Why does the individual income tax decrease more and more? Expert interpretation: tax rate jump

 Why does the individual income tax decrease more and more? Expert interpretation: tax rate jump

Hong Hao, an employee of an oil exploration and development company in Beijing, expressed his doubts to reporters. In the first half of this year, his tax payment was 270 yuan, but by the middle of the year it had become 900 yuan. He was worried about whether it would increase again near the end of the year.

Before the reform of individual income tax, it was calculated on a monthly basis. On the premise that the monthly income remained unchanged, the monthly tax amount remained basically unchanged. Li Xuhong told reporters that this years collection of individual income tax changed from the original monthly withholding method to the cumulative withholding method. This calculation method is characterized by a trend of low individual income tax deduction before and high after the year. With the increase of accumulated taxable income, there will be a tax rate jump.

The reporter learned that after the transition to the cumulative withholding method, the individual income tax withholding rate table was used, and different withholding rates were applied according to the cumulative withholding amount of taxable income in a tax year. If the accumulated taxable income in a tax year does not exceed 36000 yuan, the withholding rate will remain at the level of 3%. If the accumulated taxable income exceeds 36000 yuan and does not exceed 144000 yuan, the withholding rate will jump from 3% to 10%. This means that when the taxable income at the beginning of the year is low, the lower level withholding rate is applicable, and with the increase of the accumulated amount, there will be the possibility of skip.

Li Xuhong takes Hong Haos tax payment change as an example to introduce tax rate jump. After deducting five insurances and one fund, Hong Haos monthly salary is 15000 yuan, and he enjoys the special additional deduction of 1000 yuan per month for childrens education. His personal income tax prepaid in January should be calculated as follows: (15000 u00d7 1-5000 u00d7 1-1000 u00d7 1) u00d7 3% = 270 yuan. Since the annual income at this time has not exceeded 36000 yuan, it is calculated according to the tax rate of 3%. By may, Hong Haos annual income had reached 45000 yuan, and the first level tax rate of more than 36000 yuan should be calculated according to the second level 10% tax rate, so the advance payment in May should be 900 yuan.

Although the prepaid individual income tax has increased from the beginning of the year, the annual payable individual income tax of Hong Hao is lower than that of last year. Li Xuhong helped him to work out a new account. In the whole year, Hong Hao had to pay 8280 yuan of personal tax, which was more than 10000 yuan less than last years 19200 yuan.

After understanding these knowledge points, Hong Hao was overjoyed, it was just the algorithm changed.. Hong Hao is not the only one who has benefited from the personal tax reform. According to the data of the first three quarters released by the State Administration of Taxation, the individual tax has been reduced by 1764 yuan per capita. Cai Zili, executive deputy director of the tax reduction Office of the State Administration of Taxation, said that this directly increased the income of employees and enhanced their sense of gain.

Source: editor in charge of workers daily: Dai Wenjia, nb12498