13 Mar

Income Tax in China

2183 times Last modified on Friday, 13 March 2020 20:28


Calculating taxes can be a big part of budgeting, especially if you're moving to a foreign country for the first time. Check out this easy-to-use tax chart and tax calculator!


Download the income tax info sheet here:


The People’s Republic of China uses a progressive tax system, with tax rates ranging from three to 45 percent. A progressive system means that tax brackets increase with respect to your taxable income.

The tax year ends on December 31st each year.


Tax brackets as of 2020:


Calculating your tax:

Download our easy-to-use tax calculator if you have Microsoft Excel, and figure out approximately what you'll be paying in income taxes!

https://www.teachingnomad.com/images/documents/2020 Tax Calculator.xlsx




Understanding income taxes:

Foreigners who legally work in China enjoy an initial tax deduction of 5,000 RMB per month. Only income over this amount is taxed. Furthermore, you should note that not all of your salary is within the same tax bracket.

For example, as of 2020, the first 1,500 RMB over your initial deduction of 5,000 RMB is taxed at 3% and then your next 3,000 RMB is taxed at the 10% bracket, and so on.

To make this calculation easier, use the quick deduction when finding out how much tax you owe each month. To calculate how much you owe in tax each month, use the following formulas:


Taxable Income = Gross Salary – 5,000 RMB

IIT = Taxable Income * Tax Rate – Quick Deduction

Net Salary = Gross Salary – IIT



If you earn 10,000 RMB a month:

10,000 RMB - 5,000 RMB = 5,000 RMB of taxable income (TI)

5,000 RMB TI * 0.1 tax rate - 210 RMB quick deduction = 290 RMB IIT

10,000 RMB gross salary - 290 IIT = 9,710 RMB net salary


This results in an effective tax rate of 2.90%.


Remember, some employers give additional tax benefits such as a housing allowance, which is a tax-free portion of your salary if spent on rent. This lowers your effective tax rate even more.





Teaching Nomad is your connection to teaching in Asia & The Middle East! We are a western owned and operated teacher placement agency with offices in Denver & Shanghai. We take a lot of pride in connecting teachers with great teaching opportunities.


Jobs on WeChat

wechat QR code

Reviewed on Go Overseas


Contact Us

  North Zhongshan Road No. 2000, Zhongqi Bldg., Suite 2501, Putuo District, Shanghai, PRC 200063

  3401 Quebec Street, Suite 9150, Denver, Colorado, 80207

 (+86) 21-8025-3905

 (+1) 720-531-6136

Authentications Hours:
8am - 5pm MST
Monday - Friday



Recover your password

Send us your email and we will send you instructions to reset your password

If you remember your password

*Required fileds