China's Individual Income Tax: A Quick Guide for Salaried Employees

China's Individual Income Tax (IIT) system is progressive, ranging from 3% to 45% across seven brackets, but most salaried employees never see the top rate because of standard deductions and thresholds applied before tax is calculated.

How the Brackets Work

A standard monthly deduction (currently RMB 5,000) is subtracted from gross salary before tax brackets apply, along with additional itemized deductions for things like housing loan interest, children's education, or elderly care that many employees qualify for. This means the effective rate on take-home pay is meaningfully lower than the bracket a person's raw salary might suggest.

Mandatory Social Insurance and Housing Fund

Separately from IIT, employees contribute to social insurance (pension, medical, unemployment) and the Housing Provident Fund, with rates that vary by city. These contributions are deducted from gross pay before IIT is calculated and can add up to a meaningful chunk of your paycheck, similar in spirit to CPF in Singapore or National Insurance in the UK.

What Our Calculator Estimates

Our China calculator applies a single simplified effective IIT rate for a typical urban salaried employee, excluding social insurance and housing fund contributions (which vary significantly by city). Use it as a directional estimate, and check with your employer's HR or a local tax advisor for an exact number.

Plug your own numbers into our China salary calculator, or see our guide on gross vs. net pay for more on how these deductions stack.