Starting from January 1,2021, the simple and optimized methods of withholding and prepayment of individual income tax (IIT) for the two types of taxpayers are as follows:
 

Income from Wage & Salary

Resident individual who has withheld and reported the individual income tax on wage and salary income in the same company in each month of the previous tax year and whose annual wage and salary income does not more than 60,000 yuan shall meet the following three conditions simultaneously:
 
1.Worked in the same company from January to December of the previous tax year, and withheld and prepaid the personal income tax on wage and salary income.
2.The accumulated wage and salary income from January to December of the previous tax year (including all kinds of salary income such as annual one-time bonus, without deduction of any expenses and tax-free income) shall not exceed 60,000yuan.
3.From January of current tax year, the resident individual still works in the company and obtains the wage and salary income.
 
The withholding agent shall, in accordance with the provisions, handles the declaration of full withholding of all employees, and indicates in the remarks column of the corresponding taxpayers in the individual income tax withholding declaration form that "all the previous months have been reported and the annual income does not exceed 60,000 yuan".

 

Income from remuneration for personal service

Resident individual, such as insurance salesman and securities broker, who has withheld and prepaid individual income tax on remuneration for labor service with accumulative withholding method, shall meet the following three conditions at the same time:
 
1.From January to December of the previous tax year, received remuneration in the same company and withheld and prepaid the individual income tax of labor remuneration income according to the cumulative withholding method;
2.The accumulated labor remuneration (without deduction of any expenses and tax-free income) from January to December of the previous tax year shall not exceed 60,000 yuan;
3.Obtains the income from service remuneration and withholding and prepayment of tax according to the accumulative withholding method since January of current tax year.
 

Operating guide

1. If it is reported by the system, the electronic tax bureau will automatically summarize and prompt the list of employees who may meet the requirements in accordance with the withholding declaration of the previous year. After check and confirm based on the actual figures, the withholding agent shall withhold the individual income tax according to the method specified in the announcement.
2. If the paper report is adopted, the withholding agent shall judge the taxpayer who meets the provisions of the announcement according to the withholding data of the previous year to complete declaration. Starting from the tax withholding declaration in January of the current year, the withholding agent shall fill in the remark’s column of the corresponding taxpayers in the individual income tax withholding declaration form" all the previous months have been reported and the annual incomes are not more than 60,000 yuan".


Resident individual: a taxpayer who has domicile in China or has no domicile but has lived in China for accumulated 183 days in a tax year.
 
Relevant policy：
Announcement No.19 2020 of State Taxation Administration