross Salary = 10,000
Tax Deductible Allowance = 2,000
Taxable Income = 10,000 – 4,800 – 2,000 = 3,200
Tax Rate = 10%
Deduction = 105
Tax = 3,200 * .1 –105 = 215 RMB

Example 3: Gross Salary of 30K RMB/month
Gross Salary = 30,000
Taxable Income = 30,000 – 4,800 = 25,200
Tax Rate = 25%
Deduction = 1,005
Tax = 25,200 * .25 –1,005 = 5,295 RMB

Example 4: Gross Salary of 30K RMB/month, Tax Deductible Allowance of 15K
Salary = 30,000
Tax Reimbursable Expenses = 15,000
Taxable Income = 30,000 – 4,800 –15,000 = 10,200
Tax Rate = 25%
Deduction = 1,005
Tax = 10,200 * .25 – 1,005 = 1,545 RMB

Naturally, the more your tax deductible allowance, the lower your taxable income and the lesser taxes you pay. So be sure you work out your sums thoroughly before negotiating your next raise or paycheck!

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  1. M Stanga - 11 August 2012

    What are some tax deduct. items in China?  I have worked in China for more than 5 years

  2. Shanghai Halfpat - 11 August 2012

    Rent, Meal allowance, etc. Anything you can get fapiao from. But it’s best to check with your company’s accounting department.

  3. Dr Long - 26 February 2013

    Are the calculations above based on an individual’s salary or couple’s? My wife and I both teach and have a monthly salary of 7000 yuan (school provides apartment). I can calculate our tax three ways

    1. As individuals, each of our tax would be (7000-4800)*.10 – 105 = 115, or 230 yuan for both/month

    Calculation by couple – two assumptions used
    2. We earn 14000 yuan/month so our tax bracket would be 25% but there is a deductible amount. According to the article, our tax would be (14000-4800)*.25-1005 = 1295 yuan total/month if we have a single deduction of 4800 for both of us.

    3.However, it is unclear if the deductible amount would be 4800 for the couple or it’s that amount per individual. If the latter, we would be in the 20% bracket and our tax would be (14000-9600)*.20-555 = 325 yuan total/month.

    As you can see, the differences are quite large. And, in fact, the amount they take out (total) is more than any of these but I suspect that includes local taxes as well as social security and perhaps other line items.

    Can you clarify the calculations for couples versus individuals?

  4. Dr Long - 26 February 2013

    I have also been told that the amount of tax taken out is greater if they pay you in cash (as our current employer does) versus direct deposit (and the difference can be substantial). Is this something you have heard as well? (Doesn’t make sense to me, but then, a lot of things over here don’t make sense to me.)

  5. Santi - 8 April 2013

    Individual income taxation applies……..

  6. Jack - 18 April 2013

    Hi I just found this forum and wanted aks a few questions for getting wheels in China and how it affects the income tax.

    1. If I buy a car here in China can I deduct the purchase price from my taxable income? If so how is it set of against my taxable income? (Once a year, monthly, ….)

    2. I read that you can deduct car renting costs from the taxable income. Is that true? (So if I cannot buy a car, then I could rent one and still reduce my taxable income)

    3. What about running expenses for a car (gas, insurance, repairing,….)?

    I take for granted that my accounting department will accept this if it is deductible by law.

    Many thanks in advance!


  7. How to teach English in China: Income Tax | How to Teach English in China - 9 May 2013

    […] Update:  For more up to date information, as of May 2013, please see this post by Shanghai Halfpat: […]

  8. sk - 25 May 2013

    yes, individual income tax apply…

  9. JH - 10 September 2013

    Hi. My company’s accounting department says that they do not have an allowance. When you say “allowance,” do you mean allowance from the government to lower taxable income, or a monthly allowance the company offers to pay for such expenses. I have tried submitting fapiaos to them to lower my tax rate, they were, however rejected.

  10. Shanghai Halfpat - 11 September 2013

    I was referring to monthly allowance the company offers, and of course this is subjected to an agreement between you and the company. Rent, for instance, can be deemed as allowance as long as you provide fapiao.

  11. shujaath - 16 March 2015

    I am an expat working for a Chinese trading company in Dongguan since July 2014. My income tax was not deducted since then. My salary is RMB 6000 per month. Can the company deduct now and pay the tax together? Please advise. When should the tax be paid every month.

  12. tan - 24 June 2015

    Tax Reimbursable Expenses list please.

  13. Jones - 22 July 2015

    The chart is for individual monthly income tax, as should be deducted by an employer. Why would anyone assume couples would be taxed together, even if they were with the same employer? This is not an annual tax filing to the Tax Bureau.

    Also, seems a lot of people are confused about the Tax Deductible Allowance. There is no set list of what can be deducted, the amount and what you can deduct is determined by your employer. Company A may allow its employees to submit fapiao for rent and education to deduct the tax burden of up to a third of their gross monthly salary. Company B may also allow meals and laundry to be included in the tax deductible amount, but only up to 25 percent of gross monthly salary. Company C may not allow any tax deductions at all. Talk to your HR dept if you have questions regarding your company’s policy.

  14. dr. Kiss - 5 September 2015

    Dr Long, hope you are not teahcing math :-)

  15. John - 22 October 2015

    The tax deductible is a complicated issue, as apparently not every company understand it the same way…

    Typical of a poorly written law, as it is often the case in China. My company do not accept it for example because basically people in accounting are lazy and do not want to bother feeling extra forms.

    As for talking to your HR good luck, most of them do not have a clue…

  16. Android - 23 January 2016

    My taxable deductible is 7000 RMB on a salary of 26000. I don’t need to submit evidence of deductible spending. This portion of my income is simply untaxed.

  17. Sascha - 25 February 2016

    quick question. I’ll leave China in March and already paid my IIT in January (and will pay in February and March).
    I am German, there’s a bi-lateral tax agreement. How can I apply for a refund of my IIT for the first quarter after I left? And when can I apply? Would I need to wait until the end of the year and file a declaration? Or would it be possible to refund the money right away?

    I know it’s always a struggle to get any money back, especially in China.

    I’d really appreciate your help/experience.

  18. rod - 29 February 2016

    who do i contact if i need to get a record of my taxes that i paid in shanghai. i am back in the US and need to prove that i was paying taxes in Shanghai. Which bureau do i contact?

  19. Herman - 22 March 2016

    Is there anyone who can help me to get some information about allowable tax deductions? If my company would allow me to do this, what would that have for consequences for my company, will they have to pay more company tax or something like that, and, if they would allow me, how much is allowed, is there a limit? Any input would be helpful, since my company is only a small one, and they have zero experience with this.

  20. Mika12 - 16 November 2016


    regarding the meal expenses deduction, what is the maximum amount I can deduct from the salary? For example, I know that the rent cost cannot exceed 30% of your monthly salary, is the same rule applied to the meal expenses or the 30% already include also the meal expenses?

    Thanks in advance!

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  27. zendy - 2 January 2018

    Do you know where foreigner can check the details of the tax on which the company has paid ?


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