Hello everyone, I am a foreigner working in Taiwan.
According to the tax brackets:
590,001 - 1,330,000 12%
1,330,001 - 2,660,000 20%
If I earn 111,000 per month I would pay 12%
If I earn 112,000 per month I would pay 20%
Would it be better to ask my boss to keep my salary at 111,000 so I stay in the 12% tax bracket?
No.
You take advantage of deductions, so you need to find out what deductions can work. Some could include charity work, or whatever.
Asking your boss to under report will get him in trouble.
Why is this so commonly misunderstood?
I guess it is commonly misunderstood because we never got taught this in school 
I think I get it now.
0 - 590,000 5%
590,001 - 1,330,000 12%
1,330,001 - 2,660,000 20%
Money earned in each bracket has its own tax amount.
The money earned over 1330000 would then be taxed at 20%.
I thought it was your total salary being taxed at one rate.
Thank you!
Exactly!
So for a monthly income of 112,000 (yearly: 1,344,000), the calculation would be as follows:
590,000 * 5% + 740,000 * 12% + 14,000 * 20% = 121,100
The authorities in Taiwan make it even easier to calculate by showing the āprogressive differenceā in the table (i.e. the amount you have to subtract from the total tax due to the progressiveness of the tax rate):
So:
1,344,000 * 20% [tax rate] - 147,700 [progressive difference] = 121,100 [taxes owed]
Arenāt a portion of your pay already withheld? So filing just means you get a refund.
And yes take advantage of any deductions if you can.
If you are a regular employee, your employer will withhold a part of your salary every month. The withholding is usually just an estimate - so only when the total income of the year is known, one can exactly calculate their tax liability. The difference between the withholding and the actual liability results in either a refund or a back pay (though usually, governments try to set the withholding in a way that it will result in a refund at the end of the year causing taxpayers to give them an interest-free loan basically).
Some deductions in Taiwan are also very easy to get (you donāt really need to do anything to get them - no need to keep receipts or anything):
First, there is the āSpecial deduction for Salary or Wagesā (218,000). Then, there are exemptions for each dependant (at least 131,000 for a single person). Then, there is the standard deduction (131,000).
If you have deductible expenses larger than the standard deduction (many taxpayers probably wonātā¦), then those deductions will replace the standard deduction. But of course, the tax office might ask for receipts thenā¦
If factoring in all the deductions on a salary of 1,344,000 per year, the tax payable will be 66,460. So roughly half of the tax liability without factoring in the deductions!
Quick Calculation of Alien Individual Income Tax for Year 2024
