What is "tax rate jump"?
Individual tax collection is changed from monthly withholding to cumulative withholding. The characteristic of this calculation method is that the annual tax deduction is low before and then high, and with the increase of accumulated taxable income, there will be a "tax rate jump".
At present, in China, after deducting tax-free income, expenses, special additional deductions, special additional deductions and other deductions determined according to law, residents' taxable income is taxed at an excessive progressive tax rate of 7 levels. The excess taxable income is taxed separately according to the corresponding tax rate, which is the so-called "tax rate jump".
If the accumulated taxable income in a tax year does not exceed 36,000 yuan, the withholding rate will be maintained at 3%. When the accumulated taxable income exceeds 36,000 yuan and does not exceed 6,543.8+0.44 million yuan, the withholding rate jumps from 3% to 654.38+00%. This means that when the taxable income at the beginning of the year is low, a lower withholding rate will be applied, and with the increase of the accumulated amount, there will be the possibility of skipping files.
What are the advantages?
Reduce the tax burden, "get rich" at the beginning of the year, and don't have to make up the tax refund.
Cumulative withholding method allows taxpayers to enjoy a lower withholding tax rate in the first few months, which can obtain abundant cash flow. Judging from the time value of money, it is actually beneficial to taxpayers.
At the same time, for low-and middle-income groups with large monthly income fluctuations and insufficient tax exemption in some months, the new tax calculation method can reduce the tax burden to some extent.
In addition, the withholding tax will converge to the final settlement tax at the end of the year, so as to minimize the occurrence of tax refund and thus reduce the tax cost of both parties.
The Regulations for the Implementation of the Individual Income Tax Law of the People's Republic of China stipulates that taxpayers who have obtained comprehensive income shall make final settlement if the prepaid tax amount is lower than the taxable amount in the tax year. Under the cumulative withholding method, if the taxpayer only obtains wages and salaries in one unit, no matter how much salary he receives, the withholding tax is the same as the final settlement, and there is no need to apply for tax payment or tax refund in the following year, which reduces the processing links of both parties.
The total tax payment for the whole year remained unchanged or even decreased.
Paying more taxes in January than in January, is it an increase throughout the year? In fact, compared with monthly withholding, the total tax payment for the whole year (the same year) has not changed.
However, due to the influence of "starting point", tax rate adjustment and special additional deduction, the tax reduction effect of personal income tax reform is obvious.
Hong Hao is not the only employee who has benefited from the tax reform. Judging from the data of the first three quarters released by State Taxation Administration of The People's Republic of China,
The improvement of residents' consumption power has stimulated the growth of social consumption. In the first three quarters, the personal income tax reform increased the tax reduction by 442.6 billion yuan, and the cumulative per capita tax reduction was 1764 yuan. The reduction of personal income tax directly increases the income of residents and improves their spending power.
Cai, executive deputy director of State Taxation Administration of The People's Republic of China Tax Reduction Office, said that this directly increased employees' income and enhanced their sense of gain.