Year-End Bonus Tax in China: Separate or Combined? (2026)

In China, your year-end bonus (全年一次性奖金) can be taxed in two different ways — and the difference can be thousands of yuan. This guide explains both methods and how to pick the cheaper one.

1. The Two Methods

Method A: Separate Taxation (单独计税)

The bonus is divided by 12, and the result is used to find a tax rate from the monthly rate table. The whole bonus is then taxed at that rate minus the quick deduction.

Bonus ÷ 12 (monthly equivalent)	Rate	Quick Deduction
≤ 3,000	3%	0
3,000 – 12,000	10%	210
12,000 – 25,000	20%	1,410
25,000 – 35,000	25%	2,660
35,000 – 55,000	30%	4,410
55,000 – 80,000	35%	7,160
> 80,000	45%	15,160

Method B: Combined with Annual Income (并入综合所得)

The bonus is added to your total annual taxable income and taxed at the progressive comprehensive rates (3% to 45%).

2. Worked Examples

Example 1: Salary ¥30,000/month, Bonus ¥60,000

Annual taxable income (excluding bonus): (30,000 − 5,000 − 4,500) × 12 = ¥246,000

Method A (separate):

60,000 ÷ 12 = 5,000 → rate 10%, quick deduction 210
Tax = 60,000 × 10% − 210 = ¥5,790

Method B (combined):

Combined taxable = 246,000 + 60,000 = 306,000
Total tax = 306,000 × 25% − 31,920 = 44,580
Tax without bonus = 246,000 × 20% − 16,920 = 32,280
Bonus tax = 44,580 − 32,280 = ¥12,300

Winner: Method A (separate) — saves ¥6,510 in this case. Higher earners often benefit from separate taxation because the bonus avoids being pushed into a higher bracket.

Example 2: Lower income

For workers with lower annual income (e.g., total income under ¥100,000), combining the bonus can be cheaper — the bonus fills the unused portion of the lower tax brackets (3% or 10%) instead of being taxed at 10%+ separately.

3. When Is This Policy Available?

The option to choose separate taxation for year-end bonuses has been extended through December 31, 2027. Each year, you can decide which method to use when filing — pick the one that minimizes your total tax.

4. Common Mistakes

Not comparing both methods — many people default to one method and overpay.
Ignoring the "cliff" effect — a bonus just above a bracket boundary can be taxed much more (e.g., ¥36,000 vs ¥36,001 separate tax jumps significantly).
Forgetting special deductions affect the combined method — if you have large deductions, combining the bonus may be better.

5. Quick Rule of Thumb

Annual income below ~¥100,000: usually better to combine
Annual income above ~¥200,000: usually better to tax separately
In between: always compare — the exact answer depends on your deductions

Tip: Don't guess — use our free calculator to compare both methods with your exact numbers in seconds.

📊 Compare My Bonus Tax Options

This article is for general information only and does not constitute tax advice.