Tax Withholding of Year-End Bonus

According to Standards of Withholding Rates for Various Incomes, whether withheld in accordance with rate table or directly at a rate of 6%, tax withholding shall be calculated based on total payment of each month.

According to Explanatory Decree No. 09704525530 by the MOF on May 16, 2008, remuneration including cash award, allowance and subsidy and part-time income must be withheld at the rate of 6% at the payment. Year-end bonuses are paid to employee especially for achievement recognition and Spring Festival, which are not remuneration paid monthly. Year-end bonuses shall not be calculated in total payment of each month and shall be withheld at the rate of 6%.