Policy Contents

According to the announcement, if a resident individual receives an annual one-time bonus that meets the provisions of the "Notice of the State Administration of Taxation on Adjusting the Calculation and Collection of Individual Income Tax on Annual One-time Bonuses and Other Issues" (Guoshuifa [2005] No. 9), it will not be included in the annual comprehensive income. Instead, the income from the annual one-time bonus is divided by 12 months to determine the applicable tax rate and quick deduction amount according to the monthly conversion comprehensive income tax rate table, and the tax is calculated separately.

The calculation formula: Tax Payable = Annual One-time Bonus Income × Applicable Tax Rate - Quick Deduction Amount

At the same time, resident individuals who receive an annual one-time bonus can also choose to include it in the calculation of their annual comprehensive income for taxation. This announcement is valid until December 31, 2027.

Policy Subjects

Resident individuals.

Application Conditions

The announcement specifies that from January 1, 2024, to December 31, 2027, resident individuals with annual comprehensive income not exceeding 120,000 yuan and who need to settle and pay additional taxes, or those whose annual settlement and payment of additional taxes do not exceed 400 yuan, are exempt from the individual income tax comprehensive income settlement and payment. This exemption does not apply to resident individuals who have a withholding agent that has not withheld and prepaid taxes in accordance with the law when receiving comprehensive income.

Policy References

"Announcement of the Ministry of Finance and the State Taxation Administration on the Continuation of Preferential Policies for Individual Income Tax on Annual One-time Bonuses and Other Incomes" (No. 42 of 2021).

"Notice of the Ministry of Finance and the State Taxation Administration on the Issue of Linking Preferential Policies Related to the Amendment of the Individual Income Tax Law" (Caishui [2018] No. 164).