Hong Kong Salaries Tax 2026/27: Rates, Allowances & How to File
Kenji Farre, Director · Oct 7, 2026 · 8 min read
Hong Kong salaries tax is charged on employment income at progressive rates of 2%, 6%, 10%, 14% and 17%, or at the standard rate of 15% (16% on net income above HK$5 million), whichever gives the lower bill. For the 2026/27 tax year (1 April 2026 to 31 March 2027) the basic allowance rises to HK$145,000 and the married person's allowance to HK$290,000. A single person on HK$50,000 a month pays about HK$56,290 a year, an effective rate of roughly 9.4%. Tax is not withheld from your pay: you file a return each May and pay in two instalments, usually in January and April.
This guide covers who pays, the 2026/27 rates and allowances, worked examples by salary, how housing benefits are taxed, the filing calendar, provisional tax, and what to do when you leave Hong Kong. For the wider picture on visas, housing and daily life, see our complete guide to living in Hong Kong.
How Does Salaries Tax Work in Hong Kong?
Salaries tax is Hong Kong's income tax on employment. It is charged on income from any office or employment arising in or derived from Hong Kong, and it is run by the Inland Revenue Department (IRD).
Three things make it different from what most expats are used to:
- No PAYE. Your employer does not deduct tax from your monthly salary. You get the full gross amount (less your MPF contribution) and settle the tax bill yourself later.
- Low rates and a cap. Your tax can never be more than 15% of your net income (16% on the part above HK$5 million), however much you earn.
- Territorial basis. Only Hong Kong source employment income is taxed. There is no tax on overseas investment income, capital gains or dividends at the individual level.
If you're still job hunting, the tax is one reason Hong Kong salaries go further than they look. Browse English-speaking jobs in Hong Kong on ExpatJobBoard.com. We list thousands of roles that don't require Cantonese or Mandarin.
What Are the Salaries Tax Rates for 2026/27?
You are taxed on whichever of these two calculations gives the lower figure.
Progressive rates apply to your net chargeable income, which is your income after deductions and allowances:
| Net chargeable income | Rate | Tax on the band | Cumulative tax |
|---|---|---|---|
| First HK$50,000 | 2% | HK$1,000 | HK$1,000 |
| Next HK$50,000 | 6% | HK$3,000 | HK$4,000 |
| Next HK$50,000 | 10% | HK$5,000 | HK$9,000 |
| Next HK$50,000 | 14% | HK$7,000 | HK$16,000 |
| Remainder | 17% |
Standard rates apply to your net income after deductions but before allowances:
| Net income | Standard rate |
|---|---|
| First HK$5,000,000 | 15% |
| Above HK$5,000,000 | 16% |
Sources: IRD salaries tax leaflet PAM 39 (May 2026) and IRD 2026/27 tax computation examples.
In practice the standard rate only kicks in for a single person whose net income is above roughly HK$2.15 million a year. Below that, the progressive scale gives the lower bill.
The two-tier standard rate (15% then 16%) has applied since the 2024/25 year of assessment. Before that it was a flat 15%.
What Allowances Can You Claim in 2026/27?
The 2026-27 Budget raised most personal allowances from the 2026/27 year of assessment. The bill was passed by the Legislative Council on 13 May 2026 and gazetted on 22 May 2026, according to the IRD's 2026-27 Budget tax measures page.
| Allowance | 2025/26 | 2026/27 |
|---|---|---|
| Basic allowance | HK$132,000 | HK$145,000 |
| Married person's allowance | HK$264,000 | HK$290,000 |
| Single parent allowance | HK$132,000 | HK$145,000 |
| Child allowance (each, 1st to 9th child) | HK$130,000 | HK$140,000 |
| Additional child allowance (year of birth) | HK$130,000 | HK$140,000 |
| Dependent parent or grandparent aged 60+ | HK$50,000 | HK$55,000 |
| Dependent parent or grandparent aged 55 to 59 | HK$25,000 | HK$27,500 |
Sources: IRD 2026-27 Budget tax measures.
Two points worth knowing:
- Newborns now count twice for two years. From 2026/27 the additional child allowance for a newborn can be claimed for two years instead of one, covering children born on or after 1 April 2025. That is HK$280,000 per child in each of those two years.
- Dependent parent allowance usually needs the parent to live in Hong Kong. If your parents live overseas, read the conditions carefully before claiming.
What Deductions Reduce Your Tax?
Deductions come off your income before allowances. The ones expats use most:
| Deduction | Annual cap |
|---|---|
| MPF mandatory contributions | HK$18,000 |
| Tax-deductible voluntary MPF contributions (TVC) and qualifying deferred annuity premiums, combined | HK$60,000 |
| Voluntary Health Insurance Scheme (VHIS) premiums | HK$8,000 per insured person |
| Self-education expenses | HK$100,000 |
| Domestic rent | HK$100,000 (HK$120,000 if you live with a child born on or after 25 October 2023) |
| Home loan interest | HK$100,000 (HK$120,000 with a qualifying child) |
| Approved charitable donations | 35% of assessable income |
| Elderly residential care expenses | HK$110,000 |
| Assisted reproductive services | HK$100,000 |
Sources: IRD MPF deduction FAQ, IRD home loan interest and domestic rent ceilings, IRD 2026-27 Budget measures and PwC Worldwide Tax Summaries, Hong Kong deductions (reviewed July 2026).
The domestic rent deduction is the one most renters forget. If you rent your flat yourself and your employer does not give you a housing benefit, you can deduct up to HK$100,000 of rent a year. At the 17% marginal rate that is worth up to HK$17,000.
TVC is the other easy win. Putting HK$5,000 a month into a TVC account (HK$60,000 a year) can save a higher earner over HK$10,000 in tax, although the money is then locked into MPF until 65 or an early withdrawal ground. Our MPF guide for expats explains how that works.
How Much Tax Will You Pay? Examples by Salary
These figures are for a single person in 2026/27 with the HK$145,000 basic allowance, mandatory MPF contributions deducted, and no other deductions. Monthly take-home is after tax and MPF.
| Monthly salary | Annual income | Annual tax | Effective rate | Monthly take-home |
|---|---|---|---|---|
| HK$20,000 | HK$240,000 | HK$2,980 | 1.2% | HK$18,752 |
| HK$30,000 | HK$360,000 | HK$15,580 | 4.3% | HK$27,202 |
| HK$40,000 | HK$480,000 | HK$35,890 | 7.5% | HK$35,509 |
| HK$50,000 | HK$600,000 | HK$56,290 | 9.4% | HK$43,809 |
| HK$60,000 | HK$720,000 | HK$76,690 | 10.7% | HK$52,109 |
| HK$80,000 | HK$960,000 | HK$117,490 | 12.2% | HK$68,709 |
| HK$100,000 | HK$1,200,000 | HK$158,290 | 13.2% | HK$85,309 |
| HK$150,000 | HK$1,800,000 | HK$260,290 | 14.5% | HK$126,809 |
| HK$200,000 | HK$2,400,000 | HK$357,300 | 14.9% | HK$168,725 |
Our calculations using the IRD 2026/27 rates and allowances.
A married couple where only one partner works does noticeably better. On HK$80,000 a month, claiming the HK$290,000 married person's allowance cuts the bill from about HK$117,490 to about HK$92,840.
To check your own numbers, the IRD's sample calculations follow the same method: income, less deductions, less allowances, then the progressive scale, compared with the standard rate on net income. The IRD's own worked example is a single person earning HK$380,000 with no deductions, who pays HK$21,950.
If you're weighing an offer, our guide to whether HK$50,000 is a good salary in Hong Kong puts these take-home figures against rent and living costs.
What Income Is Taxable?
Almost everything your employer pays you is assessable:
- Base salary, wages and overtime
- Bonuses, commissions and double pay
- Cash allowances, including cash housing, education and cost of living allowances
- Leave pay and payment in lieu of notice
- Share awards and share options (taxed when they vest or are exercised)
- Gratuities at the end of a contract
What is not taxed: your own and your employer's mandatory MPF contributions, genuine reimbursement of business expenses, and severance or long service payments made under the Employment Ordinance.
How Is Housing Taxed?
Housing is where the structure of your package changes your tax bill the most, so it's worth asking HR how theirs works before you sign.
Cash housing allowance. Taxed in full, like salary. HK$30,000 a month of allowance is HK$360,000 of taxable income.
Employer-provided housing or a properly run rent refund. Instead of the rent, you are taxed on a "rental value" of 10% of your other employment income (8% or 4% for hotel or hostel rooms). The rent itself is not added to your income, as the Community Legal Information Centre explains.
The rent refund route only works if the employer controls it: the contract must state the housing benefit and limit, the employer has to check your tenancy, and you both keep the lease and receipts. Without those controls the IRD can treat the refund as a cash allowance and tax all of it, according to CLIC's guidance on rent refunds.
Here's why it matters. On a HK$80,000 salary plus HK$30,000 a month for housing:
| Structure | Taxable income | Approximate tax |
|---|---|---|
| Cash allowance | HK$1,320,000 | HK$178,690 |
| Rent refund (rental value of 10%) | HK$1,056,000 | HK$133,810 |
Our calculations for a single person using 2026/27 rates and the HK$145,000 basic allowance, with MPF deducted.
That is a saving of roughly HK$45,000 a year for the same money. If your employer offers a housing benefit, ask whether it can be paid as a rent refund. Many multinationals already do this.
Do Expats Who Work Partly Outside Hong Kong Pay Less?
Possibly, but the rules turn on where your employment is based, not where you live.
Hong Kong employment (contract made and enforceable in Hong Kong, Hong Kong employer, paid in Hong Kong): all your income is taxable, even days spent working abroad. The exception is income for services rendered outside Hong Kong where you have paid tax of a similar nature in that country.
Non-Hong Kong employment (for example, you are on secondment from a London employer that still pays you): only the income from days worked in Hong Kong is taxed, apportioned by days. If your visits total 60 days or fewer in the tax year, none of it is taxable. The Community Legal Information Centre's guide to location of employment gives a worked example: HK$365,000 of income and 100 days in Hong Kong means HK$100,000 is assessable.
Most people hired locally through Hong Kong job ads are on Hong Kong employment contracts, so assume your full salary is taxable unless your employer's tax advisers say otherwise.
When Do You File and Pay? The 2026/27 Calendar
The tax year runs from 1 April to 31 March. The cycle for someone who has worked a full year looks like this:
| When | What happens |
|---|---|
| Early May | IRD issues the Tax Return for Individuals (BIR60) |
| One month later (early June) | Paper return due |
| Two months later (early July) | Return due if filed online through eTAX |
| Later in the year | You receive your demand note (final tax for the year just ended, plus provisional tax for the current year) |
| January | First instalment due: final tax plus 75% of provisional tax |
| April | Second instalment due: the remaining 25% of provisional tax |
Sources: IRD press release on the 2025/26 returns, May 2026 and CLIC on when salaries tax is paid.
For the 2025/26 year, the IRD issued about 2.77 million returns on 4 May 2026, due on 4 June, or 4 July for eTAX filers. Those returns also benefit from a one-off reduction of 100% of final tax, capped at HK$3,000 per case.
If you are new to Hong Kong and don't receive a return, you are still responsible for telling the IRD you are chargeable. Your employer also files a notification (form IR56E) when you start. If you started work in the middle of a tax year, you will typically receive your first return the following May.
What Is Provisional Tax and Why Does It Catch People Out?
Provisional tax is an advance payment for the current tax year, estimated from last year's income. It is the single most common surprise for new arrivals.
Here is how it hits you. Say you arrive in October 2025 on HK$60,000 a month. Your first return (May 2026) covers six months of 2025/26. Your demand note then asks for:
- final tax for October 2025 to March 2026, and
- provisional tax for the whole of 2026/27, based on a full year at the same salary.
So your first January payment can be close to a full year's tax in one go. Budget for it from your first payslip. A simple rule: set aside 10% to 15% of your gross pay each month in a separate account.
You can apply to hold over (reduce) provisional tax if your income for the year will be at least 10% lower than the estimate, for example because you are leaving or changing to a lower-paid job. The IRD leaflet PAM 39 explains objections and holdover applications.
What Happens to Your Tax When You Leave Hong Kong?
Leaving Hong Kong for good triggers a formal process, and your employer is legally involved.
- Your employer files form IR56G at least one month before your expected departure date.
- Your employer must withhold all money due to you (final salary, bonus, leave pay) for one month from the date it files the IR56G, or until the IRD issues a "letter of release", whichever is earlier.
- You file a final return and pay any tax assessed. Paying by cash, EPS or cashier order speeds things up.
- The IRD issues a letter of release to your employer, who can then pay you.
Source: IRD leaflet PAM 46, Employees leaving Hong Kong.
Failing to notify or settle can lead to a fine at level 3 for the employee or employer. The IRD letter of release is also one of the documents you can use when claiming your MPF on the grounds of permanent departure.
If you are just changing jobs within Hong Kong, the process is lighter: your old employer files an IR56F and you carry on as normal.
Common Mistakes Expats Make
- Spending the first year's gross salary. Nothing is deducted at source, so the January bill can be painful. Save from day one.
- Not claiming the domestic rent deduction. If you rent and don't get housing from your employer, claim it every year.
- Taking housing as cash when a rent refund is available. On a typical expat package that is tens of thousands of dollars a year.
- Ignoring the newborn allowance changes. From 2026/27 a baby born on or after 1 April 2025 can be worth HK$280,000 of allowances a year for two years.
- Leaving without an IR56G. Your final pay is frozen until tax clearance. Give your employer at least a month's notice of your departure date.
- Assuming a remote stint abroad is tax-free. On a Hong Kong employment contract, days worked overseas are generally still taxed.
FAQs: Hong Kong Salaries Tax
How much tax do you pay in Hong Kong?
Between 0% and 15% of your income in practice. A single person on HK$30,000 a month pays about 4.3% for 2026/27, on HK$50,000 about 9.4%, and on HK$100,000 about 13.2%. Nobody pays more than 15% of net income (16% on the part above HK$5 million).
Is Hong Kong tax free for foreigners?
No. Foreigners working in Hong Kong pay salaries tax on the same basis as permanent residents. What Hong Kong does not tax is overseas investment income, capital gains and dividends, and there is no sales tax or VAT.
What is the tax-free allowance in Hong Kong in 2026/27?
The basic allowance is HK$145,000 for 2026/27, up from HK$132,000 in 2025/26. A single person with no other allowances or deductions pays no salaries tax on income up to HK$145,000 a year, about HK$12,083 a month.
Does my employer deduct tax from my salary in Hong Kong?
No. Hong Kong has no PAYE system. Your employer reports your income to the IRD, and you pay the tax yourself after receiving a demand note, usually in two instalments in January and April.
When is the Hong Kong tax return due?
Returns are issued on the first working day of May and are due one month later. If you file online through eTAX, you get an extra month. For 2025/26, returns were issued on 4 May 2026 and were due by 4 June, or 4 July for eTAX.
How is a housing allowance taxed in Hong Kong?
A cash housing allowance is taxed in full as income. If your employer provides the flat or refunds your rent under proper controls, you are instead taxed on a rental value of 10% of your other income, which is usually much lower.
Is my bonus taxed in Hong Kong?
Yes. Bonuses, double pay and commissions are all taxable in the year they accrue. A bonus does not get its own rate: it is simply added to your income for the year.
What is the Hong Kong tax rate on HK$1 million a year?
For a single person in 2026/27 with mandatory MPF deducted, tax on HK$1 million is about HK$124,290, an effective rate of roughly 12.4%. The marginal rate on the top part of that income is 17%.
Do I pay tax in Hong Kong if I work there for less than 60 days?
If your employment is based outside Hong Kong and your visits total 60 days or fewer in the tax year, the income is exempt. If you are employed in Hong Kong, the 60-day rule does not protect your salary.
Can I reduce my provisional tax?
Yes, if you expect your income for the year to fall by at least 10% compared with the estimate, or if you will leave Hong Kong. You apply for a holdover, normally at least 28 days before the payment date or within 28 days of the demand note.
What happens if I leave Hong Kong without paying tax?
Your employer must file an IR56G and withhold your final payments until the IRD issues a letter of release, so most people settle before leaving. If tax goes unpaid, the IRD can recover it through your employer and can impose fines.
Key Takeaways
- Salaries tax is the lower of progressive rates (2% to 17%) or the standard rate of 15%, rising to 16% on net income above HK$5 million.
- For 2026/27 the basic allowance is HK$145,000 and the married person's allowance HK$290,000, both up from 2025/26.
- A single person on HK$50,000 a month pays about HK$56,290 a year, an effective rate of 9.4%.
- Tax is not deducted from your pay. Returns go out in May and the bill is paid in January and April, including provisional tax for the following year.
- A rent refund taxed at a 10% rental value can save tens of thousands a year compared with a cash housing allowance.
- Domestic rent (up to HK$100,000), TVC and VHIS (HK$60,000 and HK$8,000) are the deductions most expats can use.
- Before leaving Hong Kong, your employer must file an IR56G at least one month ahead and hold your final pay until tax clearance.
Find a Better-Paid Job in Hong Kong
Low tax only helps if the salary is right in the first place. Browse English-speaking jobs in Hong Kong on ExpatJobBoard.com and compare offers with your take-home pay in mind.
