What items are included in the salary?
What are the rules for pre-tax deductions?
How to fill in the declaration form?
1. Scope of wages and salaries
Article 34 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China stipulates that "reasonable wage and salary expenses incurred by an enterprise shall be allowed to be deducted.
The term "wages and salaries" as used in the preceding paragraph refers to all cash or non-cash labor remuneration paid by an enterprise to its employees in each tax year, including basic salary, bonuses, allowances, subsidies, year-end salary increases, overtime wages, and other expenses related to employees' positions or employment. ”
2. What is a reasonable salary and salary?
The term "reasonable wages and salaries" as mentioned in Article 34 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China refers to the wages and salaries actually paid to employees by enterprises in accordance with the provisions of the wage and salary system formulated by the general meeting of shareholders, the board of directors, the remuneration committee or relevant management agencies. When confirming the reasonableness of wages and salaries, the tax authorities can grasp the following principles:
(1) The enterprise has formulated a relatively standardized employee wage and salary system;
(2) The wage and salary system formulated by the enterprise is in line with the industry and regional level;
(3) The wages and salaries paid by the enterprise for a certain period of time are relatively fixed, and the adjustment of wages and salaries is carried out in an orderly manner;
(4) The enterprise has fulfilled its obligation to withhold and pay individual income tax on the wages and salaries actually paid in accordance with the law;
(5) The arrangement of wages and salaries shall not be for the purpose of reducing or evading taxes.
Note: The deduction base for calculating employee welfare expenses, employee education expenses and trade union funds is the total amount of wages and salaries, excluding the employee welfare expenses, employee education expenses, trade union funds, pension insurance premiums, medical insurance premiums, unemployment insurance premiums, work-related injury insurance premiums, maternity insurance premiums and other social insurance premiums and housing provident fund. The wages and salaries of enterprises that are state-owned shall not exceed the limit amount given by the relevant government departments, and the excess part shall not be included in the total wages and salaries of the enterprise, nor shall it be deducted in the calculation of the taxable income of the enterprise.
3. Special matters of wages and salaries
01: Regulations on the time of pre-tax deduction of wages and salaries
The withholding and remittance of annual wages and salaries actually paid by the enterprise to the employees before the end of the annual final settlement is allowed to be deducted in accordance with the provisions in the year of remittance.
02: The issue of pre-tax deduction of corporate welfare subsidy expenditure
The welfare subsidies included in the wage and salary system of enterprise employees and fixed and paid together with wages and salaries are in line with the provisions of Article 1 of the Notice of the State Administration of Taxation on the Deduction of Wages and Salaries and Employee Welfare Expenses of Enterprises (Guo Shui Han [2009] No. 3), and can be deducted before tax as wages and salaries incurred by enterprises.
03: Is the labor dispatch fee a salary?
The expenses actually incurred by the enterprise in accepting external labor dispatch shall be deducted before tax in accordance with the regulations in two cases: the expenses paid directly to the labor dispatch company in accordance with the agreement (contract) shall be regarded as labor expenses, and the expenses directly paid to individual employees shall be regarded as wages and salaries and employee welfare expenses. Among them, the expenses that belong to wages and salaries are allowed to be included in the base of the total wages and salaries of the enterprise, as the basis for calculating the deduction of other related expenses.
04:How to deduct the expenses of hiring seasonal workers and temporary workers?
The actual expenses incurred by an enterprise in employing seasonal workers, temporary workers, interns and re-employed retirees shall be divided into wages and salaries and employee welfare expenses, and shall be deducted before enterprise income tax in accordance with the provisions of the Enterprise Income Tax Law of the People's Republic of China. If it is a wage and salary expense, it is allowed to be included in the base of the total wages and salaries of the enterprise as the basis for calculating the deduction of other related expenses.
05: How to deduct equity incentive costs?
Resident enterprises listed in mainland China (hereinafter referred to as listed companies) shall establish employee equity incentive plans in accordance with the provisions of the Administrative Measures for Equity Incentives of Listed Companies (for Trial Implementation) (Zheng Jian Gong Si Zi [2005] No. 151, hereinafter referred to as the "Administrative Measures"), and in accordance with the relevant provisions of the Accounting Standards for Business Enterprises in the Mainland, when the equity incentive plan is granted to the incentive object, the cost or expense of the listed company for the relevant year shall be calculated and determined according to the fair price and quantity of the shares, as consideration for the services provided by the incentive object. The treatment of enterprise income tax of the employee equity incentive plan established by the above-mentioned enterprises shall be implemented in accordance with the following provisions:
(1) If the equity incentive plan can be exercised immediately after the implementation of the equity incentive plan, the listed company may calculate and determine the difference and quantity between the fair price of the stock at the time of actual exercise and the actual exercise price of the incentive object as the wage and salary expenses of the listed company in the current year, and make a pre-tax deduction in accordance with the provisions of the tax law.
(2) After the implementation of the equity incentive plan, the rights can only be exercised after a certain number of years of service or when the prescribed performance conditions are met (hereinafter referred to as the waiting period). The relevant costs and expenses calculated and recognized in the accounting during the waiting period of the listed company shall not be deducted when calculating and paying the enterprise income tax in the corresponding year. After the equity incentive plan is exercised, the listed company can calculate and determine the difference and quantity between the fair price of the stock at the time of actual exercise and the price paid by the incentive object in the current year, and make a pre-tax deduction in accordance with the provisions of the tax law.
If a resident enterprise or a non-listed company listed outside the mainland establishes an employee equity incentive plan in accordance with the provisions of the Administrative Measures, and the accounting treatment of enterprises is also handled in accordance with the relevant provisions of the mainland accounting standards, the treatment of enterprise income tax related to the equity incentive plan may be implemented in accordance with the above provisions.
Policy basis
1. Enterprise Income Tax Law of the People's Republic of China
2. Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China
3. Notice of the State Administration of Taxation on Issues Concerning the Deduction of Wages and Salaries and Employee Welfare Expenses of Enterprises (Guo Shui Han [2009] No. 3)
4. Announcement of the State Administration of Taxation on Several Tax Treatment Issues Concerning the Taxable Income of Enterprise Income Tax (Announcement No. 15 [2012] of the State Administration of Taxation)
5. Announcement of the State Administration of Taxation on Issues Concerning the Treatment of Enterprise Income Tax in the Implementation of Equity Incentive Plans by Mainland Resident Enterprises (Announcement No. 18 [2012] of the State Administration of Taxation)
6. Announcement of the State Administration of Taxation on Issues Concerning the Pre-tax Deduction of Wages and Salaries and Employee Welfare Expenses of Enterprises (Announcement No. 34 [2015] of the State Administration of Taxation)
Fourth, fill in the case
Company A's total salary accrual in 2023 is 5 million yuan, and the actual salary of employees is 4.9 million yuan.
In 2023, the company will accrue wages and salaries of 5 million yuan on its accounts, but the actual expenditure is 4.9 million yuan, so the amount of wages and salaries tax this year is 4.9 million yuan. Fill in the declaration form as follows:
Previous Review
Notice on the 2023 annual enterprise income tax final settlement
Enterprise Income Tax Final Settlement Topic 2丨One-time deduction policy for fixed assets
Topic 3 of Enterprise Income Tax Final Settlement丨Depreciation and Deduction Policy for Fixed Assets
Special Topic 4 of Enterprise Income Tax Final Settlement | Preferential income tax policies for small and low-profit enterprises
Enterprise income tax final settlement topic 5丨Common expenses pre-tax deduction ratio
Enterprise Income Tax Final Settlement Topic 6丨Pre-tax Deduction Voucher (1)
Enterprise Income Tax Final Settlement Topic 6丨Pre-tax Deduction Voucher (2)
Enterprise Income Tax Final Settlement Topic 6丨Pre-tax Deduction Voucher (3)
Enterprise Income Tax Final Settlement Topic 6丨Pre-tax Deduction Voucher (4)
Enterprise Income Tax Final Settlement Topic 7丨Provisions on Income Recognition