China Income Tax Rules & Special Additional Deductions
Basic Deduction and the Seven-Bracket Withholding Schedule
Basic deduction: since January 1, 2019 the monthly tax-free threshold has been CNY 5,000 (CNY 60,000 per year).
Tax rate schedule: this calculator uses the withholding schedule below, which applies to resident individuals' employment income.
(For cumulative withholding on resident individuals' wages and salaries)
| Bracket | Cumulative Taxable Income | Rate (%) | Quick Deduction |
|---|---|---|---|
| 1 | Up to CNY 36,000 | 3 | 0 |
| 2 | CNY 36,000 – 144,000 | 10 | 2,520 |
| 3 | CNY 144,000 – 300,000 | 20 | 16,920 |
| 4 | CNY 300,000 – 420,000 | 25 | 31,920 |
| 5 | CNY 420,000 – 660,000 | 30 | 52,920 |
| 6 | CNY 660,000 – 960,000 | 35 | 85,920 |
| 7 | Above CNY 960,000 | 45 | 181,920 |
The 7 Special Additional Deductions
Introduced in 2019 and raised in 2023, the following items can be deducted before tax:
- Child education: CNY 2,000/month per child (from age 3 through doctoral studies)
- Infant & toddler care (under 3): CNY 2,000/month per child
- Continuing education: CNY 400/month for degree programs, CNY 3,600/year for professional qualifications
- Serious medical expenses: the portion above CNY 15,000 out-of-pocket, capped at CNY 80,000/year
- Mortgage interest: CNY 1,000/month for a first home loan (up to 240 months)
- Housing rent: CNY 1,500 / 1,100 / 800 per month depending on city tier
- Elderly care: CNY 3,000/month for only children; shared among siblings otherwise
How Does Cumulative Withholding Work?
Employment income is withheld monthly, then reconciled between March and June the following year — any overpayment is refunded and any shortfall collected. The monthly formula:
Tax withheld this period = (cumulative taxable income × withholding rate − quick deduction) − tax already withheld
Because the brackets apply to your cumulative income, withholding is lower early in the year and rises later — as your cumulative taxable income crosses each threshold, the rate steps up and monthly withholding increases noticeably.
Filing and Dispute Resolution
Your employer withholds tax each month — no individual action is required. Between March and June the following year, use the Individual Income Tax app to file the annual reconciliation, confirm special additional deductions and any labor remuneration, and settle any difference.
If you find a withholding error, raise it with your employer's finance team first; unresolved cases can be escalated to the tax authority or through administrative review.
This calculator is for reference only. For the annual reconciliation, rely on actual figures in the State Taxation Administration's Individual Income Tax app.