China salary calculator 2026

A Chinese payslip has a national half and a local half. The individual income tax is set in Beijing and is the same in every province. The social insurance and housing fund deductions, which on a typical salary are far bigger than the tax, are set city by city, with different rates, floors and ceilings in Shanghai, Shenzhen or Chengdu. This model uses a representative Shanghai employee package, so it describes one large city, not the whole country.

Individual income tax: seven brackets, one standard deduction

Comprehensive income, which for an employee means salary, is taxed on an annual basis across seven brackets. The first 36,000 CNY of taxable income is taxed at 3%, then 10% up to 144,000, 20% up to 300,000, 25% up to 420,000, 30% up to 660,000, 35% up to 960,000 and 45% above that. Before the brackets, a standard deduction of 60,000 CNY a year, or 5,000 CNY a month, comes off, and the employee's social insurance and housing fund contributions are deducted as well. At the minimum wage and well above it this leaves nothing to tax, which is why the first two examples show zero income tax.

Chinese employers withhold on a cumulative basis, so take-home pay is highest in January and drifts down through the year for anyone who crosses into a higher bracket; the model spreads the annual figure evenly instead. It also leaves out the special additional deductions for children's education, housing rent or mortgage interest and elderly care, which lower the real bill for most families.

Five insurances and one fund

The single contribution line of 17.5% in the model stands for the employee's share of the five social insurances (pension, medical, unemployment, work injury and maternity, the last two paid by the employer only) plus the housing provident fund. The housing fund is the distinctive piece: it is compulsory saving matched by the employer, held in the employee's name and usable for buying or renting a home. Every city sets its own rates and contribution bases tied to the local average wage, so an employee in a smaller city sees a lower percentage and a high earner in Shanghai sees the deduction capped. Neither effect is in the model.

What the figures look like

Up to 5,000 CNY a month the effective rate is exactly 17.5%, because the standard deduction alone absorbs all income and only the contributions apply. At the 12,307 CNY average, tax has appeared but is still a seventh of the contribution line. By 40,000 CNY the picture has changed: tax is 4,340 CNY against 7,000 CNY of contributions and the total deduction is 28.4%, with the 20% and 25% brackets in play. The minimum wage, like the contribution rate, is a single city's figure; minimum wages are set provincially.

The employer's share is the big one

The employer pays into the same five insurances and the housing fund at a much higher combined rate, 30% of gross in the Shanghai model. On the 12,307 CNY average that is 3,692 CNY a month, for a total employment cost of 15,999 CNY. Put together with the employee's 2,154 CNY, close to 5,850 CNY of the monthly cost of an average job goes to insurance and housing accounts rather than to net pay. A gross offer therefore understates the true cost by almost a third. The employer cost guide puts this in an international context.

VAT

China's VAT has a standard rate of 13%, which applies to most goods, so 100 CNY of goods becomes 113 CNY. Two reduced rates sit below it: 9% for categories such as agricultural products, utilities, transport and construction, and 6% for most services, including finance, consulting and technology. The VAT calculator handles all three rates, and the reduced rates guide explains how multi-rate systems compare.

Working hours and the holiday system

The standard working week is 40 hours of 8-hour days and the statutory ceiling in the model is 44 hours, the limit written into the Labour Law before overtime rules apply. The model's 2026 calendar contains 5 fixed-date holidays, 4 on weekdays, giving 257 working days: New Year's Day, Labour Day on 1 May, and the National Day holiday on 1, 2 and 3 October. What it cannot capture is the annual State Council calendar, which stretches the National Day and Spring Festival breaks into golden weeks by turning nearby weekend days into official working days. The lunar holidays, Spring Festival, Qingming, Dragon Boat and Mid-Autumn, are absent from the model altogether, so the working days calculator will not match a Chinese HR calendar exactly.

How to read the estimate

The income tax brackets and the 60,000 CNY standard deduction are national law and apply everywhere. Everything else is a Shanghai approximation: the 17.5% employee rate, the 30% employer rate, the minimum wage and the absence of contribution ceilings. For a mid-range Shanghai salary with no special deductions the net is close; in another city, on a very high salary, or with family deductions, expect a real payslip to differ by a few percentage points, usually in the employee's favour. As a first comparison with Hong Kong or Vietnam, the shape of the result holds.