Research Of Compensation Tax Planning For Enterprise Staff

The compensation management is related to the income and welfare of the staff and the cost of an enterprise directly.Tax planning is helpful for the staff to decrease individual income tax in compensation management,which can maximize the net income for every staff.According to The Law of Individual Income Tax in China,the thesis analyzes the fundamentals of tax planning about compensation.As it is known to us,the compensation is separated into taxable and tax-free income according to the Law mentioned above.The study of the law concludes that there are two methods for tax planning.The first one is to cut the taxable income,including three aspects:the first is to itemize separately tax-free income and the income permitted not to charge to taxable income,the second is to separate the non-monetary welfare from the total income,the last one is to take good advantage of tax deductible;the other is to lower the tax rate,containing three aspects too:the first is to balance the compensation each month,the second is to utilize the tax policy about one-time annual bonus adequately,the final one is to transform the income form between monthly salary and service remuneration.This thesis focuses on the general income—monthly salary and annual bonus,taking R company for instance.After a deep research of some models are designed as follow: the optimal monthly salary,the best combination of monthly salary and annual bonus,applying to determine and adjust the monthly salary,and how to distribute the total income between monthly salary and annual bonus.The models are helpful for the HR department and Financial department in compensation management in every enterprise.