Hong Kong salaries-tax and deductions guides
Organised by year of assessment: salaries tax, allowances, deductions, personal assessment, TVC and deferred annuities, with statutory figures separated from personal inputs.
Start with the short answer
What is most often missed in a salaries-tax estimate?
Beyond income and allowances, check eligibility for MPF, donations, home-loan interest, domestic rent and TVC deductions, and remember that provisional tax is not the final liability.
- Always state the year of assessment; do not mix old allowances.
- A deduction cap does not mean everyone is eligible.
- A planning estimate is not an IRD assessment.
Four types of information in a salaries-tax estimate
Calling every reduction an allowance causes errors. Income, allowances, deductions and tax rebates have different eligibility and positions in the calculation.
| Type | Examples | Watch for |
|---|---|---|
| Assessable income | Salary, bonus, commission and some employer benefits | Non-cash benefits and termination payments may be treated differently |
| Allowances | Basic, married, child and dependent-parent allowances | Eligibility depends on family and support circumstances |
| Deductions | MPF, donations, TVC, deferred annuity, rent or home-loan interest | Each has separate eligibility, evidence and caps |
| Rates and rebates | Progressive rates, standard rate and one-off annual rebate | Use the correct year; provisional tax also affects bill cash flow |
Worked planning example
Example: the same salary can produce very different tax outcomes
Two employees earn the same monthly salary, but one qualifies for child allowance, MPF and domestic-rent deduction while the other does not. Simply multiplying salary by 12 and applying a rate misses allowances, deductions, the standard-rate comparison and annual rebate. Enter items for the correct year and reserve cash for provisional tax.
- Separate income, allowances and deductions into three lists before filing.
- A cap is only a cap; eligibility and claim year still need checking.
- The result is a budget estimate, not an official IRD assessment.
How does a year of assessment differ from a calendar year?
A Hong Kong year of assessment generally runs from 1 April to 31 March. The timing of bonuses, job changes, unpaid leave or termination affects the year in which income is estimated.
Allowances, deduction caps and one-off rebates may change each year. The tool states its applicable year, but filing should still follow the IRD documents for that year.
Are joint assessment, personal assessment and salaries-tax comparison the same?
No. Joint assessment for married salaries-tax payers differs from personal assessment across income types. The benefit depends on both spouses' income, allowances, property income, business losses and deductible interest.
A comparison tool can screen scenarios, but rental property, business or cross-border income should not be filed solely on a simplified result.
Why can provisional tax make the first bill look unusually high?
A bill may include final tax for the prior year and provisional tax for the next, so cash due is not the final liability for one year alone. If income falls substantially or another specified condition applies, check the IRD procedure and deadline for holding over provisional tax.
For planning, reserve estimated tax monthly rather than waiting for the bill.
Calculators in this topic
Guides worth reading next
Primary references for this topic include Hong Kong Inland Revenue Department.
Common questions
What is the difference between an allowance and a deduction?
Both may reduce net chargeable income, but their legal basis, eligibility and evidence differ. A published cap does not establish eligibility.
Are all MPF contributions deductible?
Mandatory contributions and TVC follow different rules and caps, and ordinary voluntary contributions are not necessarily TVC. Follow current IRD and MPFA guidance.
Can everyone claim the domestic-rent deduction?
No. Tenancy, principal-residence, ownership and other conditions affect eligibility, and agreements and payment records should be kept.
How should income from two employers be entered?
Combine assessable income in the same year and check the timing of bonuses, notice pay and other payments. Filing follows employer returns and IRD rules.
Why might the calculator differ from the tax bill?
Common reasons include provisional tax, deduction eligibility, income timing, rounding, the standard-rate comparison or IRD adjustments.
Official and authoritative references
Content reviewed: 2026-07-27