As we all know, since October 1, 2018, China began to use the threshold and tax rate of the new personal income tax to calculate and levy personal income tax on wages and salaries, which will be fully implemented nationwide from January 1, 2019. The implementation of the new policy has not only greatly adjusted the tax rate range, but also increased the threshold from 3500 yuan to 5000 yuan. So, what changes will the reform of the new policy bring to our individual taxpayers?
Let's compare the old and new tax rates:
New tax rate table:
Old tax rate table:
From the comparison between the old and new tax rate tables, it is not difficult to find that for the first four series, while the taxable income (i.e. grade distance) grade distance changes, the quick calculation deduction is also changing. Excluding the first level, the quick calculation deduction in the new tax rate table is significantly higher than that in the current tax rate table. For the latter three levels, the stage distance has not changed, only the quick calculation deduction has changed. Therefore, we can find that the change of the new tax rate mainly affects the middle and low-income groups, which is a good policy for the middle and low-income groups.
How to calculate the new individual income tax? The calculation formula is:
Taxable income tax = total income - 5000 yuan, basic deduction of expenses (i.e. threshold) - special deduction of five insurances and one fund - other deductible items deducted according to law (e.g. commercial health insurance purchased by individuals) - six additional deductions
Tax payable = taxable income tax * tax rate
Next, let's give two examples to see how much can be changed and how much less tax can be paid?
Hypothesis: Zhang San, a Chinese citizen, has a monthly salary of 12500 yuan and a total of 700 yuan for five insurances and one fund, regardless of other deductible items and six additional deductions. We first calculate the taxable income according to the old tax law. Under the old tax law, the taxable income = (12500-3500-700) = 8300 yuan, which is applicable to level 2 in the old tax rate table, and the taxable amount = 8300 * 20% - 555 = 1105 yuan. Calculated according to the new tax rate: taxable income = 12500-5000-700 = 6800 yuan, taxable amount = 6800 * 10% - 210 = 470 yuan. In contrast, the implementation of the new policy has really exempted a lot of taxes for middle and low-income people.
The individual income tax reform is a good thing for everyone. Roll up your sleeves and work hard in 2019 to be a glorious taxpayer.