Hong Kong Tax Guide 2026: Salaries Tax Explained
Quick Answer
Hong Kong salaries tax is charged by the Inland Revenue Department as the lower of two figures: progressive rates from 2% to 17% on net chargeable income, or a standard rate of 15% on net income before allowances, rising to 16% above HKD 5,000,000. The basic personal allowance is HKD 132,000 for 2025/26 and HKD 145,000 from 2026/27, keeping most residents' effective tax low.
Rates as of 2026. Verify with official sources before acting.
Hong Kong salaries tax is charged as the lower of progressive rates on your income after allowances or a standard rate of 15% (16% above HKD 5,000,000 of net income), which is why it stays one of the lightest tax burdens in the world. There is no monthly withholding, no tax on capital gains or dividends, and generous allowances that shield a large slice of income. This guide covers how the system works, the rates and allowances for 2026, how to file, and how Hong Kong stacks up against Singapore. To estimate your own bill, use the Hong Kong salaries tax calculator.
How Does Hong Kong Salaries Tax Work?
Salaries tax applies to income arising in or derived from employment in Hong Kong. What makes the system unusual is that your tax is the lower of two separate calculations, so you never pay more than the standard rate cap, however high your income.
- The progressive method applies rising rates to your net chargeable income, which is your income after allowable deductions and personal allowances.
- The standard rate method applies a flat rate to your net income, calculated before allowances are deducted.
The Inland Revenue Department works out both and charges you the smaller figure. For most residents the progressive method is lower, because allowances remove a big chunk of income before the rates apply. Only high earners end up paying the standard rate. For the official overview of how these charges apply, see Hong Kong IRD salaries tax.
What Are the Progressive Rates in 2026?
The progressive rates apply in bands of HKD 50,000 to your net chargeable income.
| Net Chargeable Income Band (HKD) | Rate |
|---|---|
| First 50,000 | 2% |
| Next 50,000 | 6% |
| Next 50,000 | 10% |
| Next 50,000 | 14% |
| Remainder | 17% |
The standard rate, which caps the total, is 15% on the first HKD 5,000,000 of net income and 16% above that. Because allowances are stripped out before the progressive rates apply, the effective rate most residents pay lands well below the 17% top band. These bands and rates are published in the IRD tax rate tables.
What Allowances Can You Claim?
Allowances are the heart of the Hong Kong system, and they reduce your net chargeable income directly. The main ones are below, from the IRD table dated August 2026. The amounts rise from the year of assessment 2026/27.
| Allowance | 2025/26 (HKD) | From 2026/27 (HKD) |
|---|---|---|
| Basic personal allowance | 132,000 | 145,000 |
| Married person's allowance | 264,000 | 290,000 |
| Child allowance (each of the 1st to 9th child) | 130,000 | 140,000 |
| Dependent parent or grandparent aged 60 or above (each) | 50,000 | 55,000 |
| Dependent parent or grandparent aged 55 to 59 (each) | 25,000 | 27,500 |
| Single parent allowance | 132,000 | 145,000 |
On top of allowances, you can deduct mandatory MPF contributions up to HKD 18,000, along with self-education expenses, approved charitable donations, home loan interest, and contributions to certain voluntary schemes. These deductions come off before allowances in the progressive calculation. A dependent parent or grandparent who lives with you gives an additional allowance equal to the amount in the table. For 2025/26 only, the 2026-27 Budget also cuts final salaries tax by 100%, up to HKD 3,000 per case. Our calculator uses the 2025/26 amounts.
See your number instantly. The Hong Kong salaries tax calculator applies your allowances and MPF, compares the progressive and standard methods, and shows your effective tax rate.
How Do You File Taxes in Hong Kong?
There is no monthly withholding in Hong Kong, which surprises people arriving from PAYE systems. Instead, the process runs once a year.
- Return issued: The IRD sends your individual tax return, usually in early May.
- Complete and submit: You report your income and claim allowances and deductions, filing on paper or through the eTAX online portal, generally within one month.
- Assessment: The IRD calculates your tax and issues a demand note.
- Payment: Tax is usually paid in two instalments, the larger one around January and the balance around April of the following year.
Because there is no withholding, it is wise to set aside money through the year so the bill does not catch you out. Provisional tax, an advance payment toward the next year, is also charged alongside the current year's tax, which can make the first bill feel large.
How Does Hong Kong Compare With Singapore?
Hong Kong and Singapore are the two great low tax hubs of Asia, and expats often weigh one against the other. Both use progressive rates with generous reliefs and neither taxes capital gains or dividends. The headline difference is the ceiling: Hong Kong's standard rate caps salaries tax at 15%, or 16% above HKD 5,000,000 of net income, while Singapore's top marginal rate reaches 24%.
Effective rates aren't the same at every income, and Singapore can be lower in the middle. As a simple illustration, a single person in Hong Kong on HKD 600,000 with HKD 18,000 of MPF pays HKD 58,500 on 2025/26 rates before the one-off reduction, or 9.75% of income. A single resident under 55 in Singapore on SGD 100,000, claiming only employee CPF of SGD 19,200 and SGD 1,000 of earned income relief, pays SGD 3,336, or 3.34%. At the top end, HKD 6,000,000 gives 15.12% at the standard rate, while SGD 1,000,000 on the same Singapore assumptions gives 19.45%. These are single cases at different incomes, and other reliefs will change them. Singapore has no equivalent of Hong Kong's provisional tax. For a fuller comparison of take-home pay across the region, see our Asia salary comparison.
Frequently Asked Questions
How does Hong Kong salaries tax work?
Hong Kong charges salaries tax as the lower of two calculations. The first applies progressive rates from 2% to 17% on your net chargeable income, which is income after deductions and allowances. The second applies a standard rate of 15% to your net income before allowances, or 16% above HKD 5,000,000. You pay whichever amount is lower, which keeps tax modest for most people.
What are the progressive tax rates in Hong Kong?
The progressive rates apply in bands of HKD 50,000 on net chargeable income: 2% on the first 50,000, 6% on the next, 10% on the next, 14% on the next, and 17% on the remainder. Because allowances are deducted first, many residents pay an effective rate well below 17%.
What allowances can you claim in Hong Kong?
For 2025/26 the basic personal allowance is HKD 132,000, or HKD 264,000 for a married couple under joint assessment, rising to HKD 145,000 and HKD 290,000 from 2026/27. Each child gives an allowance of HKD 130,000, rising to HKD 140,000, with an extra amount for a newborn. There are also allowances for dependent parents, grandparents, siblings, and single parents.
How do you file taxes in Hong Kong?
The Inland Revenue Department issues a tax return, usually in May, which you complete and submit by the deadline, either on paper or through eTAX online. There is no monthly withholding like PAYE, so you receive an assessment and pay the tax in one or two instalments, typically in the following January and April.
Is Hong Kong tax lower than Singapore?
Both are low, but it depends on income. Hong Kong's standard rate caps salaries tax at 15%, or 16% above HKD 5,000,000 of net income, while Singapore's top marginal rate is 24%. In our examples Singapore is lower at middle incomes, at 3.34% on SGD 100,000 against 9.75% on HKD 600,000. High earners often pay a lower share in Hong Kong because of the standard rate cap. Neither taxes capital gains or dividends.