The State Administration of Taxation issued on August 17 the "Notice of the State Administration of Taxation on Clarifying Certain Policy Execution Issues Concerning Individual Income Tax," clarifying certain policy execution issues concerning individual income tax. The first article of the "Administrative Reply of the State Administration of Taxation on Certain Individual Income Tax Policy Issues" (Guo Shui Han [2002] No. 629) concerning the "double salary system" tax calculation method has ceased to be enforced.
The "double salary system" tax calculation method refers to the practice where state organs, public institutions, enterprises, and other units, after implementing the "double salary system" (according to relevant state regulations, units pay their employees an additional month's salary), the "double salary" received by individuals as a result is separately counted as one month's wage and salary income for individual income tax purposes.
After ceasing the "double salary system" tax calculation method, units may consolidate the additional month's salary into the current month's salary for tax calculation, or include it in the "annual one-time bonus." The "annual one-time bonus" refers to dividing it by 12 months in the month when the annual one-time bonus is paid, and determining the applicable tax rate and quick deduction based on the quotient.

Case illustration:
Suppose Wang's monthly salary is 3,000 yuan, and the company pays him a double salary of 3,000 yuan for that month.

Under the old "double salary" tax calculation method:
Salary: 3,000 yuan, minus the 2,000 yuan threshold, leaves 1,000 yuan, the applicable nine-level progressive tax rate is 10%, and the quick deduction is 25. The specific calculation is: (3,000-2,000)*10%-25=75 yuan
Double salary: 3,000 yuan, the applicable nine-level progressive tax rate is 15%, and the quick deduction is 125. The specific calculation: 3,000*15%-125=325 yuan
Therefore, Wang's individual income tax for that month is: 75+325=400 yuan

Under the new method, consolidated into the current month's salary for tax calculation:
Income: 6,000 yuan, minus the 2,000 yuan threshold, leaves 4,000 yuan, the applicable nine-level progressive tax rate is 15%, and the quick deduction is 125. The specific calculation is: 4,000*15%-125=475 yuan

Under the new method, calculated by spreading the "annual one-time bonus":
First, find the applicable tax rate based on the quotient of 3,000 divided by 12 (3,000÷12=250 yuan). The tax rate corresponding to 250 yuan is 5%, so the individual income tax payable is calculated as follows: 3,000×5%=150 (yuan). Wang's individual income tax for the year-end double salary is 150 yuan, the tax on the current month's salary is (3,000-2,000)*10%-25=75 yuan, and the total tax payable for the month is 150+75=225 yuan.

The tax calculation method established in 2005, which spreads the annual one-time bonus over 12 months to determine the applicable tax rate, already treats year-end bonuses as a form of annual one-time bonus for tax calculation. Therefore, this cancellation of the original "double salary system" tax calculation method merely cleans up old policies. Individual year-end bonuses shall still be calculated according to the spreading tax method introduced in 2005, and there is no change to the individual tax burden (see the example above for details). Specifically, for taxpayers with only year-end bonuses (double salary) and no annual one-time bonus, the year-end bonus (double salary) shall be calculated according to the 2005 spreading method for annual one-time bonuses; for taxpayers with both year-end bonuses (double salary) and annual one-time bonuses, the two incomes shall be combined and the spreading tax method for annual one-time bonuses shall apply. Recently, some high-income enterprises have been calculating and withholding individual income tax separately for year-end bonuses (double salary) and annual one-time bonuses, which violates the 2005 policy on annual one-time bonuses. This clarification to cancel the original "double salary system" tax calculation method is to meet the requirement of regularly cleaning up outdated or obsolete documents, and also considers standardizing the tax system, ensuring fair tax burden, and regulating high income from the perspective of addressing the aforementioned violations. It will not increase the burden on ordinary wage earners.