A: Article 4 of the Individual Income Tax Law of People's Republic of China (PRC) stipulates that the living allowance paid to individuals from welfare funds or trade union funds can be exempted from tax. The Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Determining the Scope of Living Allowance (Guo Shui Fa [1998] 155) is further clarified.

1. The above-mentioned living allowance refers to the temporary living allowance paid by the employer to the taxpayer or his family from the retained welfare funds or trade union funds in accordance with state regulations due to certain events or reasons.

Two, the following welfare income does not belong to the scope of tax exemption should be incorporated into the taxpayer's salary income to collect personal income tax:

(a) all kinds of subsidies paid to individuals from welfare funds beyond the proportion or base set by the state; (2) Subsidies paid to employees of the unit from welfare funds and trade union funds; (3) the unit to buy cars, houses, computers and other expenses. For individuals, it is not a subsidy for temporary life difficulties.

Is there a difference between union funds and welfare funds?

1, the difference between the confirmation conditions of employee welfare funds and trade union funds

The confirmation condition of enterprise employee welfare funds is the material benefits provided by enterprises for employees, which are generally used to help employees and their families solve some difficulties. Employee welfare expenses include enterprise work expenses, health care expenses for employees' only child and public medical care. The pre-tax deduction of trade union funds incurred by enterprises must be "actual allocation", and there is a special receipt or general payment book for the allocation of trade union funds collected by the local tax bureau as the basis for allocation. Trade union funds must be allocated on an accrual basis.

2. The deduction standards of employee welfare funds and trade union funds before enterprise income tax are different.

Article 40 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that employees' welfare expenses actually incurred by an enterprise shall be deducted before enterprise income tax if they do not exceed 14% of total wages and salaries. However, if the trade union funds extracted by an enterprise do not exceed 2% of the total wages, they shall be deducted before the enterprise income tax.

3. Employee welfare funds and trade union funds are different in actual financial treatment.

The employee welfare expenses incurred by an enterprise shall be included in the current profits and losses or related costs according to the actual amount. If employee welfare expenses are non-monetary benefits, they shall be measured at fair value. During the accounting period when employees serve the enterprise, the corresponding data must be determined according to the prescribed basis and proportion, recognized as liabilities, and included in the current profits and losses or costs.

Do you need to pay a tax on union funds and welfare funds? If the living allowance meets the requirements, it will not be taxed. There are three kinds of subsidies that exceed the requirements of the state. Bian Xiao believes that as long as we distinguish what is not tax-free income, the rest will be handled well. For the difference between union fees and welfare fees, friends who are not clear can also refer to the above.