Hello,
A year has snuck up…and it’s time to receive the year’s end (contract end) bonus. BUT…I was told that the bonus is taxed…not at the regular 6% as the monthly salary is taxed…but at 10%. I dont’ know if I’m being jipped…or if this is legally true. They tried to explain something…but since I have no idea about taxes here…I have no idea if they were totally making it up or not.
(I always thought bonuses were THE WHOLE CHUNK…am I wrong?)
Anybody know?
THANKS SO MUCH!
Sure, bonuses are taxable – its income, after all. As for the higher rate, I don’t know. Maybe the bonus pushes you into a higher tax bracket or something?
hey sandman,
thanks for your reply. that makes me feel a little better…but I’m not sure about the higher tax bracket…
thanks!
As Sandman I can confirm that bonuses are to be taxed.
Isn’t 10% the general deduction, i.e. at the end of the year when you file your income tax the actual is calculated only (based on the income in the entire year)?
So in some cases you might get some money paid back …
Bonuses are definitely taxable, but strangely overtime is not, so if you can get it reclassified then you could get it tax free.
As far as general deductions go then this actually varies from industry to industry and also is to some extent dependent on your monthly salary, 10% i believe is the norm for people teaching here in Taiwan.
Based on last years regs then the tax grades are these.
Taxable Income
0 to 370,000 x 6% - 0
370,001 to 990,000 x 13% - 25,900
990,001 to 1,980,000 x 21% - 105,100
1,980,001 to 3,720,000 x 30% - 283,300
3,720,001 to … x 40% - 655,300
These tables are based on taxable income and there are plenty of ways of legally reducing the tax burden. Having helped a few friends last May there are a lot of people who do not appear to understand or have any real idea as to what allowances they are allowed to make.
If you get the Tax office to do it all for you, then they will only give you the really basic standards.
So what kind of allowances can I claim?
So what kind of allowances can I claim?
Family. I think a kid is worth NT$36k and a wife the same. Inlaws, if they are over 60 and not working. Parents, ditto, even though you dont live with them. Rent (up to NT$120k). There are more, however they ahve not been applicable to me. The tax offices here are nicer than most.
Rascal
The list can get alittle long, but will try to keep it concise :
Standard deductions are 44K for single, 67K for married, plus an exemption of 74K per taxpayer. For each additional dependent under the age of 60 then additional 74K allowance. Proof of relationship is required, normally birth certificates. If dependent over the age of 70, then the allowance is raised to 111K, but proof that the dependent is still alive is required. For UK citizens then copies of the persons State Pension book is accepted. It must be an official document.
Special one deduction of 75K if earnings are from salaries.
Upto 270K tax free on interest earned from bank savings etc.
Ot6her expenses that maybe allowable are Medical, Insurance, Rent, Interest paid on mortgages and donations to name but a few. Losses from disasters may also qualify but the claim needs to be have been registered within 30 of the disaster happening, earthquake, flood etc.
There are others, but this is a synopsis of the main ones that normally apply to foreignors here in taiwan.
So where can I buy a kid or wife then? 
Try Tealit. They do in short-term marriages. Tax is as good reason as any.
Or, even better, get tax planning. HSCB in Taiwan does this for foreigners. Contact them. They should be able to sort you out.
I’m digging up the topic for the same problem but with the new tax rates :
for the year 2010 i should be taxed 5% (income below the 500 000 NT limit, including bonuses).
But when handing the bonus, my company already took a 6% tax on it.
so, are the bonuses really taxed at 6%, or should i still consider a 5% rate on everything I earned, then deduct what the company took from what I owe to the government ?
So how much are you willing to pay per kid. I have a few extra that I can provide. Make it a tidy sum and, hell, the wife is free.
Sorry; just sooo politacally and morally incorect. But . . . .