Employee welfare expenses can be deducted before tax in proportion. The employee welfare expenses incurred by the enterprise shall be deducted if they do not exceed 14% of the total wages and salaries.

According to Article 34 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC), reasonable wages and salaries incurred by enterprises are allowed to be deducted. The wages and salaries mentioned in the preceding paragraph refer to all cash or non-cash labor remuneration paid by an enterprise to its employees in each tax year, including basic wages, bonuses, allowances, subsidies, year-end salary increase, overtime pay and other expenses related to the employment or employment of employees.

Extended data:

The institutions and places mentioned in the third paragraph of Article 2 of the Enterprise Income Tax Law refer to the institutions and places engaged in production and business activities in China, including:

(a) management institutions, business institutions and offices;

(2) Factories, farms and places for exploiting natural resources;

(3) places where labor services are provided;

(four) places engaged in construction, installation, assembly, repair, exploration and other engineering operations;

(five) other institutions and places engaged in production and business activities.

Non-resident enterprises entrust business agents to engage in production and business activities in China, including units or individuals who often sign contracts on their behalf, or store and deliver goods. A business agent shall be regarded as an institution or place established by a non-resident enterprise in China.

References:

Baidu Encyclopedia-Regulations for the Implementation of People's Republic of China (PRC) Enterprise Income Tax Law