Do I have to pay tax in China, and how?

If you are employed

Your employer deducts individual income tax (个人所得税) monthly and pays it to the tax bureau. It appears on your payslip. Nothing is required from you month to month, but the annual reconciliation is yours to complete.

The annual reconciliation

Between 1 March and 30 June you settle the previous calendar year in the 个人所得税 app, which is the official Individual Income Tax app published by the State Taxation Administration. It has an English interface.

The app pulls your income records automatically. You check them, claim the deductions you are entitled to, and either pay the difference or receive a refund. For most people with one employer and nothing unusual, it takes about twenty minutes.

Choosing your deductions

Foreign employees can generally claim allowances for housing, children’s education and language training, or take the standard itemised deductions. You cannot have both. Which leaves you better off depends on how your package is structured, so ask HR to model the two options before you choose. You make the choice once a year.

If you are a student

A scholarship or stipend is usually not taxable. Paid work on the side is taxable, and doing paid work at all requires permission recorded on your residence permit. Do not take casual work on the assumption that nobody checks.

When to get advice

The rules on worldwide income start to matter if you are paid partly outside China, if you hold company shares, or once you have been resident for several years. In those situations, speak to an accountant instead of relying on what people tell you online.