I. Nature of travel allowance

Travel allowance is usually an economic allowance provided by the company to ensure the basic needs of employees when traveling, including transportation, accommodation, catering and so on. The purpose of this subsidy is to ensure that employees can work normally and maintain a basic standard of living during business trips.

Second, the provisions of the tax law on travel subsidies

According to "Individual Income Tax Law of People's Republic of China (PRC)" and its implementing regulations, whether it is necessary to pay individual income tax for business travel subsidies mainly depends on whether the subsidies belong to employees' wage income. If the travel allowance is regarded as a part of salary income, then personal income tax should be paid according to the tax law.

However, the tax law also provides some exceptions. For example, the travel allowance is used to pay the reasonable expenses of employees during their business trips, and the company can provide sufficient supporting documents, so this part of the allowance may not need to pay personal income tax.

Third, matters needing attention in actual operation

In practice, the company needs to ensure that the payment of travel allowance complies with the provisions of the tax law and keep relevant supporting documents. At the same time, employees also need to understand the tax treatment of travel subsidies to avoid unnecessary tax risks caused by misunderstanding.

In addition, the company should formulate a clear internal policy on the payment standard and scope of travel allowance, and explain it in the employee handbook or related documents to ensure that employees can clearly understand their rights and obligations.

To sum up:

Whether the travel subsidy needs to pay personal income tax depends on the nature of the subsidy and the specific tax law. If the travel allowance belongs to the company's normal welfare expenditure for employees and meets the conditions stipulated in the relevant tax laws, then personal income tax is usually not required. However, in practice, both companies and employees need to understand and abide by the provisions of the tax law to ensure that the distribution of travel subsidies and tax treatment meet the legal requirements.

Legal basis:

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

Article 4 provides that:

The following items of personal income shall be exempted from personal income tax: …… (8) Other tax-free income stipulated by the State Council.

individual income tax law of the people's republic of china rules for its implementation

Article 10 stipulates:

The specific scope of tax-free income stipulated in Item 8, Paragraph 1, Article 4 of the Individual Income Tax Law shall be stipulated by the financial department of the State Council.