The International Schools Review Forum

Hello everyone,
I'm wondering if there are schools in SHANGHAI, China that will subsidize 2 kids tuition if only 1 person works at the school? (I know many schools would only subsidize 2 kids' tuition if it's a teaching couple.) Any information on this topic is appreciated!

Thank you!

Yes, schools will do what is best for the school. However, everything else being equal two school age dependents will just put you behind other applicants.

Changing Chinese tax laws might make those tuitions taxable, which would be a killer...

Look at WISS. Things might be different but back in the day they had some staff with more dependents than that.

The Boots school will take up to three, while the Boring Witch and the Hilltop school will take two.

Of course, that will change because of the tax rules from next year.

expatscot wrote:
> The Boots school will take up to three, while the Boring Witch and the
> Hilltop school will take two.
>
> Of course, that will change because of the tax rules from next year.

Why would that change?
The tax needs to be paid by the teacher, so the schools can keep offering the same number of tuition-free spots.
Of course people with three or two kids might not be as interested in China anymore...

Because those waivers will be taxable as compensation AND ISs will not be able to discount the value of those waivers based on incremental cost or some other formula to get around it. Chinese ISs even lower tier ones charge really high fees/tuition making the applicable tax unattractive and prohibitive. Some ISs (mainly first/elite tier)will continue to absorb the tax as part of the ITs compensation, but then that increases the ITs taxable compensation as well (now the tax benefit on those fee/tuition waivers is taxable in of itself), and its kind of a vicious cycle. Its just going to make China unattractive to ITs with school age dependents.

PsyGuy wrote:
> Because those waivers will be taxable as compensation AND ISs will not be
> able to discount the value of those waivers based on incremental cost or
> some other formula to get around it. Chinese ISs even lower tier ones
> charge really high fees/tuition making the applicable tax unattractive and
> prohibitive. Some ISs (mainly first/elite tier)will continue to absorb the
> tax as part of the ITs compensation, but then that increases the ITs
> taxable compensation as well (now the tax benefit on those fee/tuition
> waivers is taxable in of itself), and its kind of a vicious cycle. Its just
> going to make China unattractive to ITs with school age dependents.

Yes, that makes it unattractive for teachers, but what I was asking was why it would change that schools offer a certain number of spots to teacher's children, since the tax burden is for the teacher to pay and not for the school.
The second part of your first sentence is a bit unclear, so perhaps that is where you tried to explain it.

Heliotrope wrote:
> PsyGuy wrote:
> > Because those waivers will be taxable as compensation AND ISs will not be
> > able to discount the value of those waivers based on incremental cost or
> > some other formula to get around it. Chinese ISs even lower tier ones
> > charge really high fees/tuition making the applicable tax unattractive and
> > prohibitive. Some ISs (mainly first/elite tier)will continue to absorb the
> > tax as part of the ITs compensation, but then that increases the ITs
> > taxable compensation as well (now the tax benefit on those fee/tuition
> > waivers is taxable in of itself), and its kind of a vicious cycle. Its just
> > going to make China unattractive to ITs with school age dependents.
>
> Yes, that makes it unattractive for teachers, but what I was asking was why it would
> change that schools offer a certain number of spots to teacher's children, since the
> tax burden is for the teacher to pay and not for the school.
> The second part of your first sentence is a bit unclear, so perhaps that is where you
> tried to explain it.

Because the tax burden is so high - it effectively adds another £30,000 - £40,000 to your income to be taxed - that the likelihood is most teachers with kids simply won't be able to afford it. This produces an additional tax levy for the teacher of around £6000 - £7000 per child, per year, without a corresponding increase in their take-home salary. So for three kids, that could mean finding up to £21,000 per year from your income - that's around 1/3 to 1/2 a teacher's income, ruling out China as a realistic option for single parent teachers and making it incredibly difficult for teaching couples.

As a result, schools simply won't offer this if they know it could result in people withdrawing from jobs once they realise the total cost. It's just easier to not have this than try to explain or mitigate it fairly, taking into account those teachers who don't have kids.

expatscot wrote:
> Heliotrope wrote:
> Because the tax burden is so high - it effectively adds another £30,000 - £40,000 to
> your income to be taxed - that the likelihood is most teachers with kids simply won't
> be able to afford it. This produces an additional tax levy for the teacher of around
> £6000 - £7000 per child, per year, without a corresponding increase in their
> take-home salary. So for three kids, that could mean finding up to £21,000 per year
> from your income - that's around 1/3 to 1/2 a teacher's income, ruling out China as a
> realistic option for single parent teachers and making it incredibly difficult for
> teaching couples.
>
> As a result, schools simply won't offer this if they know it could result in people
> withdrawing from jobs once they realise the total cost. It's just easier to not have
> this than try to explain or mitigate it fairly, taking into account those teachers
> who don't have kids.

As said, I realize the tax burden is for teachers, and that teachers with 2 or more (or even one) child will no longer be eager to apply at a Chinese IS anymore, but it was unclear to me why a school would no longer offer these spots.
I can see why what you say (people withdrawing) might be a reason to stop offering this, although it doesn't take more than one sentence to explain the increased tax burden for teachers with kids in the job advert, and at the start of the interview.
If I was part of a teaching couple with two or three kids and we would have a good shot at landing jobs at WAB (which is a great school), we'd still be interested, but would only apply if these free tuition was part of the deal. If I was a Chinese IS I would continue to offer the free tuition (assuming the school was previously interested in hiring teachers with children), but make it clear to anyone applying that the free tuition is taxed.

But if the tuition is taxed, and the teacher has to pay it, it isn't really free, is it?

That actually poses a problem for schools who advertise on some sites, such as TES - UK advertising rules would not allow TES to advertise something as "free" if it incurs a cost. They can't even be described as 'subsidised' because the tax is due on the full amount, regardless of subsidy. So advertising will be difficult.

It also reflects reality. Most teachers simply aren't going to absorb that level of tax easily. So from a Head's point of view, it's much better simply to advertise for single applicants / teaching couples with no dependants rather than attempt to find a place for a family. Also, given the current visa restrictions on dependants in China and with no indication of when that will change, schools would be daft just now to appoint staff with dependants.

@expatscot
Japanese international schools have been doing it for years, as have the schools from all the other countries where tuition is taxed - China is hardly the first country where this happens. They just add a line that says 'Tuition is a taxable benefit'. I don't really see a problem there.

I do agree the current visa restrictions will make any informed teachers with a trailing spouse and/or children think twice about accepting a job in China until those restrictions are lifted.