Pre-tax deduction standard of social security income tax

Article 40 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that the employee welfare expenses incurred by an enterprise shall be deducted if they do not exceed 14% of the total wages and salaries. This provision has changed the previous provision that welfare expenses are deducted according to 14% of the total pre-tax deductible wages, and changed the withholding to factual deduction. In terms of taxation, the Notice of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Deduction of Wages, Salaries and Employee Welfare Expenses stipulates that employee welfare expenses of enterprises mainly include: (1) equipment, facilities and personnel expenses incurred by welfare departments in enterprises that have not yet implemented social functions separately, including equipment, facilities and maintenance expenses of collective welfare departments such as staff canteens, staff bathrooms, barbershops, infirmary, nurseries and sanatoriums, and welfare department staff. (2) Employees' medical care, living, housing, transportation and other subsidies and non-monetary benefits. , including medical expenses paid by enterprises to employees traveling in different places, medical expenses of employees of enterprises who have not implemented medical co-ordination, medical subsidies for employees to support their immediate family members, heating subsidies, heatstroke prevention and cooling expenses for employees, subsidies for employees' difficulties, relief funds for employees' canteens, and transportation subsidies for employees. (3) Other employee welfare expenses incurred in accordance with other regulations, including funeral subsidies, pension expenses, settling-in expenses, family leave travel expenses, etc.

Legal basis:

The special deduction stipulated in Item 1, Paragraph 1, Article 6 of the Individual Income Tax Law includes social insurance premiums such as basic old-age insurance, basic medical insurance and unemployment insurance and housing accumulation fund paid by individual residents in accordance with the scope and standards stipulated by the state; Special additional deductions include children's education, continuing education, medical treatment for serious illness, housing loan interest or housing rent, support for the elderly and other expenses. The specific scope, standards and implementation steps are determined by the State Council and reported to the NPC Standing Committee for the record.