At Work in Shanghai

Tax system in Shanghai

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If you live and work in China for more than 183 days, you will be liable to pay Chinese taxes on all income received whilst in the country. Personal Income Tax is charged on a sliding scale, ranging from 5 to 45%. If you also receive income from overseas, you will be taxed in China on your worldwide income, with a tax credit given against any tax already paid in other countries.

Taxable pay is calculated by reducing monthly income by the permitted tax free earnings of 4800 RMB per month for foreigners (1600 RMB for Chinese).

Income tax is charged as follows:

Percentage Taxable Earnings (RMB)
5% 1 - 500
10% 501 - 2,000
15% 2,001 - 5,000
20% 5,001 - 20,000
25% 20,001 - 40,000
30% 40,001 - 60,000
35% 60,001 - 80,000
40% 80,001 - 100,000
45% 100,001 and above

Tax is deducted from your pay each month by your employer and paid over to the authorities.

Update 11/09/2006


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