New Zealand Embassy Beijing, China

Salary and Tax Status

Chinese law (State Administration of Foreign Exchange Bureau [SAFE]) specifies that Renminbi (RMB) is the legal currency that people working in China can be paid in. Many contracts say they will pay in US$ and/or offshore. But schools then point to the SAFE regulation as a means of evading this commitment. However, if a school is approved to employ foreign teachers and has SAFE approval, then it can pay in US$. Many schools do not have this approval and even those that do often find it “too hard” to apply. As RMB is not readily convertible this can create difficulties for foreign employees. If you are working on a “Z” visa for a school with SAFE approval, then you should be able to negotiate payment in US$.

Payment of Chinese Taxes

Another common concern is tax liability. The employer is supposed to pay income tax - in the form of Pay As You Earn (PAYE) - and every three months give the tax certificate to the employee. It has been reported that some employers claim to have paid the employee’s tax, when in fact while the tax has been deducted from the employee’s salary it is pocketed by the employer.

Without a tax certificate the employee:

  • cannot remit money home: banks cannot remit more than US$500 per month without showing the Peoples’ Bank of China (PBOC) evidence that tax has been paid on that income, the evidence being the tax certificate.
  • may face difficulties leaving China: Before leaving China, those foreigners on an employment visa may be asked to produce a tax certificate if the records show that no tax has been paid. And those travelers on a tourist visa who have been in China longer than 90 days may be asked to show how they paid for their holiday.

If you believe your employer is not complying with the Chinese tax laws, and is illegally withholding income tax from your salary, your first step should be to discuss the matter with them. If that does not work, you should approach the PSB. Should the problem remain unresolved, then you may wish to consider legal advice. Bear in mind that working without the appropriate visa will reduce significantly the possibility of a successful outcome.

New Zealand Income Taxes

Depending on the length of your stay in China, you may be liable for payment of New Zealand income tax on any income earned. You are encouraged to contact the New Zealand Inland Revenue Department before departure to determine your residency status for New Zealand income tax.

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