Shenyu Consulting - Personal Tax Planning

Mainland Tax Resident Rules 2026

Tax Resident Definition

An individual who has a domicile in China, or who has no domicile but has resided in China for a cumulative period of 183 days or more in a tax year is a resident individual.
Resident individuals shall pay individual income tax in accordance with this Law on their income derived from both within and outside China.
Non-resident individuals shall pay individual income tax in accordance with this Law on their income derived from within China.

Tax Rate Table

Level	Annual Taxable Income	Tax Rate(%)	Quick Deduction
1	Not exceeding 36,000 yuan	3	0
2	Part exceeding 36,000 yuan but not exceeding 144,000 yuan	10	2,520
3	Part exceeding 144,000 yuan but not exceeding 300,000 yuan	20	16,920
4	Part exceeding 300,000 yuan but not exceeding 420,000 yuan	25	31,920
5	Part exceeding 420,000 yuan but not exceeding 660,000 yuan	30	52,920
6	Part exceeding 660,000 yuan but not exceeding 960,000 yuan	35	85,920
7	Part exceeding 960,000 yuan	45	181,920

Five Insurances and One Fund Tax Deduction Plan

Five Insurances and One Fund Contribution Standards and Tax Deduction Rules

Contribution Ratios

Endowment Insurance: Employer 20%, Employee 8%
Medical Insurance: Employer 10%, Employee 2%+3 yuan
Unemployment Insurance: Employer 1%, Employee 0.2%
Work Injury Insurance: Employer 0.5%-2%, Employee 0%
Maternity Insurance: Employer 0.8%, Employee 0%
Housing Provident Fund: Employer 5%-12%, Employee 5%-12%

Tax Deduction Rules

Personal contributions to basic endowment insurance, basic medical insurance, unemployment insurance, and housing provident fund (not exceeding the specified ratio and base) can be deducted from the taxable income of individual income tax.
The personal and employer contributions to housing provident fund within the limit of 12% of the employee's average monthly salary of the previous year are allowed to be deducted from the individual's taxable income.
The portion of basic endowment insurance, basic medical insurance, and unemployment insurance paid by the employer and individual exceeding the specified ratio and standard shall be included in the individual's current wage and salary income and subject to individual income tax.

Special Additional Deduction Declaration Rules

Children's Education

Standard deduction of 1,000 yuan per child per month

• Education from age 3 to pre-primary school
• Primary, junior high, and high school education
• Higher education (junior college, undergraduate, master's, doctorate)

Continuing Education

Academic (degree) continuing education: 400 yuan per month
Vocational qualification continuing education: 3,600 yuan per year

• Academic (degree) continuing education period not exceeding 48 months
• Vocational qualification continuing education deducted in the year of obtaining the certificate

Major Medical Expenses

Annual limit of 80,000 yuan

• Portion of personal burden exceeding 15,000 yuan after medical insurance reimbursement
• Can be deducted by本人 or spouse
• Medical expenses incurred by minor children can be deducted by either parent

Housing Loan

Standard deduction of 1,000 yuan per month

• Interest expense on first home loan
• Deduction period not exceeding 240 months
• Only one spouse can be chosen for deduction

Housing Rent

Standard deduction of 800-1,500 yuan per month

• Municipalities, provincial capitals: 1,500 yuan/month
• Cities with population over 1 million: 1,100 yuan/month
• Cities with population not over 1 million: 800 yuan/month

Elderly Support

Only child: 2,000 yuan per month
Non-only child: Share 2,000 yuan per month

• Parents aged 60 and above
• Grandparents or maternal grandparents aged 60 and above whose children have all passed away

Infant and Toddler Care (0-3 years old)

Standard deduction of 1,000 yuan per infant/toddler per month

• From birth month to before reaching 3 years old
• Parents can choose one party to deduct 100% of the deduction standard
• Or choose both parties to deduct 50% of the deduction standard respectively

Personal Pension & Tax-Advantaged Health Insurance Rules

Personal Pension

Contribution phase: Personal contributions to personal pension fund accounts are deducted from comprehensive income or business income according to the annual limit standard of 12,000 yuan.
Investment phase: Investment income credited to personal pension fund accounts is temporarily exempt from personal income tax.
Withdrawal phase: Personal pensions received by individuals are not included in comprehensive income and are separately subject to personal income tax at a rate of 3%.

Personal Pension Tax Preference Table

Annual Income Range	Applicable Tax Rate	Tax Refundable with Full Contribution
Below 36,000 yuan	3%	360 yuan
36,000-144,000 yuan	10%	1,200 yuan
144,000-300,000 yuan	20%	2,400 yuan
300,000-420,000 yuan	25%	3,000 yuan
420,000-660,000 yuan	30%	3,600 yuan
660,000-960,000 yuan	35%	4,200 yuan
Above 960,000 yuan	45%	5,400 yuan

Tax-Advantaged Health Insurance

Expenses for individuals purchasing eligible commercial health insurance products are allowed to be deducted before tax when calculating taxable income in the current year (month), with a deduction limit of 2,400 yuan per year (200 yuan per month).
Expenses for employers purchasing eligible commercial health insurance products for employees in a unified manner shall be included in employees' personal wages and salaries respectively, treated as personal purchases, and deducted according to the above limit.
Tax-advantaged health insurance products have both protection functions and savings functions, including medical insurance, personal account accumulation, etc.

Tax-Advantaged Health Insurance Tax Preference Table

Annual Income Range	Applicable Tax Rate	Tax Refundable with Full Purchase
Below 36,000 yuan	3%	72 yuan
36,000-144,000 yuan	10%	240 yuan
144,000-300,000 yuan	20%	480 yuan
300,000-420,000 yuan	25%	600 yuan
420,000-660,000 yuan	30%	720 yuan
660,000-960,000 yuan	35%	840 yuan
Above 960,000 yuan	45%	1,080 yuan

Personal Tax Planning