From a practical standpoint, there are essentially six modes for businesses to reimburse personal expenses:

Mode 1: The business deducts at least 5,000 yuan per month as salary expenses, not exceeding 5,000 yuan per month, which basically does not require tax payment. However, the issue is that this only applies to full-time workers. In reality, some businesses, in an effort to reduce tax payments, also declare part-time workers in this manner. It may seem that no tax is required temporarily, but when it comes to the annual final settlement, individuals still face tax obligations. As previously analyzed, in the final settlement of personal income tax, wages are taxed more than labor remuneration.

Conclusion: Unless there is a genuine labor contract between the business and the individual, this method should not be adopted.

For employees with a contractual relationship, when wages and bonuses are particularly high, some businesses often use other methods to reimburse personal expenses to reduce personal income tax.

Mode 2: Reimbursement is accounted for as labor fees, with value-added tax (VAT) invoices issued at the tax bureau or online. The invoices are used for accounting purposes, and personal income tax is withheld and paid on behalf of the recipient. This is the most compliant approach. However, relatively speaking, the tax burden is higher, with withholding tax generally above 16%. Additionally, there is a 3% VAT. When natural persons issue invoices, they cannot issue special invoices without tax registration, and businesses cannot deduct these.

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In this mode, financial and tax management is more formal in units (especially state-owned units) that operate in this manner.

Mode 3: Individuals providing services establish sole proprietorships, personal独资 enterprises, or partnerships, and then issue invoices. The payer accounts for the payment based on the invoice, with no obligation to withhold and pay taxes on behalf of the recipient. The recipient is not a company and does not need to pay corporate income tax; they only need to pay personal income tax on business income. To alleviate the tax burden, these sole proprietorships or individuals are often set up in areas where tax collection can be assessed.

Conclusion: This mode is a commonly used tax planning method in the market currently. It transforms the labor relationship (or employment relationship) between businesses and individuals into a business cooperation relationship, and converts labor remuneration (or wages) into business revenue, thereby reducing the tax burden through assessed collection.For businesses and individuals, does this method pose any tax risks? Is it compliant? The specific situation needs to be analyzed on a case-by-case basis. For newly established companies, a financial planner with ten years of experience has specifically written an e-book titled "Business Operation Guide" to address business risks. You can send me "520" to receive it, and of course, if you have any questions, you can also discuss them in the comments section.

Fourth model: Company issues invoices. Similar to the third model mentioned above, but the individual establishes a company, which signs a contract with the payer and issues an invoice. The payer can account for the payment based on the invoice. In this way, the invoice-issuing company will incur corporate income tax.

At the same time, if the invoice-issuing company wants to give money to an individual, it also faces the issue of how the company (business) can pay fees to an individual. Conclusion: This model is generally not widely used. If an individual frequently has a large amount of business, they can first receive the money under the company's name and then handle it.

Fifth model: Third-party platforms. Since many businesses need to pay fees to individuals, especially labor cost businesses such as courier companies, logistics enterprises, live streaming platforms, medical marketing, etc., through labor remuneration or wages, the tax cost is relatively high. To meet this demand, a large number of third-party platforms have emerged, whose basic principle is the third model mentioned above, utilizing the policy support of local tax depression.

Of course, in actual operation, there will be some different arrangements and practices depending on the specific situation of the enterprise.

Conclusion: The comprehensive cost of taxes, fees, etc., in this model is much lower than the tax burden of labor fees or wages. In terms of risk, if there is a real employment scenario, there is no risk of violent false invoices.

For businesses with relatively high labor costs, they can combine their own business model to evaluate the corresponding risks and benefits and take relevant plans.

Sixth model: Paying fees to individuals through personal private bank cards or cash, without accurately reflecting the expenses in the company's account. So, where does the money paid come from? Some are cashed out through invoices, some are income, and some are from the company's petty cash. These practices do not comply with financial and tax regulations, and if they involve false invoices, they also face significant tax risks.Conclusion: It is recommended that enterprises assess the relevant risks and correct obvious illegal and non-compliant behaviors.

The above has introduced various modes of enterprises making payments to individuals, and compared the corresponding accounting methods, risks, and tax burdens.

For enterprises, in the process of operation, it is necessary to comprehensively consider factors such as the nature of the enterprise (state-owned, private, or foreign-funded), shareholders, whether the enterprise needs to go public for financing, the size of the enterprise, the stage of development, and the transaction counterparts. It is best to weigh the pros and cons and have the scheme designed by senior professionals in finance, taxation, and law to suit the enterprise.