Performance pay is also a part of workers' salary income, which is mainly a kind of salary remuneration based on the performance of workers. According to the law of our country, performance pay is also subject to personal income tax under the condition of complying with the law.

The Notice of State Taxation Administration of The People's Republic of China on Adjusting the Method of Calculating and Collecting Individual Income Tax for Individuals Obtaining Annual One-time Bonuses (Guo Shui Fa [2005] No.9) stipulates that taxpayers obtain annual one-time bonuses, which are calculated and taxed as one month's salary and salary income separately, and are withheld and remitted by withholding agents when they issue them. Article 3 of the document clearly stipulates that "the one-time bonus for the whole year also includes the annual salary and performance salary paid by the unit that implements the annual salary system and performance salary method according to the assessment." The specific tax calculation method is:

(1) Divide the annual one-time bonus obtained by employees in the current month by 12 months, and determine the applicable tax rate and quick deduction according to their quotient.

If, in the month when the year-end one-time bonus is issued, the employee's salary income in that month is lower than the expense deduction stipulated in the tax law, the applicable tax rate and quick deduction of the annual one-time bonus shall be determined according to the above method.

(2) The annual one-time bonus obtained by individual employees in the current month shall be taxed according to the applicable tax rate and quick deduction determined in Item (1) of this article, and the calculation formula is as follows:

1. If the employee's salary income in the current month is higher than (or equal to) the expense deduction stipulated in the tax law, the applicable formula is:

Taxable amount = employee's annual one-time bonus in the current month × applicable tax rate-quick deduction.

2. If the employee's salary income in the current month is lower than the expense deduction stipulated in the tax law, the applicable formula is:

Taxable amount = (the employee gets a one-time bonus in the current month-the difference between the employee's salary income in the current month and the expense deduction) × applicable tax rate-quick deduction.

(three) in a tax year, for each taxpayer, the tax method is only allowed to be used once. Other bonuses of various names, such as semi-annual bonus, quarterly bonus, overtime bonus, advanced bonus, attendance bonus, etc., are all merged with the salary and salary income of the current month, and personal income tax is paid according to the tax law.

Not all workers have performance pay, and not all workers who get performance pay need to deduct personal income tax. Here, it is also necessary to see whether the performance pay of workers meets the prescribed tax standards. If it is not achieved, the performance salary of the laborer will not be deducted.

Performance pay is divided into generalized performance pay and narrow performance pay. Generalized performance pay is also called performance pay increase, reward pay or salary linked to evaluation. Performance-based pay system can improve job performance. If it can play a better role, employers must be sure that they can effectively evaluate job performance. The traditional performance-based pay system is usually personal performance, and the form of recognition of employee performance increase is usually to increase the basic salary within the specified time every year.

Performance pay is a salary system based on the effective assessment of employees' performance, which links wages with assessment results. Its theoretical basis is "reward by performance". Enterprises use performance pay to regulate employees, so as to stimulate employees' behavior. By adjusting the income of those with excellent performance and those with poor performance, they encourage employees to pursue behaviors that meet the requirements of enterprises, stimulate the enthusiasm of each employee, and strive to achieve enterprise goals. Generally speaking, performance salary increase is a performance reward plan that links the increase of basic salary with the evaluation grade obtained by employees in a certain performance evaluation system.

Legal basis:

Article 2 of the Individual Income Tax Law of the People's Republic of China shall pay individual income tax on the following personal income: (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.

Article 3 of the Individual Income Tax Law of the People's Republic of China

(1) For comprehensive income, an excess progressive tax rate of 3% to 45% shall apply (the tax rate table is attached);

(2) For operating income, an excess progressive tax rate of 5% to 35% shall apply (the tax rate table is attached);

(3) Income from interest, dividends and bonuses, income from property leasing, income from property transfer and accidental income shall be subject to a proportional tax rate of 20%.

"Provisions on the Composition of Total Wages" Article 4 The total wage consists of the following six parts:

(1) hourly wages;

(2) Piece rate;

(3) Bonuses;

(4) Allowances and subsidies;

(five) overtime pay;

(6) Wages paid under special circumstances.