When an enterprise issues a one-time bonus for the whole year, it can choose to issue it together with the salary or separately. Among them, the bonus will have an impact on personal income tax and social security contributions, because the calculation of personal income tax and social security contributions is calculated on a monthly basis. If the annual one-time bonus is incorporated into the salary, the monthly income and social security contributions will increase, which will affect the calculation of personal income tax and social security contributions. In addition, if you choose to distribute it separately, it may lead to employee dissatisfaction. Because in employees' cognition, bonus is an extra income. If it is paid separately, employees can more clearly feel the source and significance of this income. At the same time, separate distribution can also enable enterprises to better highlight the recognition and encouragement of employees and improve employee satisfaction. Therefore, when enterprises choose the one-time bonus payment method for the whole year, they need to consider it comprehensively according to their own situation and employee needs. It is suggested that enterprises fully understand the calculation rules of personal income tax and social security contributions before making decisions, and explain them clearly to employees.
Do I have to pay tax on the annual one-time bonus? Yes, the annual one-time bonus is taxable. The calculation of personal income tax is based on accumulated income, so the payment of one-time bonus for the whole year will make the calculation of personal income tax for the whole year high. According to the individual income tax law, the annual one-time bonus is subject to individual income tax at the rate of 20%.
Whether the annual one-time bonus is combined or distributed separately has its own advantages and disadvantages. Enterprises need to fully understand the relevant calculation rules and employee needs before distribution, comprehensively consider and choose the appropriate method, and explain it to employees in time. In addition, enterprises also need to abide by personal income tax laws and regulations and pay personal income tax according to regulations.
Legal basis:
Article 32 of the Individual Income Tax Law of People's Republic of China (PRC), wages, salaries, royalties, dividends, bonus income and accidental income.