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Salary deductions

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Salary deductions

Postby meldrew » 25 Jun 2016, 19:14

Hi, I wonder if anyone could give me some basic information regarding deductions from our salary. I hope to work in Taiwan pretty soon but I need to make sure the finances work.

I have heard of the 183 day rule of 18% tax and from then it should drop to somewhere between 6-12%. Does this happen every year? Presuming I stay the full year, do I get a rebate for those 183 days? If so, when would the rebate arrive?

Does the housing allowance get taxed?

What other deductions should I expect?

I'm expecting to get about 75k a month including a 10k housing allowance.

Thanks in advance.
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Re: Salary deductions

Postby ilikecoffee » 26 Jun 2016, 01:24

Deductions are possible. Medical costs; Educational Costs, Rent, life insurance (upto a max), mortgage interest, ... there are a few more... Also, there will be deductions for Labor, NIH, and pension ... all of which are mandatory.

Taxes here are fairly simple compared to systems in the West. Rates are reasonable, and there are thresholds to apply, ... but the system generally favors those with more deductibles (ie. families). There is even a downloadable that will help you calculate and file your taxes. For most single people, the taxes are simplish... Good luck!
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Re: Salary deductions

Postby the bear » 26 Jun 2016, 12:57

meldrew wrote:Hi, I wonder if anyone could give me some basic information regarding deductions from our salary. I hope to work in Taiwan pretty soon but I need to make sure the finances work.

I have heard of the 183 day rule of 18% tax and from then it should drop to somewhere between 6-12%. Does this happen every year? Presuming I stay the full year, do I get a rebate for those 183 days? If so, when would the rebate arrive?

Does the housing allowance get taxed?

What other deductions should I expect?

I'm expecting to get about 75k a month including a 10k housing allowance.

Thanks in advance.


You'll be taxed at 18% for half the year and then 6%. You'll get the 12% difference back on August 1 of the next year, maybe a little more.
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Re: Salary deductions

Postby afterspivak » 27 Jun 2016, 07:17

What the others have said.

If you have official rent receipts, keep them. At least at the Taipei City tax office, you'll need them to claim rent as an expense.

Guy
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Re: Salary deductions

Postby afterspivak » 27 Jun 2016, 07:23

Just to make sure this is clear: in any calendar year (2016, 2017, etc), if you are not physically in Taiwan for 183 days, you will be taxed at a flat rate of 18% of your income--no deductions possible. So if you are thinking of a one-year contract beginning, say, August 1, you won't be able to avoid this situation in 2016--and in 2017 you'll need to count your days to ensure you reach the 183 days. With a progressive rate and possible deductions, it will make a big difference.

Hope this helps!

Guy
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Re: Salary deductions

Postby the bear » 27 Jun 2016, 12:42

afterspivak wrote:What the others have said.

If you have official rent receipts, keep them. At least at the Taipei City tax office, you'll need them to claim rent as an expense.

Guy


I did it just with my rent contract.
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Re: Salary deductions

Postby Icon » 27 Jun 2016, 13:09

If you are single, you can put your parents as deductibles -they assume here we are filial and help them. So you need some document saying you came from them and hence you will have two dependents to add as deductables!
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Re: Salary deductions

Postby SuperS54 » 27 Jun 2016, 16:24

Icon wrote:If you are single, you can put your parents as deductibles -they assume here we are filial and help them. So you need some document saying you came from them and hence you will have two dependents to add as deductables!


You don't have to be single, if you're married you can have four dependents! Brother or sister in education or not able to work? Bang, more dependents!
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Re: Salary deductions

Postby headhonchoII » 27 Jun 2016, 16:31

Yes deductibles are very generous on four parents (pensioner age) and dependents!
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Re: Salary deductions

Postby meldrew » 15 Jul 2016, 12:57

Thanks a lot guys!

There's a lot of great information here. I'm looking at, presuming I like it, to make TW my home for the forseeable future, atleast for the next 5 years so coming mid year or after and not getting the tax rebate... is not a massive issue. I just basically need to know in advance.

I have a few questions based on what's been said here:

What would be the benefit of claiming rent as an expense?

What would be the benefit of adding my parents as dependents for deductibles and how would I actually do this? As it is, my parents are pensioner age and I do financially help them out every month (They really helped me through university and so it's only fair now).

What kind of document is needed to prove my parents are dependent on me?

Thanks a million!
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