1. What is Hong Kong Salaries Tax?

Hong Kong salaries tax is levied on income arising in or derived from Hong Kong. It follows a progressive tax rate system with a standard rate ceiling, making it one of the most competitive tax systems in the world.

2. How Does the Calculator Work?

The calculator uses the Hong Kong progressive tax formula:

Where:

• \( Assessable Income \) — Total income subject to tax (HKD)
• \( Allowances \) — Various tax allowances and deductions (HKD)
• \( Progressive Rates \) — Tax rates applied to different income bands

Progressive Tax Rates (2024):

• First HKD 50,000: 2%
• Next HKD 50,000: 6%
• Next HKD 50,000: 10%
• Next HKD 50,000: 14%
• Remainder: 17%

3. Importance of Tax Calculation

Details: Accurate tax calculation helps individuals and employers plan finances, ensure compliance with Hong Kong tax laws, and optimize tax positions through proper allowance claims.

4. Using the Calculator

Tips: Enter assessable income and total allowances in HKD. The calculator will compute the tax payable using Hong Kong's progressive tax system. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What is the standard tax rate in Hong Kong?
A: The standard rate is 15%, but most taxpayers pay less due to the progressive system and various allowances.

Q2: What are common tax allowances in Hong Kong?
A: Common allowances include basic allowance, married person's allowance, child allowance, dependent parent/grandparent allowance, and MPF contributions.

Q3: Is there a tax ceiling in Hong Kong?
A: Yes, tax payable is capped at 15% of net income (after allowances but before progressive rates).

Q4: When is the tax filing deadline?
A: Tax returns are usually issued in early May with a filing deadline in early June. Electronic filing extends the deadline.

Q5: Are bonuses and commissions taxable?
A: Yes, all income from employment, including bonuses, commissions, and allowances, are generally taxable in Hong Kong.