China Payroll Compliance Map
Send an Email to: xmn4ww@evershinecpa.com
or
Contact us during working hours (China Time Zone GMT+8)
Manager Bing Weng, UK Graduate School Alumni and a well-English speaker
Mobile: +86-180-5008-2372
Tel No.: +86-592-573-4710
WeChat ID: yaoren01522
WWT – China Payroll Income Tax Deduction
WWT-CN-01 WWT Tax Entity
Question from client:
Is the China salary income tax levied in central or province? Or both central and province?
Are the central and province personal income tax levied separately? Or levied together?
What is the standard withholding tax rate?
Answer from Evershine RD:
The central government generally enacts laws relating to income tax under Individual Income Tax Law (IITL), but provinces and other local jurisdictions also have been granted broad power to levy and collect taxes as well.
The State Administration of Taxation (SAT) on a national level, and the local tax bureaus (LTB) on the provincial, autonomous region, and direct-controlled municipality basis both can assess and collect individual income taxes.
The LTBs are subject to the guidance of the SAT regarding tax policy and interpretation of tax laws and regulations.
Resident individual wage and salary income withholding rate table:
| Class | Cumulative withholding and prepayment taxable income (yuan) | Withholding rate (%) | Quick deduction |
| 1 | =<36,000 | 3 | 0 |
| 2 | 36,001-144,000 | 10 | 2,520 |
| 3 | 144,001-300,000 | 20 | 16,920 |
| 4 | 300,001-420,000 | 25 | 31,920 |
| 5 | 420,001-660,000 | 30 | 52,920 |
| 6 | 660,001-960,000 | 35 | 85,920 |
| 7 | 960,001 and above | 45 | 181,920 |
WWT-CN-02 Registration
Question from client:
The China salary income tax collection is under the jurisdiction of which government unit?
The registration of the China salary income tax collection status, that is, the application procedure for the employer withholding certificate number, paper certificate number application, or online account application? Website? Employer withholding certificate?
What is the advance certificate number of the number?
Do you need to use the industrial and commercial certificate e-card to apply?
Answer from Evershine RD:
Employers are required to register with the tax authorities within 30 days of receiving their business license.
The State Administration for Industry and Commerce (AIC), which is the governmental body responsible for registering enterprises, is required to periodically notify the tax authorities of new registrations.
To assure compliance, banks and financial institutions are only to open bank accounts for enterprises after seeing a copy of their tax registration.
Employers and withholding agents must register with the SAT, as well as any local tax bureau.
WWT-CN-03WWT Order (OD)
Question from client:
What is the order of China salary income tax withholding declaration (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pay?
At the same time as the declaration and payment?
Answer from Evershine RD:
Same Period (SP) – Declaration and payment are due by 15th of the following month.
WWT-CN-04 Mechanism of Filing (MOF)
Question from client:
China salary income tax withholding declaration (information flow determines the tax base)
What is the method of account return?
Filing cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?
Answer from Evershine RD:
Taxes withheld during a month, and tax returns that detail the tax withheld from wages during a month must be submitted to the government by the 15th day of the following month.
Special software issued by tax authorities is used to remit taxes electronically.
Report on Withholding of Individual Income Tax” is provided to the tax authority monthly for comparison with amounts deducted for wages and salaries in the company’s profits tax return.
Employers must issue a certificate for the tax withheld on the SAT’s printed form.
WWT-CN-05 Mechanism of Payment (MOP)
Question from client:
What is the funding method for the China salary income tax withholding payment (funding flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?
Answer from Evershine RD:
Apply for “A tripartite agreement on entrusting banks to transfer taxes (fees).”
Payment is due by 15th of the following month.
Pay online at https://etax.shanghai.chinatax.gov.cn
BNF – Deduction of Employee Social Welfare
BNF-CN-01 BNF Entity
Question from client:
China’s social insurance, medical insurance, pensions and other employee social welfare levy, is it Central? Is it provinces? Or is there a central plus provinces?
If there are central and provinces, are they levied separately? or levied together? What is the withholding tax rate?
Answer from Evershine RD:
Since 01 January 2019, the State Administration of Taxation and its local offices collect the funds and contributions, and local social insurance agencies no longer have a role in collecting the contributions.
The social security system and Housing fund are administered on a provincial level.
There are 5 types of Social Insurance Benefits and the housing fund commonly known as “five insurances and one gold”.
Social insurances are listed below:
- Pension insurance
- Health insurance
- Occupational Injury insurance
- Unemployment insurance
- Maternity insurance
Contribution rates for the funds vary based on location in China.
For example, in Shanghai,
| 5 Insurance 1 Gold | Employer | Employee |
| Pension Insurance | 16% | 8% |
| Health Insurance | 9.5% | 2% |
| Maternity Insurance | 1% | 0% |
| Unemployment Insurance | 0.5% | 0.5% |
| Occupational Injury Insurance | 0.16%-1.52% | 0% |
| Housing Fund | 5%-7% | 5%-7% |
BNF-CN-02 Registration
Question from client:
Social Security Certificate Number? What is the name of the government agency in charge of social insurance?
Medical insurance certificate number? What is the name of the government agency in charge of medical insurance?
Pension certificate number? The name of the government agency in charge of pensions?
How to apply for the social welfare certificate number for employees in the country?
Paper certificate number application? Or an online account application? Website?
Need to use the industrial and commercial certificate electronic card to apply?
Are the above three certificate numbers unified or separate?
Answer from Evershine RD:
An employer shall, within 30 days from the date of establishment of the entity, proceed with the business license, registration certificate or entity seal to the local government social insurance agency to apply for social insurance registration.
The social insurance agency shall complete the check and review process and issue a social insurance registration certificate to the employer within 15 days from receipt of the application.
Social Insurance
For example, in Shanghai Municipal Human Resources and Social Security Bureau is in charge for Shanghai Social insurance.
The application form name is “Unit Social Insurance Registration (Change) Form”- Application Form 0.
Online application.
Housing Fund
For example, in Shanghai Housing Provident Fund.
Log in to “Unit Provident Fund Online Business Management System”, click “Unit Housing Provident Fund Account Setup”.
Online application.
BNF-CN-03 BNF Order (OD)
Question from client:
What is the order of the withholding declaration of social welfare for China employees (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?
Answer from Evershine RD:
Same period: Report and pay at the same time.
BNF-CN-04 Mechanism of Filing (MOF)
Question from client:
What is the method of reporting for withholding of social benefits for China employees (information flow determines the tax base)? Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?
Answer from Evershine RD:
Employees’ insurance premiums are filed and withheld before the 25th day of the following month of the payday.
Social Insurance
For filing of social security, please refer to the link below:
For example, in Shanghai, companies can submit income tax returns in two ways:
- Electronic Taxation Bureau-Log in to <<Electronic Taxation Bureau>-Choose <Tax (Fee) Comprehensive Declaration Package>> on the left-hand package service. https://etax.shanghai.chinatax.gov.cn/wszx-web/bszm/apps/views/beforeLogin/indexBefore/pageIndex.html#/
- Online electronic declaration enterprise terminal-log in to eTax@SH3 online electronic declaration enterprise terminal.
For enterprises that meet the business prerequisites, a prompt box will automatically pop up for the enterprise to choose whether to enable the <<ZH001 tax (fee) comprehensive declaration form>>.
Housing Fund
Units can declare the annual housing provident fund payment base through the “One Internet Service” platform.
Log in to Shanghai “One Netcom Office” http://zwdt.sh.gov.cn , click to enter the “Comprehensive Tax Declaration” column, select “Housing Provident Fund (Supplementary Housing Provident Fund) Base Adjustment List”, and fill in the average monthly salary of employees in the previous year, Complete the declaration of the deposit basis.
BNF-CN-05 Mechanism of Payment (MOP)
Question from client:
What is the funding method for China employee social welfare withholding contributions (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?
Answer from Evershine RD:
Employees’ insurance premiums are filed and withheld before the 25th day of the following month of the payday.
The company must pay social insurance and housing fund separately to two different Government units.
Social insurance will be collected by taxation department.
Signing a three-party (Tax Bureau, Taxpayer, and the Bank) agreement with an authorized Chinese Bank.
Using RMB Tax account to settle all tax payments to the tax bureau.
Housing fund will be collected by Shanghai Housing Provident Fund Unit.
Log in to the Shanghai Housing Provident Fund Unit Online Business Management System> Click on Capital Business> Select Remittance> After confirming, you can enter the remittance payment page> Fill in the bank information> Remittance.
Please be aware of below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.
Contact Us
Send an Email to: xmn4ww@evershinecpa.com
or
Contact us during working hours (China Time Zone GMT+8)
Manager Bing Weng, UK Graduate School Alumni and a well-English speaker
Mobile: +86-180-5008-2372
Tel No.: +86-592-573-4710
Wechat ID: yaoren01522
Additional Information
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(version: 2024/07)
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