According to the latest salary data released by Shenzhen Statistical Bureau,  the average monthly salary of Shenzhen employees of urban non-private enterprises for 2020 is RMB11,620 (The average yearly salary is RMB139,436, round to a whole number). Hereby, Shenzhen Tax Bureau issued the Notice on Adjustment of IIT Deduction & Exemption Standard for 2021 in Shenzhen, stating that the IIT exemption standard for one-off severance compensation as well as the IIT deduction standard for housing provident fund, enterprise annuity and occupational annuity will be adjusted from 1 June 2021, the detailed information is as following:

1. Adjustment on IIT exemption standard for one-off severance compensation
   
   According to the regulations, one-off severance compensation obtained by the employees (including economic compensation, living allowance and other subsidies paid by the employer) shall be exempted from IIT for the part that within 3 times of local average salary of last year.
   
   In light of this, the IIT exemption standard for one-off severance compensation obtained by Shenzhen employees shall be adjusted to RMB418,308 (inclusive), the excess part shall be calculated and subjected to IIT in accordance with relevant regulations.
   
   
2. Adjustment on deduction standard for housing provident fund
   
   According to the regulations, if the amount of housing provident fund actually paid by employer and employee is within 12% of the individual monthly average salary of last year, it is allowed to be deducted before calculating individual taxable income.
   
   In light of this, the monthly contribution base of housing provident fund for Shenzhen employers and employees shall not exceed RMB34,860 (11,620*3). The excess part over the aforementioned contribution rate or base shall be calculated as individual taxable income of current period and subjected to IIT.
   
   
3. Adjustment on deduction standard for enterprise annuity and occupational annuity
   
   According to the regulations, the amount of  enterprise annuity and occupational annuity paid by employees are allowed to be deducted if it is within 4% of the employee’s contriobution base.
   
   In light of this, the contribution base of enterprise annuity and occupational annuity for Shenzehn employees shall not exceed RMB34,860 (11,620*3), the excess part shall be calculated as individual’s taxable income of current period and subjected to IIT.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.