Hong Kong
Asia
Hong Kong operates a territorial tax system with low tax rates. Only income sourced in Hong Kong is taxable. Salaries tax uses progressive rates from 2% to 17% or a standard rate of 15%, whichever is lower. There is no capital gains tax, no VAT, and no sales tax.
Hong Kong Tax Cheatsheet (April 1 – March 31 (Assessment Year))
Key tax metrics at a glance for residents and expats.
How Taxation Works in Hong Kong
Understand the basics of Hong Kong's tax system, who pays tax, and how rates apply to individuals and businesses.
Tax System
Hong Kong uses a territorial tax system where only income sourced in Hong Kong is taxable. Salaries tax is assessed on net assessable income after deducting MPF contributions, personal allowances, and deductions. The IRD assesses tax annually and taxpayers file returns by the deadline. Provisional tax is estimated based on the previous year's assessment and paid in installments.
Residents
Any individual earning income from employment in Hong Kong is liable for salaries tax. Companies and partnerships earning profits in Hong Kong are liable for profits tax. Non-residents earning Hong Kong-sourced income may also be taxable under certain conditions.
Non-Residents
Hong Kong does not have a formal residency test for tax purposes. Instead, the source of income determines taxability. Employment income sourced in Hong Kong is taxable regardless of residency. Overseas income is generally not taxable. The 60-day rule provides an exemption for short-term visitors.
Individuals
Salaries tax is the primary personal tax, calculated on employment income after deductions for MPF contributions, personal allowances, and deductions. Progressive rates from 2% to 17% apply, or the standard rate of 15%, whichever is lower.
Businesses
Profits tax applies to businesses carrying on trade or business in Hong Kong. Two-tiered rates: 8.25% on the first HK$2 million for corporations, 16.5% on the remainder. Unincorporated businesses pay 7.5% on the first HK$2 million and 15% on the remainder.
Territorial Tax System
Hong Kong taxes only income sourced in Hong Kong. Overseas income is generally not taxable, making it one of the most attractive jurisdictions for international business.
Progressive vs Standard Rate
Salaries tax is charged at progressive rates (2%–17%) or the standard rate (15%), whichever is lower. This ensures lower-income earners pay less tax.
Two-Tiered Profits Tax
Profits tax uses two-tiered rates: 8.25% on the first HK$2 million for corporations, and 16.5% on the remainder. This benefits small businesses.
MPF Contributions
Mandatory Provident Fund contributions by both employer and employee reduce assessable income, lowering the salaries tax liability.
Important Tax Information
Key facts about Hong Kong's tax system to help you understand your obligations.
Tax Year
April 1 – March 31 (Assessment Year)
Filing Deadline
April 15 (paper); June 18 (e-filing)
Tax Authority
Currency
HKD
Residency Rules
Hong Kong does not have a formal residency test for tax purposes. Instead, the source of income determines taxability. Employment income sourced in Hong Kong is taxable regardless of residency. Overseas income is generally not taxable. The 60-day rule provides an exemption for short-term visitors.
Employer Withholding
Hong Kong employers do not withhold income tax from salaries. Instead, the IRD assesses tax annually based on filed returns. Employers are required to file Employer's Returns (Form BIR56B) reporting employee salaries. Taxpayers pay provisional tax in installments based on the previous year's assessment.
Payment Deadline
Provisional tax installments due in April, July, and November
Tax Brackets & Rates
April 1 – March 31 (Assessment Year) income tax brackets for Hong Kong. Tax is calculated progressively — higher portions of income are taxed at higher rates.
Progressive Tax
Higher portions of income are taxed at higher rates. Only the income within each bracket is taxed at that bracket's rate.
Marginal Rate
The rate applied to your last dollar of income. It determines the tax on your next dollar earned.
Effective Rate
The average rate across all your income. Total tax divided by total income gives your true tax burden.
| Bracket | Rate | Threshold | Notes |
|---|---|---|---|
| 2% | 2% | First HK$50,000 | Progressive rate |
| 6% | 6% | HK$50,001 – HK$100,000 | Progressive rate |
| 10% | 10% | HK$100,001 – HK$150,000 | Progressive rate |
| 14% | 14% | HK$150,001 – HK$200,000 | Progressive rate |
| 17% | 17% | Above HK$200,000 | Progressive rate |
| 15% | 15% | Standard rate on net income | Flat rate — whichever is lower applies |
Common Deductions in Hong Kong
Deductions reduce your taxable income. Here are the most common deductions available to Hong Kong taxpayers.
Standard Deduction
Basic allowance of HK$132,000 for all taxpayers. Additional deductions available for MPF contributions, married person's allowance, dependent child allowance, and single parent allowance.
MPF Contributions
Mandatory Provident Fund contributions are deductible up to HK$18,000 per year (employee portion).
Married Person's Allowance
HK$132,000 if spouse is not assessable to tax. Additional HK$132,000 if spouse is assessable.
Dependent Child Allowance
HK$120,000 per dependent child under 18. Additional HK$120,000 for disabled dependents.
Basic Allowance
HK$132,000 for all taxpayers.
Single Parent Allowance
Additional HK$132,000 for single parents.
Tax Credits in Hong Kong
Tax credits directly reduce your tax liability. Here are the major credits available in Hong Kong.
Child Tax Deduction
HK$120,000 per dependent child under 18.
Disabled Dependent Deduction
Additional HK$120,000 per disabled dependent.
Elderly Dependent Deduction
HK$100,000 per parent or grandparent aged 60 or above.
Who Should Use This Calculator
Our Hong Kong tax calculators are designed for a wide range of users. See if they match your situation.
Salaried Employees
Employees working in Hong Kong who receive salaries and need to estimate their salaries tax under the progressive or standard rate system.
Freelancers & Contractors
Self-employed individuals and contractors who earn business or professional income sourced in Hong Kong and need to calculate their tax obligations.
Business Owners
Company owners and partnerships carrying on business in Hong Kong who are subject to profits tax on Hong Kong-sourced profits.
Expats
Foreign professionals and expats working in Hong Kong who need to understand the 60-day rule, salaries tax, and their obligations under IRD rules.
Property Owners
Property owners and investors with rental income or property transactions who need to estimate property tax and stamp duty liabilities.
How to Use the Hong Kong Tax Calculator
Get an accurate tax estimate in just a few steps. Here is how to use our calculator effectively.
Enter Income
Input your annual employment income or business profits, including bonuses, allowances, and other benefits.
Add Deductions
Enter MPF contributions, married person's allowance, dependent child allowance, and other allowable deductions.
Calculate Tax
The calculator applies both the progressive rates and the standard rate (15%), then selects whichever is lower.
Review Effective Rate
Compare your effective tax rate against the standard rate to understand your true tax burden after allowances.
Plan Ahead
Use the results to plan your MPF contributions, charitable donations, and other tax-saving strategies for the next year.
Frequently Asked Questions
Quick answers to common questions about Hong Kong taxation, filing requirements, and using our calculators.
What is the salaries tax rate in Hong Kong?
Salaries tax is charged at progressive rates from 2% to 17% on net chargeable income, or at the standard rate of 15% on net income, whichever is lower.
How is Hong Kong tax calculated?
Hong Kong uses a territorial tax system. Salaries tax is calculated on assessable income after allowable deductions and personal allowances. The progressive rates range from 2% to 17%.
Do I need to pay Hong Kong tax as a foreigner?
If you are employed in Hong Kong, your employment income sourced in Hong Kong is subject to salaries tax. The 60-day rule may exempt short-term visitors.
What is the 60-day rule?
Under the 60-day rule, employment income sourced in Hong Kong is exempt from salaries tax if the individual is present in Hong Kong for not more than 60 days in the year and is not a resident.
Is Hong Kong tax free for expats?
Hong Kong is not entirely tax-free for expats. Employment income sourced in Hong Kong is subject to salaries tax. Overseas income is generally not taxable under the territorial system.
Explore Hong Kong Tax
Trust & Transparency
Last Updated
2025-06-15
Educational Disclaimer
The tax information and calculators on this page are for educational and informational purposes only. They do not constitute professional tax advice. Tax laws are subject to change. Always consult a qualified tax professional for advice specific to your situation.
Calculation Methodology
Tax calculations follow the Hong Kong Inland Revenue Ordinance and IRD guidelines. Progressive rates and standard rate are applied as per the current assessment year. MPF contribution deductions are based on the MPF Schemes Ordinance. Allowances and deductions are applied as per the Salaries Tax Ordinance.
Data Sources
- Inland Revenue Department (IRD) Hong Kong
- Hong Kong Budget 2026
- IRD Tax Circulars and Guidelines
Privacy-First
All calculations are performed locally in your browser. No personal data is collected, stored, or transmitted to any server. Your financial information never leaves your device.
Official Authority
For the most accurate and up-to-date information, visit the official government tax authority:Inland Revenue Department (IRD)
Country Tax Overview
