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Go to Other Chinese Cities CalculatorWondering what the numbers in the calculator table really mean? Keep reading to uncover the contents of social security, individual income tax, and how they impact your salary.
Firstly, social insurance is a key part of salary calculations, covering pension, medical, maternity, unemployment, work injury insurance, and the housing fund. Below is an overview of how these contributions impact both employees and employers.
Social security in China is a government-managed system designed to provide financial support and benefits during times of need, such as retirement, illness, or unemployment. It includes several key programs: pension insurance, medical insurance, unemployment insurance, work-related injury insurance, and maternity insurance. These programs are funded through mandatory contributions from both employers and employees.
Employers are required to contribute to the social security system on behalf of their employees, with rates varying based on the type of insurance and the region. Employees also pay a portion of their salary into the system. This framework is designed to safeguard workers’ well-being, offering a safety net and access to essential services like healthcare and financial assistance during job loss or retirement.
| Employee Contribution Rate | Employer Contribution Rate | |
| Pension Insurance | 8.00% | 16.00% |
| Medical+Maternity Insurance | 2.00% | 9.00% |
| Unemployment Insurance | 0.50% | 0.50% |
| Work Injury Insurance | 0.60% | |
| Housing Fund | 7.00% | 7.00% |
| Total | 17.50% | 33.10% |
After gaining a clear understanding of social insurance and its role in salary calculations, it’s time to delve into another essential component that directly impacts your take-home pay — individual income tax.
Individual Income refers to salary and wages income, which refers to the remuneration an individual receives for holding a position or being employed. This includes salaries, wages, bonuses, year-end raises, labor dividends, allowances, subsidies, and other income related to employment or service.
In China, the individual income tax (IIT) threshold is the minimum monthly income at which individuals become liable to pay income tax. Under current regulations, the standard personal income tax exemption threshold is 5,000 RMB per month. This means only the portion of income exceeding 5,000 RMB is taxed, following a progressive tax rate system.
China’s income tax rates range from 3% to 45%, depending on income levels. Taxes are calculated based on income above the threshold, after deducting allowable expenses such as social security contributions, housing fund payments, and other specified deductions.
| Level | Taxable Income[1] | Tax Rate[2] | Quick Deduction[3] |
| 1 | 0-3,000 | 3% | 0 |
| 2 | 3,001-12,000 | 10％ | 210 |
| 3 | 12,001-25,000 | 20％ | 1,410 |
| 4 | 25,001-35,000 | 25％ | 2,660 |
| 5 | 35,001-55,000 | 30％ | 4,410 |
| 6 | 55,001-80,000 | 35％ | 7,160 |
| 7 | 80,000+ | 45％ | 15,160 |
Notes:
- Taxable Income: Income after deducting 5,000 CNY.
- Tax Rate: The percentage of tax applied to your taxable income.
- Quick Deduction: A fixed amount used to simplify tax calculations for each income bracket.
Cumulative withholding tax is calculated by first subtracting allowable deductions—such as basic deductions, special deductions, additional deductions, and other legal expenses—from the total wages earned up to the current month within a tax year.
The remaining amount, known as cumulative taxable income, is then used to determine the total tax payable based on China’s progressive tax rate table. After subtracting taxes that have already been withheld in previous periods, the balance represents the tax due for the current month.
| Level | CWT Income[1] | WT Rate[2] | Quick Deduction[3] |
| 1 | 0-36,000 | 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 | 960,000+ | 45％ | 181,920 |
Notes:
- CWT Income: (Cumulative Withholding Taxable Income) The amount after subtracting tax-free income and other deductions.
- WT Rate: (Withholding Tax Rate) The percentage of tax applied to your taxable income.
- Quick Deduction: A fixed amount used to simplify tax calculations for each income bracket.
