Some taxpayers often ask such questions as “units deduct taxes every month, why i have to pay them back” when processing the annual income tax consolidation. The following is a brief description of two common possible tax replenishment scenarios。
Scenario i
Taxpayers have a replacement job in the middle of the year, with a lower tax rate applied separately for withholding payments, and consolidation of income received at the time of accounting results in the application of a combined income tax rate higher than the withholding rate。
Examples:
Minor week worked for company a in january-august 2022 and company b in september-december。
(i) one tax withheld by company a
A calculated the withholding tax based on its “cumulative salary income - accumulated cost deduction - accumulated special deduction - accumulated special deduction - accumulated other legally determined deductions” in january-august 2022。
Assuming that the salary of minor week is $10,000 per month, the special deduction of $1,500, such as the “three-risk one”, the special deduction of $1,000 for old-age maintenance, and the personal income tax withheld by company alpha for small week:
(ii) one tax on withholding by company b
Cho jumped to company b in august, and company b did not have payroll information prior to the week, so that company b's cumulative withholding started in august and re-apply the 3 per cent withholding rate。
Assuming that xiao chow earns 15,000 yuan a month, that special deductions such as “three-risk one” are 2,000 dollars, that special deductions for old-age maintenance are 1,000 yuan, and that company b withholds monthly withholdings of personal income tax due to small weeks in accordance with the cumulative withholding method, as follows:
(iii) annual remittances for personal income tax
In 2022, company a paid $600 for the accumulated withholding of personal income tax for small weeks, and after its arrival, company b did not have information on the wages received prior to the small week. The cumulative taxable income was calculated from the beginning and the 3 per cent withholding rate was re-applied. Company b paid $840 for the accumulated withholding of personal income tax for small weeks. Both companies applied 3 per cent of the tax rate for withholding advances, with a combined withholding of $1440 for personal income tax。
From 1 march to 30 june 2023, in processing the collection of the consolidated personal income tax for 2022, the income of the two companies and the deductions shall be calculated together, and the annual income tax shall be paid in the amount of $2280-1440 = $840。
Scenario ii
Taxpayers are employed and paid in more than two units, with a double deduction of basic deductions for tax advances (5,000/month)
Examples:
Zheng worked for company a, and received a monthly salary income of $16,000 from company a from january to december 2022, while a monthly salary income of $10,000 from company b. Payment of $3,200 per month by company a for three insurance risks and a monthly housing loan at the time of withholding by company a of the advance payment interest is specifically deducted by $1,000, without other income and deductions, and in company b. In 2022, company a withheld an individual income tax of $5640 and company b withheld an individual income tax of $3480。
As can be seen, zheng repeated the deduction of the basic deduction of $5,000 per month (60000 per year) at the withholding period, which can only be deducted once at the time of the annual remittances. By way of example, after the combined annual income of cheng and cheng combined, the total amount of the taxable tax earned, after deduction of the basic deductibles of $60,000 and the total amount of the special deductions and the special deductions, is $160. 00, the applicable tax rate is 20 per cent and the additional tax is $1428。
