Commission income belongs to income from labor remuneration. The commission income obtained by insurance salesmen and securities brokers belongs to labor remuneration income, and the balance of income excluding value-added tax after deducting 20% expenses is income. After deducting exhibition expenses and additional taxes, the income will be incorporated into the comprehensive income of the current year and personal income tax will be calculated and paid. The exhibition expenses of insurance salesmen and securities brokers are calculated at 25% of their income. For the commission income obtained by insurance salesmen and securities brokers, the withholding unit shall calculate and withhold individual income tax according to the cumulative withholding method. Combined with the relevant provisions of the Individual Income Tax Law and its implementing regulations, the specific calculation formula for withholding individual income tax by cumulative withholding method is: tax payable in the current period = (cumulative withholding taxable income× withholding rate-quick deduction)-cumulative tax reduction and exemption-cumulative withholding taxable income = cumulative withholding taxable income-cumulative expense deduction-cumulative other deduction, in which the income is deducted by 20% according to the income excluding value-added tax.
Legal analysis
Article 963 of the Civil Code of People's Republic of China (PRC): If the broker facilitates the establishment of the contract, the client shall pay the remuneration as agreed. If the remuneration of the broker is not agreed or clearly agreed, and cannot be determined according to the provisions of Article 510 of this Law, it shall be reasonably determined according to the services of the broker. Where an intermediary provides media services for concluding a contract, the remuneration of the intermediary shall be borne equally by both parties to the contract. If the intermediary facilitates the establishment of the contract, the expenses of the intermediary activities shall be borne by the intermediary.