China
China individual income tax in 2026
6 min read · Last updated 1 November 2026 · Tax Globy editorial team
China taxes salary and other comprehensive income on an annual basis, using seven rates from 3% to 45%. The basic deduction is CNY 60,000 a year, and employee social insurance and housing fund contributions are deducted before tax. This guide explains the rates, the contributions and a worked example on CNY 300,000.
Tax on annual comprehensive income
Individual income tax in China is charged on comprehensive income, which includes salary and wages, on an annual basis. The rates rise from 3% to 45% across seven bands, and each band applies only to the slice of taxable income inside it.
Taxable income is not the same as the salary in your contract. The basic deduction and the employee contributions for social insurance and housing fund are subtracted first, and only the remainder is taxed. The order matters: contributions come off first, then the basic deduction, and the rates apply to what is left.
The seven rates
The table shows the annual taxable income bands and the rate applied to each slice. The figures are in CNY.
Most salaries sit in the first three bands, so the top rates apply to a small part of the income even for relatively high earners.
| Annual taxable income (CNY) | Rate |
|---|---|
| Up to 36,000 | 3% |
| 36,001 to 144,000 | 10% |
| 144,001 to 300,000 | 20% |
| 300,001 to 420,000 | 25% |
| 420,001 to 660,000 | 30% |
| 660,001 to 960,000 | 35% |
| Above 960,000 | 45% |
Run your own numbers
The calculator applies the rates described in this guide and shows the band-by-band breakdown.
Open the China calculatorThe basic deduction
The basic deduction is CNY 60,000 a year, or CNY 5,000 a month. It applies to comprehensive income and needs no receipts or supporting documents.
The deduction is flat, so it does not phase out as income rises. It reduces taxable income at every level, which makes it different from an allowance that is withdrawn above a threshold.
Divided across the year, the basic deduction is worth CNY 5,000 a month, which is why payroll tables often start from a monthly figure.
Worked example: CNY 300,000
Take a salary of CNY 300,000 with the default contribution rates and no special additional deductions. The table shows how the taxable income and the tax are built.
The tax is 17,580, or about 5.9% of the gross salary. Take-home pay is 214,920 after the contributions and the tax. The 10.5% social insurance figure is the sum of the pension, medical and unemployment rates.
| Item | Amount (CNY) |
|---|---|
| Annual salary | 300,000 |
| Social insurance at 10.5% | 31,500 |
| Housing fund at 12% | 36,000 |
| Basic deduction | 60,000 |
| Taxable income | 172,500 |
| Individual income tax | 17,580 |
| Take-home pay | 214,920 |
How the tax is built slice by slice
On taxable income of 172,500, the first 36,000 is taxed at 3%, which is 1,080. The next 108,000 is taxed at 10%, which is 10,800. The remaining 28,500 is taxed at 20%, which is 5,700.
The three amounts add up to 17,580, matching the table. The top rate reached is 20%, but the effective rate on the whole salary is much lower because the basic deduction and contributions come off first. Measured against taxable income alone, the tax is about 10.2%, but that is not the rate most people mean.
What is not included
The example leaves out special additional deductions for children education, housing loan interest, rent and elderly care. These can reduce taxable income further, and many employees claim at least one.
It also leaves out annual bonuses taxed separately and city-specific contribution bases and caps. Both can change the final figure, so use the result as an estimate and check your own payslip.
- Special additional deductions for children education, housing loan interest, rent and elderly care
- Annual bonuses taxed separately
- City-specific social insurance bases and caps
Figures are estimates; contribution rates and bases vary by city.
Common questions
What is the top individual income tax rate in China?
The top rate is 45%, and it applies only to annual taxable income above CNY 960,000. Lower slices keep their own rates.
Is the basic deduction the same as a personal allowance?
It works in a similar way. CNY 60,000 a year, or CNY 5,000 a month, is subtracted from comprehensive income before the rates are applied.
Why are social insurance and housing fund deducted first?
They are employee contributions taken from salary before individual income tax is calculated, so they reduce both the tax and the cash you receive.
Can special additional deductions reduce the tax further?
Yes. Deductions for children education, housing loan interest, rent and elderly care can lower taxable income, but they are not included in this example.
Written and maintained by the Tax Globy editorial team
Tax Globy is an independent calculator project. Every rate, threshold and deduction is checked against the published official source listed on the page, and each page shows when it was last reviewed.
Last reviewed 1 November 2026 · Estimates only, not tax advice.
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Social insurance and the housing fund
Employees commonly contribute 8% of salary to the pension fund, 2% to medical insurance and 0.5% to unemployment insurance. The housing fund contribution is usually between 5% and 12% of salary, with 12% used as the default here.
These contributions are deducted before individual income tax is calculated, which lowers the tax as well as the cash you receive. Rates and contribution bases vary by city, so the figures here are a common default rather than a rule for every employer.