Can employee welfare expenses be deducted before tax?

Employee welfare expenses can be deducted before tax in proportion. The employee welfare expenses incurred by the enterprise shall be deducted if they do not exceed 14% of the total wages and salaries.

According to Article 34 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC), reasonable wages and salaries incurred by enterprises are allowed to be deducted. The wages and salaries mentioned in the preceding paragraph refer to all cash or non-cash labor remuneration paid by an enterprise to its employees in each tax year, including basic wages, bonuses, allowances, subsidies, year-end salary increase, overtime pay and other expenses related to the employment or employment of employees.

Extended data:

The welfare expenses of enterprise employees refer to the welfare expenses provided by enterprises for employees except wages, bonuses, allowances, subsidies included in the management of total wages, employee education funds, social insurance premiums, supplementary old-age insurance premiums (annuities), supplementary medical insurance premiums and housing accumulation funds, including the following cash subsidies and non-monetary collective benefits paid to or for employees.

Enterprises to provide employees with transportation, housing, communications and other welfare benefits have been monetized, the monthly payment of housing subsidies, transportation subsidies or vehicle reform subsidies, communications subsidies included in the total wages of employees, no longer included in the management of employee welfare funds; If the monetization reform has not been implemented, the related expenses incurred by the enterprise shall be managed as employee welfare expenses, but according to the unified regulations of the state on the reform policy of enterprise housing system, it is not allowed to purchase and build housing for employees.

Baidu Encyclopedia-Regulations for the Implementation of People's Republic of China (PRC) Enterprise Income Tax Law