Saturday, November 22, 2008

Pnyin - Average Salary for Expats in China. - Page 3 -








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Average Salary for Expats in China.
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View Poll Results: Expats working in China, what is your monthly salary in RMB?
< RMB 5,000 2 7.41%
RMB 5,000 - 9,999 11 40.74%
RMB 10,000 - 19,999 5 18.52%
RMB 20,000 - 29,999 3 11.11%
RMB 30,000 - 39,999 0 0%
RMB 40,000 - 49,999 1 3.70%
>= RMB 50,000 5 18.52%
Voters: 27. You may not vote on this poll



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cdn_in_bj -

Glad I could help.



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Springbokke -

This may be a dumb question but when it comes to identifying the correct applicable tax bracket
does one use the pre-deduction salary figure, or the post-deduction figure?

Example

On a RMB30,000 monthly salary;

1. Pre-deduction calculaton - with quick calculation this puts the total at 30,000 - 4800 = 25,200
which is taxed at 25%, after other deductions of say 10,000 you are taxed 25% on the taxable
amount of 15,200 which is 3800, minus 1375 = final tax amount of RMB2,475.

2. Post-deduction calculation - deduct both initial amount of 4,800 and the 10,000 to get a
taxable amount of 15,200 which falls into the 20% category. Taxed at 20%, this leaves you with
3,040 - 375 = final tax amount of RMB2,665...

Am I going crazy here - you pay higher tax in a lower bracket??










cdn_in_bj -



Quote:

This may be a dumb question but when it comes to identifying the correct applicable tax bracket
does one use the pre-deduction salary figure, or the post-deduction figure?

You use the tax bracket after all deductions.



Quote:

On a RMB30,000 monthly salary;

1. Pre-deduction calculaton - with quick calculation this puts the total at 30,000 - 4800 = 25,200
which is taxed at 25%, after other deductions of say 10,000 you are taxed 25% on the taxable
amount of 15,200 which is 3800, minus 1375 = final tax amount of RMB2,475.

The thing that is messing you up here is the quick deduction. Calculating the tax manually in this
scenario (without using the quick deduction) would give:

2. Post-deduction calculation - deduct both initial amount of 4,800 and the 10,000 to get a
taxable amount of 15,200 which falls into the 20% category. Taxed at 20%, this leaves you with
3,040 - 375 = final tax amount of RMB2,665...

Am I going crazy here - you pay higher tax in a lower bracket??

The reason the tax appears to be lower in the first scenario is because of the quick deduction of
1375, which is supposed to compensate for the lower tax rates in the lower brackets (up to 20000).
But since you're using the pre-deduction amount to determine the tax brackets, and using the
post-deduction amount to calculate the tax, it no longer works. Put another way, without using the
quick deduction how would you determine the tax paid in the lower tax brackets? You can't, as by
assigning 15200 into the 25% bracket you've skewed the tax scale. Anyways, the first scenario
bogus - don't worry about it. The second calculation is correct.










MartinF -

One thing I've found in my time in Beijing is that you will get more money working for an
international corporation, especially if they had to recruit you from the USA.

So I made 2 mistakes which cause my salary to be quite low for a skilled ex-pat:

1) I was already in Beijing and just needed a job with a visa.
2) I am working for a Chinese company.

So despite my qualifications and experience (17 years in top US companies in my field) I get paid
only 1/3 of what I'd get in the states for the same hours. I get no benefits. However, the cost of
living, especially rent, is probably 1/3 of LA where I lived before. So maybe it's a wash.

So my goal is to find a job in Beijing with an international or multi-national corp and get the
ex-pat package which I don't currently get. For example:

1) similar salary to the USA
2) apartment paid for
3) travel allowance (taxis, airfares)
4) food allowance
5) "entertainment" allowance

It certainly should be possible, so I'm on the look out. Your situation is considerably different
and the advice given is very sound. Good luck.










cdn_in_bj -



Quote:

One thing I've found in my time in Beijing is that you will get more money working for an
international corporation, especially if they had to recruit you from the USA.

That's pretty much the case, especially to the last part.



Quote:

So I made 2 mistakes which cause my salary to be quite low for a skilled ex-pat:

1) I was already in Beijing and just needed a job with a visa.

I don't necessarily agree that what you did was a "mistake", in fact I think it would've been much
harder for you to find a job overseas with a company that would send you here right away as a new
recruit. Unless you could've found job postings that were specifically for China postings. Of
course, such postings might be easier to find for certain industries.



Quote:

2) I am working for a Chinese company.

So despite my qualifications and experience (17 years in top US companies in my field) I get paid
only 1/3 of what I'd get in the states for the same hours. I get no benefits. However, the cost of
living, especially rent, is probably 1/3 of LA where I lived before. So maybe it's a wash.

IMHO, getting a "local job" that relates to your area of expertise is nothing to be disappointed
about. If anything it probably has given you more time to "ramp up" to living here and experience
the local working culture. Even though you have not achieved your goals relating to compensation,
I bet you've gotten to meet some good industry contacts. And from your other posts, it seems at
the very least you've had time to enjoy the nightlife here.



Quote:

So my goal is to find a job in Beijing with an international or multi-national corp and get the
ex-pat package which I don't currently get.

I think this is more realistic.

For example:

1) similar salary to the USA
2) apartment paid for
3) travel allowance (taxis, airfares)
4) food allowance
5) "entertainment" allowance

MNC should not be a problem, but I'm not sure about the "ex-pat package" unless you're going for a
senior management position. That is not to say that you shouldn't try, however. And if you are
qualified for such a position, then you can scratch what I just wrote. Anyways, good luck and keep
us posted!










Springbokke -

Thanks cdn - that clears things up.

Now to minimize the tax burden......












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