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Our country's laws stipulate that if a worker's wage income reaches the standard for paying wage tax stipulated by the state, then the excess amount must be subject to personal income tax according to the relevant tax rate. So what are the latest wage tax deduction standards for 2020? After reading the following content compiled by Dongguan Feng Chao editor for you, it will definitely be helpful to you. 1. The latest wage tax deduction standards in 2020
1. Calculation formula for individual income tax The calculation formula for individual income tax on wages is: Tax payable = (income from wages and salaries - "five social insurances and one housing fund" - deductions) × applicable tax rate - quick deductions The starting point for individual income tax is 5,000, and the calculation method using the excess progressive tax rate is as follows:
Tax payment = monthly taxable income * tax rate - quick deduction amount. Actual salary = payable salary - four insurance premiums - tax payment.
Monthly taxable income = (payable salary - four housing funds) - 5000
2. Collection method: Personal income tax is collected through two methods: source withholding and self-declaration. The unit or individual that pays the income is the withholding agent for personal income tax. If the taxpayer obtains salary income from more than two places and there is no withholding agent, or if there is a withholding agent but the withholding agent fails to withhold and pay taxes in accordance with the tax law, the taxpayer shall declare and pay taxes on his own.
Note: First, the tax-inclusive and tax-exclusive brackets listed in this table are the income amounts after deducting relevant expenses in accordance with tax laws; Second, the tax-inclusive brackets apply to the wages and salaries for which the tax is borne by the taxpayer; the tax-exclusive brackets apply to the wages and salaries for which the tax is paid by others (units).
2. Tax deduction for economic compensation for termination of labor contract According to the laws of my country and my personal legal practice, it can be concluded that when an individual terminates the labor relationship with an employer such as an enterprise, institution, government agency, social group, etc., the one-time compensation income (including economic compensation, living allowance and other subsidies) obtained by the individual is divided into two situations:
1. In principle, the one-time living allowance paid by an enterprise to employees who have worked for a certain number of years, are of a certain age or are close to retirement age for internal retirement, as well as the one-time economic compensation and other expenses paid by the enterprise to employees whose labor contracts are terminated, including expenses for buying out seniority, etc., can be deducted before corporate income tax. If the amount of various compensatory expenses is large and the one-time amortization has a greater impact on corporate income tax, it can be evenly distributed in subsequent years. The specific depreciation period will be determined by the tax bureau of each province based on local actual conditions. For example, Fujian Province has clearly stipulated that if an enterprise is declared bankrupt in accordance with relevant national laws, the compensation received by employees from the bankrupt enterprise (the fees paid to employees by bankrupt industrial enterprises in the pilot cities listed under the State Council are called "resettlement fees"; the fees paid to employees by enterprises not included in the pilot cities and those included in the pilot cities but not industrial enterprises are called "economic compensation") are exempt from personal income tax. 2. The one-time economic compensation income obtained by an individual due to the termination of the labor relationship with the employer, including the economic compensation, living allowance and other subsidies issued by the employer, and the part of the income within three times the local average annual salary of employees in the previous year, is exempt from personal income tax. The relevant legal basis is the Notice on the Exemption of Individual Income Tax on One-off Compensation Income Received by Individuals from Termination of Labor Relationship with Employers issued by the Ministry of Finance and the State Administration of Taxation in 2001, which clearly stipulates: "The one-off compensation income (including economic compensation, living allowance and other subsidies issued by the employer) received by an individual due to termination of labor relationship with an employer, within three times the local average wage of employees in the previous year, is exempt from individual income tax."
Individual income tax should be calculated on the portion of one-time economic compensation income received by an individual that exceeds three times the local average wage of employees in the previous year. The specific averaging method is: take the portion of the one-time economic compensation income that should be calculated for personal income tax and divide it by the individual's years of work in the unit, and use the quotient as the individual's monthly salary, and calculate and pay personal income tax in accordance with tax laws. An individual's years of work in the enterprise shall be calculated based on the actual number of years of work. If the number of years exceeds 12, it will be calculated as 12. The legal basis is the Notice on the Collection of Individual Income Tax on Economic Compensation Obtained by Individuals Due to Termination of Labor Contracts issued by the Ministry of Finance and the State Administration of Taxation: "Taking into account the large amount of one-time economic compensation income obtained by individuals and the fact that the dismissed personnel may not have a fixed income for a period of time, the one-time economic compensation income obtained by individuals can be regarded as wages and salaries obtained for several months at a time, and averaging within a certain period of time is allowed."
3. The nature of taxation Taxation is the most important form and source of income for the state (government) public finance. The essence of taxation is a special distribution relationship formed by the state, in order to meet social public needs, relying on public power, in accordance with the standards and procedures prescribed by law, to participate in the distribution of national income and to forcibly obtain fiscal revenue. It reflects a specific distribution relationship between the state and taxpayers in the distribution of benefits from taxation and taxation under a certain social system. Marx pointed out: 1. "Taxation is the economic basis of government organs, not anything else." 2. "The economic manifestation of the existence of the state is taxation." Engels pointed out: "In order to maintain this public power, citizens need to pay fees - taxes." Holmes, a 19th-century American judge, said: "Taxes are the price we pay for a civilized society." These all illustrate the important role of taxation in a country's economic life and social civilization.
The above is the latest content related to the latest wage tax deduction standards in 2020 compiled by the editor for you. To sum up, the personal income tax threshold is 3,500, and the excess progressive tax rate is used for calculation, that is, the tax paid is equal to the full month's taxable income minus the sincere tax rate minus the quick deduction, and the actual salary is equal to the payable salary minus the four insurances, which is equal to the tax paid.
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