Scope of Charge
Hong Kong salaries tax is charged on income arising in or derived from Hong Kong as per regional source.
From 1 April of one year to 31 March of the next year
Rate of Taxation
Rate of Taxation Salaries tax is chargeable at progressive rates or standard rate, which will be the smaller of the following:
1) 15% of net total income chargeable at standard rate
2) Net chargeable income at salaries tax progressive rates
Widen the marginal tax bands for tax on salaries from the current HK$45,000 to HK$50,000, increase the number of tax bands from four to five, and adjust the marginal tax rates to 2%, 6%, 10%, 14% and 17% respectively commencing from 2018/19.
|2022/23 * - 2018/19||2017/18|
|Tax Band(HK$)||Tax Rate||Tax Band(HK$)||Tax Rate|
|First 50,000||2%||First 45,000||2%|
|Next 50,000||6%||Next 45,000||7%|
|Next 50,000||10%||Next 45,000||12%|
|On the remainder||17%||On the remainder||17%|
Reduce the tax on salaries and tax under personal assessment for 2021/22 by 100% subject to a ceiling of HK$10,000 *.
Deductions and Allowances
Salaries tax clearly defines deductible items, that deductible portion includes donations from governmentally approved charitable organisations, contributions paid to recognized retirement schemes, self-education expenses, interest on personal home loans and all outgoing expenses incurred in order to fully or necessarily produce the assessable income. The information for tax allowances and tax rates for the year 2022/23* - 2019/20 and 2018/19 is listed below:
|Allowances in Computing Salaries Tax||2022/23* - 2019/20(HK$)||2018/19(HK$)|
|Married person's allowance||264,000||264,000|
|1st to 9th child (each)：|
|Year of birth||240,000||240,000|
|Dependent Parent / Grandparent Allowance|
|Aged 60 or above：|
|Not residing with taxpayer||50,000||50,000|
|Residing with taxpayer throughout the year||100,000||100,000|
|Aged 55 to 59：|
|Not residing with taxpayer||25,000||25,000|
|Residing with taxpayer throughout the year||50,000||50,000|
Dependent Brother / Sister Allowance
(for whom no child allowance has been claimed by his / her parent)
|Single Parent Allowance||132,000||132,000|
Disabled Dependent Allowance
(in addition to any allowances already granted for the disabled person)
|Introduce a personal disability allowance for eligible taxpayers||75,000||75,000|
|Maximum Deductions in Computing Salaries Tax||2022/23 * - 2019/20(HK$)||2018/19(HK$)|
|Charitable donation||35% of assessable income||35% of assessable income|
|Expenses of self-education||100,000||100,000|
|Home loan interest||100,000||100,000|
|Elderly residential care expense||100,000||100,000|
|Contribution to recognized occupational retirement scheme||18,000||18,000|
|Voluntary Contributions in Annuity Products and Mandatory Provident Fund||60,000||—|
|Qualifying Voluntary Health Insurance Scheme Policy Premiums||8,000 per insured person||—|
Note: * The tax measures proposed in the 2022/23 Budget are subject to the enactment of relevant legislation.
Provisional Salaries Tax
Before the related tax year ends, the Inland Revenue Department (IRD) will impose the provisional salaries tax on persons according to the tax payment assessed in the previous year. In the succeeding year, when the tax payment for the related year is assessed, the provisional tax paid will be used to pay the salaries tax payable in that year.
- Provide a tax deduction of qualified premiums for taxpayers who purchase eligible health insurance products for themselves or their dependents under the Voluntary Health Insurance Scheme, at the ceiling of HK$8,000 per insured person.
- Allow married persons the option to elect for personal assessment separately commencing from the year of assessment 2018/19, providing more flexibility to taxpayers.
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