Hong Kong’s Salaries tax and personal income tax in Hong Kong refer to the taxation of an individual’s income. The following are some important information and explanations about Hong Kong’s Salaries tax and personal income tax.
Employee’s Salaries Tax Filing Return
Basic Information:
- Hong Kong’s Salaries tax is levied on your actual income for the relevant tax year, which runs from April 1st to the following March 31st.
- Net Chargeable Income = Total Income – Deductions – Allowances, Net Income = Total Income – Deductions.
- Hong Kong’s Salaries tax is calculated either (1) on your “Net Chargeable Income” using “progressive tax rates,” or (2) on your “Net Income” using “standard tax rates,” whichever results in a lower tax liability.
Tax Return Form:
The 2022/23 “Individual Tax Return” has been issued by the department in May. If you have not received your tax return form after June, it is recommended to call the department for inquiry.
- The Inland Revenue Department’s hotline for individual tax matters is 187 8022, operating from 8:15am to 12:30pm and from 1:30pm to 5:30pm, Monday to Friday.
Salaries Income Tax Rates
The Hong Kong’s Salaries tax rate table is as follows:
- First tier: Annual income not exceeding $50,000, tax rate 2%
- Second tier: Annual income exceeding $50,000 but not exceeding $100,000, tax rate 6%
- Third tier: Annual income exceeding $100,000 but not exceeding $150,000, tax rate 10%
- Fourth tier: Annual income exceeding $150,000 but not exceeding $200,000, tax rate 14%
- Fifth tier: Annual income exceeding $200,000, tax rate 17%
Your salary level determines which income range you fall into and how much Hong Kong’s Salaries tax you need to pay.
In Hong Kong, the annual personal income tax exemption amount is HKD 132,000. This means that if your income is below this exemption amount, you do not need to pay any personal income tax to the government.
Tax Exemptions
The following are the exemption amounts for the 2022/23 year:
- Basic Exemption: HK$132,000
- Married Person Exemption: HK$264,000 • Child Allowance (for the first to ninth child): HK$130,000 (per child)
- Additional Child Allowance: HK$120,000 (in the tax year of the birth of each child) • Dependent Brother or Sister Allowance: HK$37,500 (per dependent)
- Dependent Parent/Grandparent Allowance:
- For parents/grandparents/ancestors aged 60 or above, or eligible to claim disability allowance under the government scheme: HK$50,000
- For parents/grandparents/ancestors aged 55 or above but below 60: HK$25,000
- Additional Dependent Parent/Grandparent Allowance:
- For parents/grandparents/ancestors aged 60 or above, or eligible to claim disability allowance under the government scheme: HK$50,000
- For parents/grandparents/ancestors aged 55 or above but below 60: HK$25,000
- Single Parent Allowance: HK$132,000 • Disabled Dependent Allowance: HK$75,000
- Dependent Brother or Sister Allowance (for the disabled): HK$75,000 (per dependent)
- Self-Education Expenses: up to HK$100,000
- Residential Care Expenses for the Elderly: up to HK$100,000
- Home Loan Interest: up to HK$100,000
- Mandatory Contributions to Recognized Retirement Schemes: up to HK$18,000
- Qualifying Premiums Paid for Voluntary Health Insurance Scheme Policies: up to HK$8,000 (per insured person)
- Qualifying Deferred Annuity Premiums and Tax-deductible Voluntary Contributions to Mandatory Provident Fund Schemes: up to HK$60,000
- Deduction for Home Loan Interest: up to HK$100,000
- Domestic Rents Deduction: up to HK$100,000
- Individual and business donors who are chargeable to salaries tax, personal assessment or profits tax can claim deduction for the aggregate of approved charitable donation up to 35% (up to 25% for the years of assessment 2004/05 to 2007/08) of the assessable income or profits, as the case may be, in the basis period of a year of assessment. Such aggregate must not be less than $100. (Sections 16D and 26C of the Inland Revenue Ordinance)
Personal Tax Deductions
The Hong Kong government allows certain expenses to be used for tax deductions. Here are some types of expenses that can be eligible for tax deductions:
- Mandatory Provident Fund (MPF): Up to HK$18,000 of mandatory MPF contributions can be claimed as tax deductions.
- Charitable donations: Your donations can be eligible for personal income tax deductions up to a certain amount. However, not all payments you have made are deductible.
- Expenses of Self-education: (including tuition and the related examination fees) paid for a prescribed course of education may be deductible under salaries tax.