Calculation method of personal income tax:

Taxable income = (monthly income - five social insurances and one fund - threshold - other deductions determined in accordance with the law - special additional deductions) × applicable Tax rate - quick calculation of deductions

The new personal income tax law will be implemented on January 1, 2019, and the latest threshold and tax rate will be implemented on October 1, 2018.

The new personal income tax law stipulates that from October 1, 2018 to December 31, 2018, taxpayers’ wages and salaries shall be deducted from monthly income by 5,000 yuan in expenses and special deductions and other deductions determined in accordance with the law shall be the taxable income, and the tax shall be calculated and paid on a monthly basis according to the personal income tax rate table (applicable to comprehensive income), and no additional deductions will be deducted.

Extended information:

The new personal income tax law further adjusts and optimizes some tax brackets of personal income tax. After the reform, wage and salary income is comprehensive income, and the applicable tax rate remains unchanged at the seven-level progressive tax rate ranging from 3 to 45. However, the gap between each tax rate has been adjusted and optimized, and the three low tax levels of 3, 10, and 20 have been expanded. gap, narrowing the 25 tax rate gap.

According to the new personal income tax law, special deductions include: basic pension insurance premiums, basic medical insurance premiums, unemployment insurance and other social insurance premiums and housing provident funds paid by individual residents in accordance with the scope and standards stipulated by the state.

Special additional deductions include: children’s education, continuing education, serious illness medical treatment, housing loan interest or housing rent, elderly care and other expenses.

Reference materials:

Baidu Encyclopedia-Personal Income Tax