Bonus - calculation and deductions

Hi
I have read the previous posts about the Bonus payments but could not come across answers to the following.

1. As a new comer, is it a specified lower amount (about 50k) paid as the first bi-annual bonus payment. I will complete 9 months on the date of payment and I understand (according to the previous posts) that since I have not completed at least year, I will not be paid the full amount (i.e.: 'monthly salary' x ' XX number of months' )

2. Like the deductions done from the monthly salary, is the bonus also being subtracted from income tax,pension, health insurance, unemployment tax etc...


Thanking you in advance on this.

1) ask your boss or HR dept. rules in each company will be different
2) yes

Thank you for the information

not quite

SOME things are deducted from the bonus, but not all. At least not where I work. Health insurance, for instance, is usually divided into 12 payments, and those payments are taken out of the regular paychecks, not out of the bonuses.

Yes, you'll owe tax. You deal with national tax from the start, local taxes after you've been here for a year.

Typically any bonuses in an employee's first year are pro-rated, so you will probably get a reduced bonus... 50 to 75%, perhaps.

My employer gives me an advance copy of my situation early in the year showing my expected income, taxes to be paid, and so on. I think it may actually come from the local tax office. Ask if you can get a copy and it should answer all your questions.

Thank you Sora for the explanation

SOME things are deducted from the bonus, but not all. At least not where I work.

It depends on the company. Some also withhold social insurance premiums from bonus payments rather than distribute them onto regular salary payments.

To answer your first question, bonus is usually based on attendance during the previous year.
I don't know if it's your case, but let me put a practical example.

Let's say that you joined in October of 2017. On December 2017 was the first bonus payment, which is based on attendance during the period of Jan - Jun 2017. Your attendance rate during that period was 0% since you were not in the company yet, so you have no right to bonus, but the company still gives you 50k as a token of appreciation (this is common in some companies so as not to demotivate new hires).

Next bonus payment comes in June of this year (6 months later). It is based on attendance during the period of Jul-Dec 2017. Since you started in October, your attendance is only 50%, so your bonus will be half of the total amount.

By December of 2018, bonus will be based on attendance from Jan - Jun 2018. By then, you will have 100% attendance, so you will get a full bonus. Same for the subsequent periods.

As for your second question: No, usually taxes is the only thing that is deducted from bonuses. Pension, healthcare, etc. are deducted from your monthly paycheck.

When doing bonuses last year my accountant did the calculations. The only deduction was income tax.
However, the total income for my staff does feed into all the other deductions the following year, so it is included, just with a lag.

if you join the company's insurance and pension scheme, the deduction about bonus is income tax, and health insurance and pension fees.
if you don't join it, the deduction is income tax.
if the company hires more than 5 persons, it must join 厚生年金保険.