Individual Resident Taxpayers who received annual lump sum bonus, in conformity with the provision of Guoshuifa [2005] No.9, are eligible to choose any of the following taxation methods to calculate the Individual Income (IIT) tax before December 31, 2021:
1. Computation of Individual Income Tax by adding the bonus into the Comprehensive Income of the Year
2. Annual lump sum bonus divided by 12 months, use the quotient to determine applicable tax rate and quick deduction factor, according to the following” Monthly Converted Comprehensive Income Tax Rate Table “. Its formula showed as below:
Taxable liability = annual lump sum bonus * applicable tax rate - quick deduction factor

The withholding agents decide to select the optimal option to calculate more tax benefit to the taxpayers,

From January 1, 2022, when individual resident taxpayers obtain one-time bonus for the whole year, they shall be aggregated into the current year's comprehensive income to calculate and pay the individual income tax.


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