In this paper, I used the individual income tax reform of China in 2005 as a case study. Based on the work-leisure choice model, I study the effect of tax threshold on labor supply by using Difference in Difference method. I find that a higher tax threshold has statistically and significantly affected individual’s work hour. With higher tax threshold, all individuals increased their work hours. And with higher wage rates, urban workers choose to work less than rural workers. Keywords: tax threshold, wage rate, work hour, labor supply