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Table 8 Employer and Employee average payroll tax rates for retirement and health insurance, Xiamen City, 2010

From: Do employers prefer migrant workers? Evidence from a Chinese job board

  Employer Taxes Only Employer Plus Worker Taxes
  (1) (2) (3) (4) (5) (6) (7) (8)
Monthly wage (yuan) LH Workers’ tax rate NLH Workers’ tax rate NLH tax rate advantage [(1) - (2)] NLH tax Advantage (yuan) LH Workers’ tax rate NLH Workers’ tax rate NLH tax rate advantage [(1) - (2)] NLH tax Advantage (yuan)
1500 .26 .07 .19 285 .38 .14 .24 360
2000 .21 .05 .16 320 .31 .11 .20 400
2300a .21 .05 .16 368 .31 .09 .22 506
3000 .21 .04 .17 510 .31 .07 .24 720
4000 .21 .03 .18 720 .31 .05 .26 1040
5000 .21 .02 .19 950 .31 .04 .27 1350
  1. Source: Xiamen Local Taxation Bureau 2010
  2. ais the approximate mean wage in XMRC analysis sample. 98 percent of offered and current wages in our data are between 1000 and 5000 yuan/month. Tax basis: For retirement insurance, tax rates are applied to the worker’s actual salary for LH workers, but to a fixed amount of 900 yuan per month for NLH workers. For medical insurance, tax rates are applied to the worker’s actual salary (with a minimum of 1823 yuan/month) for LH workers, but to a fixed amount of 1823 yuan/month for NLH workers. Both tax bases for LH workers are capped at three times the city average salary: 9114 yuan/month. Tax rates: For retirement insurance, LH workers and their employers pay 8% and 14% of the basis respectively. NLH workers and their employers each contribute 8 percent of their basis respectively. For medical insurance, LH workers and their employers contribute 2% and 7% of the basis respectively. NLH workers and their employers each contribute 2% of the basis