Income & Deductions
Annual one-time bonus (year-end raise / performance award)
Gross monthly salary — annualised automatically (× 12)
Pension / Medical / Unemployment / Housing Fund — employee share
Children education / elderly support / mortgage interest, etc.
Annual Deductions (SI + Sp. Add.)
0
Compare Two Tax Methods
Method A: Bonus Taxed Separately
Method B: Bonus Merged into Comprehensive Income
Detailed Comparison
| Item | Separate Tax | Merged Comprehensive |
|---|
💡 2026 Year-End Bonus IIT Rate Table (Separate Tax · 7 Brackets)
| Tier | Bonus Range (¥) | Monthly Equivalent | Rate | Quick Deduction |
|---|
View calculation formulas
Separate bonus tax: Divide the bonus by 12 → find the monthly-converted rate R and quick-deduction QD.
Bonus tax = Bonus × R − QD.
After-tax bonus = Bonus − Bonus tax.
Merged into comprehensive income: add the bonus to annual gross salary.
Taxable income = Annual salary + Bonus − ¥60,000 basic deduction − Annual SI & HF − Annual special additional deductions.
Annual IIT = Taxable income × Annual rate − Annual quick deduction (annual comprehensive brackets).
Total after-tax income = Annual salary + Bonus − Annual SI & HF − Annual IIT.
All calculations use integer fen-cents to avoid floating-point errors; results are displayed in yuan.
Separate Bonus Tax vs. Merged Comprehensive
Policy Background: Under the extended 2026 IIT rules for annual one-time bonuses, a resident taxpayer may elect either of the following two methods:
- Separate tax: the bonus is NOT merged into annual comprehensive income. The bracket is found by dividing by 12. Simple to calculate; often better for larger bonuses or people with relatively low salaries.
- Merged comprehensive: added together with salary & wages for the year. Benefits from the full ¥60,000 annual basic deduction plus all other deductions. Better for lower earners or anyone with large annual deductions.
Bonus Threshold “¥1 Extra → ¥Thousands Lost” Traps
¥1 more bonus → ¥thousands less take-home: Separate taxation has 7 classic thresholds. Crossing a threshold by just ¥1 bumps you to a higher rate bracket while the quick-deduction constant stays the same — tax surges and after-take-home drops.
Threshold (¥)
Extra Tax if +¥1
Net After-Tax Loss
How to avoid the traps: Always calculate before paying. If the planned bonus sits just above a threshold, consider capping it exactly at the threshold (e.g. ¥36,000). Employees take home more and the employer spends the same or less.
Related Tools & Guides
❓ FAQ
How long is the separate bonus-tax policy valid?
Per MOF guidance, the preferential separate-tax method for annual one-time bonuses is extended through 31 December 2027. From 1 January 2028, bonuses must be merged into annual comprehensive income.
What are the bonus "tax trap" zones?
Ranges where earning ¥1 more bonus actually reduces after-tax take-home due to bracket jumps. Classic traps: ¥36,000→38,567 (+¥1 costs ¥2,310 extra tax), ¥144,000→160,500, ¥300,000→318,333, etc. Stay below these thresholds if possible.
Can splitting the bonus save tax?
Yes. Split the payment into (1) annual one-time bonus (separate tax) and (2) monthly salary/performance bonus (merged). Tuning the ratio can lower the total burden. Use this calculator to test splits.
How is a bonus taxed if I resign?
A bonus paid in the year you leave the company still qualifies for either method. The election right remains unchanged. It will be rolled into the annual reconciliation filing the following year.
Do quarterly bonuses use the same method?
No. The separate-tax election may be used only once per tax year. Quarterly, half-year, performance and other awards must be merged with the salary of the month they are paid.