Tax Planning, Enterprise Compensation Design

With the development of Chinese economy, the personal income increases quickly, and more and more people become tax payers for the personal income tax. According to the Law on Personal Income Tax, personal income tax for wage and bonus should be withheld by agents. To most of the personal income tax payers, salary and bonus are the main sources for tax, and the enterprises which they work for are their withholding agents. Due to lots of reasons, many enterprises only achieve the obligation to withhold the tax but neglect the tax differences between different salary designs, which lead to the result that the employees' nominal salary is high but actual salary for taxing is low. This will decrease the employees'satisfaction ratio, and then influence their enthusiasm and efficiency. This is turning against the development of the enterprise. So, how to increase the employees'actual salary under a certain salary level should be valued and cared by enterprises.Based on observation, interview and material analysis, the author has collected materials about enterprise A's basic situation, and did some survey and investigation, and finally writes this thesis in this order---description of current situation, problems analysis and suggestion. Through introducing the salary system and salary payment in 2009 of enterprise A, the author compares and analyzes the tax differences between different salary systems in terms of personal income tax design. This thesis tells people the importance of personal income tax design in economizing the amount tax and provides some feasible suggestions for salary design.There are five parts in this thesis. The first part is about the background, significance and structure of the thesis. The second part is to introduce some basic provisions of the Law on Personal Income Tax and to discourse the importance of tax arrangement for human resource management. The third part is the introduction of enterprise A's basic situation and the detailed description of its salary payment in 2009. The fourth part is the analysis of enterprise A' salary system in terms of personal income tax design, and to point out several unreasonable designs in salary system. According to lots of datas and analysis, the last part is to provide some tax arrangement schemes of salary system design.This thesis is the author's efficient exploration and attempt combining MBA's theories and enterprise's actual situation. The contribution of this thesis should be divided into four aspects. First, the theme is integrated with enterprise's actual situation. With lots of datas, comparing analysis and the discussion of specific salary systems, this thesis provides efficient and feasible tax arrangement schemes. Second, the process of the investigation and survey is strict and comprehensive. Based on sufficient datas and calculations, this thesis is very persuasive. Third, the conclusions of this thesis are practical and applicable. Although this thesis is a survey of enterprise A's salary system, the conclusions and suggestions are generally applicable. Any enterprise could chose a proper tax arrangement design according to its own situation. Fourth, the suggestions to tax arrangement design pay attention on both enterprise and employees'profits. Except for designing salary system, tax arrangement can also save expense for the enterprises. Bringing tax saving, tax arrangement is good for both enterprise and employees' development in the long run.