If a resident has obtained income from wages and salaries for the first time within a tax year, the withholding agent can adopt the ‘cumulative withholding method’ to calculate the cumulative tax amount to be withheld based on the monthly deduction of RMB 5,000 from the beginning of the tax year.
For example, if a fresh graduate joins a company in July this year, the employer can deduct RMB 35,000 [RMB 5,000 x 7 months] from the employee’s accumulative salaries since July when calculating the IIT that should be withheld and paid in advance in the current period.