Taxable Income and Concessions

Find out what income is taxable in China and the concessions available to residents...

Taxable income in China is classed as all income received by an employee, either directly or indirectly, and is levied at a progressive rate with nine levels, from three percent to 45 percent, depending on the amount of income earned. Taxable income includes:

  • Basic salary and bonuses
  • Profit shares
  • Employer contributions to social security in other countries
  • Special allowances, for example for the cost of living
  • Income from subcontracting or subleasing

Foreigners living in China are eligible for some income tax concessions on the following:

  • Relocation
  • Rented accommodation
  • Chinese language lessons (employee only)
  • Maximum of two annual trips home (employee only)
  • Education expenses for an employee's children
  • Meals and laundry

To receive tax breaks on these items official invoices or receipts must be provided.

Monthly personal exemption on employment income is currently RMB3,500 and it is higher for foreign nationals working in China (RMB4,800). Charitable contributions and social security payments can be deducted from employment income. As all taxpayers are considered on an individual basis, there are no deductions, or tax relief for spouses or other dependents.

The following income is not subject to income tax:

  • Insurance indemnities
  • Income earned by diplomats and consular officers

Further information