China uses a progressive IIT (Individual Income Tax) system with rates from 3% to 45% across 7 brackets, plus mandatory social insurance (10.5% employee contributions: pension 8%, medical 2%, unemployment 0.5%) and a housing fund contribution (typically 5-12%, depending on city and employer). The standard deduction is ¥5,000/month (¥60,000/year). A ¥300,000 earner (about $41,000 USD at roughly CNY 7.3 per USD) pays roughly ¥24,780 income tax (about 8.3%) plus ¥31,500 social insurance, before any housing fund (single resident employee in Shanghai, no special additional deductions). China offers generous additional deductions: children's education (¥24,000/child/year), elderly parent care (up to ¥36,000/year), housing loan interest (¥12,000/year), and continuing education. Annual bonuses can be taxed separately at favorable rates until 2027—critical for year-end planning. Monthly withholding uses cumulative method (累计预扣法); annual reconciliation deadline is June 30. Expat tax exemptions largely ended in 2024. Use our calculator to estimate your Chinese tax liability.
Note: These are marginal rates — you only pay the higher rate on income within each bracket.
Source: State Taxation Administration
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China has 7 progressive brackets on annual comprehensive income (after ¥60,000 standard deduction): 3% on ¥0-36,000, 10% on ¥36,000-144,000, 20% on ¥144,000-300,000, 25% on ¥300,000-420,000, 30% on ¥420,000-660,000, 35% on ¥660,000-960,000, and 45% above ¥960,000. Thresholds are cumulative taxable income after deductions.
Chinese employees pay 10.5% in social insurance (pension 8%, medical insurance 2%, unemployment 0.5%), plus a housing fund contribution (typically 5-12%, varies by city and employer). Employers add another ~30%. Contributions are capped at 3× local average salary. Foreign workers in China must also participate since 2011, though some treaty exemptions exist.
Beyond the ¥60,000 standard deduction, China offers: children's education (¥24,000/child/year), infant care (¥24,000/child under 3), elderly parent care (¥24,000-36,000/year), continuing education (¥4,800-19,200/year), housing loan interest (¥12,000/year), and rent (¥9,600-19,200/year depending on city). These are claimed via the IIT app.
Until end of 2027, annual bonuses can be taxed separately using a favorable formula: divide bonus by 12 to find the applicable rate, then apply that rate to the full bonus. This often results in lower tax than adding bonus to salary. For a ¥120,000 bonus, separate taxation saves roughly ¥5,000 compared to consolidation. Choose wisely in your annual reconciliation.
Most employees have tax withheld monthly by employers—no filing needed if that's your only income. Annual reconciliation (汇算清缴) is required March 1-June 30 if you: have multiple employers, claim certain deductions, or owe/are owed significant amounts. Late filing incurs daily 0.05% penalty. Non-residents file within 15 days of receiving income.
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Last Updated: October 2026