According to the Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on the Connection of Preferential Policies after the Revision of the Individual Income Tax Law, the welfare funds paid by enterprises to employees belong to the income obtained by individuals due to their positions or employment, including wages, salaries, bonuses, year-end salary increase, labor dividends, allowances and subsidies, etc. , and shall pay personal income tax according to law. Holiday expenses are also included in the total wages of employees, and personal income tax is paid according to wages and salaries. The calculation formula of individual income tax on wages is: taxable income = pre-tax wage income-five insurances and one fund (individual contribution)-expense deduction; Taxable amount = taxable income multiplied by tax rate-quick deduction. Therefore, when calculating personal income tax, employee welfare expenses should be included in the total wages for tax treatment.

Tax treatment of employee benefits:

1. Pre-tax deduction of welfare expenses: According to the provisions of the tax law, part of welfare expenses provided by enterprises for employees can be deducted when calculating taxable income;

2. Impact of personal income tax: the benefits obtained by employees may be regarded as personal income, so personal income tax is required;

3. Types of welfare expenses and tax provisions: different kinds of employee benefits (such as catering subsidies, transportation subsidies, housing subsidies, etc.). ) There may be different tax treatment methods;

4. Tax declaration and record keeping: enterprises need to correctly fill in welfare expenses in tax declaration and keep relevant records for tax inspection;

5. Tax treatment of non-monetary benefits: if the physical benefits or services provided by the company may need to be evaluated according to the fair market value and included in the tax treatment.

To sum up, according to the relevant policies, employee welfare funds should be included in the total wages for personal income tax payment.

Legal basis:

Individual Income Tax Law of the People's Republic of China

second

The following personal income shall be subject to personal income tax:

(1) Income from wages and salaries;

(2) Income from remuneration for labor services;

(3) Income from remuneration;

(4) Income from royalties;

(5) Operating income;

(6) Income from interest, dividends and bonuses;

(7) Income from property lease;

(8) Income from property transfer;

(9) Accidental income.

Individual residents who obtain income from items 1 to 4 of the preceding paragraph (hereinafter referred to as comprehensive income) shall calculate individual income tax according to the tax year; Non-resident individuals who obtain income from items 1 to 4 of the preceding paragraph shall calculate individual income tax on a monthly or itemized basis. Taxpayers who obtain income from items 5 to 9 of the preceding paragraph shall calculate individual income tax separately in accordance with the provisions of this law.