Hong Kong has one of the most competitive tax systems in the world. Salaries tax is charged on income arising in or derived from Hong Kong from employment, offices, or pensions. The system is territorial — only Hong Kong-sourced income is taxable.
Tax Rates: Progressive vs Standard
Hong Kong offers two calculation methods. The Inland Revenue Department (IRD) automatically applies whichever results in lower tax:
Progressive Rates
Net Chargeable Income (HK$)
Rate
First 50,000
2%
Next 50,000 (50,001–100,000)
6%
Next 50,000 (100,001–150,000)
10%
Next 50,000 (150,001–200,000)
14%
Remainder (200,001+)
17%
Standard Rate
15% on net income (after deductions but before personal allowances). Typically better for high earners.
Employees aged 18-65 with income over HK$7,100/month must contribute 5% to MPF (capped at HK$1,500/month). Employers match this. MPF contributions are tax-deductible.
Employee contribution: 5% (max HK$1,500/month)
Employer contribution: 5% (max HK$1,500/month)
Monthly income threshold: HK$7,100
Maximum relevant income: HK$30,000
Deductions
MPF mandatory contributions: Up to HK$18,000/year
Charitable donations: 100% of deductible donations
Home loan interest: Up to HK$100,000/year (3 years max)
Elderly residential care: Up to HK$100,000/year
Voluntary health insurance: Up to HK$8,000/year
Retirement annuity premiums (TVAF): Up to HK$60,000/year
Domestic rent (new): Up to HK$100,000/year
How to Calculate HK Salaries Tax
Determine your total Hong Kong-sourced employment income