According to the Individual Income Tax Law of People's Republic of China (PRC) and the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Relevant Issues Concerning Individual Income Tax on Enterprise Annuities and Occupational Annuities (Cai Shui [20 13] 103No.), the personal income tax deduction standards for enterprise annuities are as follows:
1. Individual contribution of enterprise annuity: the deduction limit is 5% of the total salary and salary of the individual in the current period. That is to say, the part paid by individuals in enterprise annuity can be deducted from pre-tax income when calculating personal income tax, and the maximum amount does not exceed 5% of total wages and salaries.
2. The payment part of the enterprise annuity unit: 5% of the total salary of the individual in the current period is taken as the deduction limit. The part of enterprise annuity paid by enterprises for employees can be deducted from pre-tax income when calculating personal income tax, and the maximum amount is not more than 5% of total wages and salaries.
It should be noted that the personal income tax deduction standard for enterprise annuity is applicable to individuals employed in China, including China employees and foreign employees. At the same time, the personal income tax deduction standard of enterprise annuity only applies to enterprise annuity, not to other forms of pension plan.
As the second pillar of China's old-age insurance system, enterprise annuity plays an important role in improving the living standards of employees after retirement. Reasonable use of personal income tax deduction standard for enterprise annuity can reduce the tax burden of employees to a certain extent and improve the enthusiasm of employees to participate in enterprise annuity plan.