Announcement on Continuing the Individual Income Tax Policy for One-time Annual Bonuses
Announcement of the Ministry of Finance and the State Taxation Administration [2023] No. 30
August 18, 2023
To further reduce burdens on taxpayers, the annual one-time bonus individual income tax policy is announced as follows:
1. For a one-time annual bonus received by a resident individual that is not to be included in the year’s comprehensive income, as provided in the Circular of the State Administration of Taxation on Adjusting the Method of Calculating and Levying Individual Income Tax on One-time Annual Bonuses and Other Benefits Obtained by Individuals (Guo Shui Fa [2005] No. 9), tax shall be calculated separately using the tax rate and the quick calculation deduction applicable to the amount of the annual one-time bonus income divided by 12 months, as determined based on the tax rate table for comprehensive income converted into monthly income annexed to this Announcement. The calculation formula is:
Tax payable = One-time annual bonus income × Applicable tax rate – Quick calculation deduction
2. Resident individuals who receive a one-time annual bonus may also choose to include it into their comprehensive income for the year for tax calculation.
3. This Announcement shall remain in effect until December 31, 2027.
The Announcement is hereby given.
Attachment:
Tax Rate Table for Comprehensive Income Converted into Monthly Income (Only Title Translated)
