How is income tax calculated in Hong Kong?
Hong Kong taxes salaries for the year from 1 April to 31 March. Mandatory MPF contributions (up to $18,000) come off first, giving net income; then allowances — $145,000 basic from 2026/27 — give net chargeable income, taxed at 2%, 6%, 10% and 14% on successive $50,000 slices and 17% on the rest.
Tax can never exceed the standard rate on net income: 15% on the first $5,000,000 and 16% above. You pay whichever is lower.
What is the income tax rate in Hong Kong?
| Taxable income | Rate |
|---|---|
| HK$0 – HK$50,000 | 2% |
| HK$50,000 – HK$100,000 | 6% |
| HK$100,000 – HK$150,000 | 10% |
| HK$150,000 – HK$200,000 | 14% |
| Over HK$200,000 | 17% |
| Taxable income | Rate |
|---|---|
| HK$0 – HK$5,000,000 | 15% |
| Over HK$5,000,000 | 16% |
What mandatory salary deductions apply?
- MPF: 5% of monthly income up to $30,000, so at most $1,500 a month. Nothing is deducted if you earn less than $7,100 a month.
Gross salary and take-home salary
Gross salary is what your contract says before anything is taken off. Take-home salary is what reaches your bank account after income tax and the compulsory employee contributions. Employer contributions are paid on top of your salary and are not taken from it.
Example: HK$50,000.00 a month
A single employee earning $50,000 a month.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | HK$50,000.00 | HK$600,000.00 |
| Income tax | HK$4,690.83 | HK$56,290.00 |
| Compulsory contributions | HK$1,500.00 | HK$18,000.00 |
| Take-home pay | HK$43,809.17 | HK$525,710.00 |
Effective income tax rate 9.4%; all deductions 12.4%.
How can employees legally reduce their taxes?
- Voluntary MPF contributions and qualifying annuity premiums are deductible within a shared cap.
- Allowances for children, dependent parents and a spouse without income reduce net chargeable income.
- Self-education expenses are deductible up to $100,000.
Frequently asked questions
What is the basic allowance for 2026/27?
$145,000, up from $132,000. The married person’s allowance is $290,000.
What is the standard rate?
15% on the first $5,000,000 of net income and 16% above, from 2024/25. Salaries tax never exceeds it.
Is MPF compulsory?
For most employees aged 18 to 64, yes. Some people here for 13 months or less, or covered by an overseas scheme, are exempt.
Official sources
- GovHK / Inland Revenue Department: Tax rates of salaries tax and personal assessment (progressive and two-tiered standard rates). Read 5 November 2026.
- Inland Revenue Department: 2026-27 Budget: allowances from 2026/27 (basic $145,000, married $290,000). Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 22 July 2026): Hong Kong SAR: MPF contributions and the $18,000 deduction. Read 5 November 2026.
- PwC Worldwide Tax Summaries: Hong Kong SAR: two-tiered profits tax rates for unincorporated businesses. Read 5 November 2026.
- Mandatory Provident Fund Schemes Authority: Self-employed persons: relevant income $7,100 to $30,000 a month, 5%. Read 5 November 2026.
Last reviewed 5 November 2026. An estimate for planning, not tax advice; your employer’s payroll and the tax authority decide what is actually withheld.
← Compare Hong Kong with other countries in the worldwide income tax calculator