Taxes on Foreign Workers in China

In China

Westerners are levied a surcharge for just about everything they purchase, from food to train tickets. This tax can range from 4 percent to 10 percent, even up to 100 percent! In the past, some foreigners teaching in China were able to secure a discount card, which showed they were working in the country, but these aren’t as common these days.

Taxes on the wages of foreign teachers is on a sliding scale – for example 13% is the starting point. You’re taxed on a monthly income if above a base of Y4,800 (this base amount changes periodically).

Some visiting scholars or exchange language teachers can be free of tax according to some agreements between governments, and some schools and universities will pay taxes for you.

U.S. Taxes

As an American working abroad, you will be exempt from U.S. income taxes as long as you make less than US$96,000 annually. You should still file a tax return with the Internal Revenue Service. Even though you may not owe any money, not filing can result in huge hassles years down the line when you have
long forgotten your failure to file. The burden will be yours to prove to the IRS that you were actually overseas at the time and that you didn’t make enough money to require any tax payment.

For complete information, get the the IRS publication “Tax Guide for U.S. Citizens Abroad.

Several large American tax firms do business in China, and would be available to help with your Chinese taxes.