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How to pay tax on year-end bonus and subsidy

2021-02-22

After the reform of individual income tax, great changes have taken place in the annual one-time bonus and one-time compensation income.In the new tax law, the annual lump sum bonus is not only different from the previous tax method, but also increases the timeliness conditions and the choice of declaration methods. Today, Huacai has collected and sorted out a hot question and answer on personal income tax for you. Let's learn together!

01 What is the scope of annual lump sum bonus?
A: according to the notice of the State Administration of Taxation on adjusting the method of calculating and Levying Individual Income Tax such as annual one-off bonus, etc two thousand and five nine Article 1 provides that: Annual one-time bonus refers to the one-time bonus paid to employees by withholding agents such as administrative organs, enterprises and institutions according to their annual economic benefits and comprehensive assessment of employees' annual work performance.
The above-mentioned one-time bonus also includes year-end salary increase, annual salary and performance salary paid by the unit implementing the annual salary system and performance salary according to the assessment situation.
       
Article 5 provides that: In addition to the annual one-off bonus, other kinds of bonus, such as half year award, quarterly award, overtime award, advanced award, attendance award, etc., shall be combined with the salary and salary income of the current month, and shall pay individual income tax according to the tax law.
02
How to calculate and pay individual income tax for the one-time compensation income obtained by employees who have terminated their labor relations in advance? A: according to the notice of the Ministry of Finance and the State Administration of Taxation on the convergence of preferential policies after the amendment of the individual income tax law (Finance and taxation [ two thousand and eighteen one hundred and sixty-four Article 5 provides that: When an individual terminates the labor relationship with the employer, he obtains one-time compensation income (including the economic compensation, living allowance and other subsidies paid by the employer), and the average wage of the local employees in the previous year three The part within multiple amount shall be exempted from individual income tax;exceed three The part of multiple amount shall not be included in the current year's comprehensive income, and the comprehensive income tax rate table shall be separately applied to calculate tax payment.
03
Should individual income tax be calculated and paid when employees receive holiday subsidies from their original units after they go through retirement procedures?
A: it is necessary to calculate and pay individual income tax.According to the official reply of the State Administration of Taxation on Levying Individual Income Tax on bonus subsidies other than retirement wages paid by the retirees from their units (state tax letter)( two thousand and eight seven hundred and twenty-three It is stipulated that: In addition to receiving retirement wages or pensions in accordance with the regulations, the various subsidies, bonuses and material objects obtained by retired personnel from their original work units are not tax-free retirement wages, retirement wages and retirement living subsidies stipulated in Article 4 of the individual income tax law of the people's Republic of China.According to the relevant provisions of the individual income tax law of the people's Republic of China and its implementation regulations, all kinds of subsidies, bonuses and material objects obtained by retirees from their former work units shall be subject to Income from wages and salaries Individual income tax shall be paid for taxable items.
04
Can annual one-time bonus not be included in comprehensive income and be taxed separately? A: Yes.According to the notice of the Ministry of Finance and the State Administration of Taxation on the convergence of preferential policies after the amendment of the individual income tax law two thousand and eighteen one hundred and sixty-four Article 1 provides that: The annual one-time bonus obtained by individual residents is in line with the notice of the State Administration of Taxation on adjusting the method of calculating and collecting individual income tax such as annual one-time bonus obtained by individuals (State Tax Bureau [ two thousand and five nine (No two thousand and twenty-one year twelve month thirty-one Recently, it is not included in the current year's comprehensive income, but divided by the annual one-time bonus income twelve For the amount obtained in each month, the applicable tax rate and the quick calculation deduction amount shall be determined according to the comprehensive income tax rate table (hereinafter referred to as the monthly tax rate table) after monthly conversion attached to this circular, and the tax shall be calculated separately.The calculation formula is as follows:
Tax payable = annual lump sum bonus income × Applicable tax rate - quick deduction
If a resident obtains a one-off annual bonus, he may also choose to incorporate it into the current year's comprehensive income for tax calculation.
since two thousand and twenty-two year one month one The annual one-time bonus obtained by individual residents shall be included in the current year's comprehensive income for calculation and payment of individual income tax.
05
I'm corporate finance, twelve When the annual one-time bonus is paid in a month, it will be paid in two payments. When withholding and reporting in the next month, will the twelve Two annual one-time bonus paid in a month are combined to declare individual income tax?
A: Yes.The annual one-time bonus shall be paid in two installments in the same month, and the total amount of the two bonuses shall be deducted and declared in the next month as the annual one-time bonus.It must be noted that the annual one-time bonus only distributed in one month can be consolidated.In addition, in a tax year, for each taxpayer, the preferential individual income tax method for one-off bonus is only allowed to be used once.


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