Hong Kong SAR

Individual - Sample personal income tax calculation

Last reviewed - 31 December 2020

Below is a sample salaries tax computation for year of assessment 2020/21 for illustrative purposes.

Assumptions:

  • The individual is a married person with two children both below age 18.
  • The individual’s spouse is not working and the two children are maintained by the individual.
  • The total assessable income of the individual consists of salaries of HKD 650,000 and year-end bonus of HKD 50,000.
  • The individual made contributions of HKD 18,000 to an MPF scheme during the year.
  • The individual made qualified charitable donations of HKD 3,000 during the year.
Salaries tax computation HKD HKD
Salaries 650,000  
Bonus 50,000  
Total assessable income   700,000
Less: Concessionary deductions    
Charitable donations (3,000)  
Retirement scheme contributions (18,000) (21,000)
Net income   679,000
Less: Allowances    
Married person’s allowance (264,000)  
Child allowances (HKD 120,000 x 2) (240,000) (504,000)
Net chargeable income   175,000
Tax at progressive rates:    
First HKD 50,000 @ 2% 1,000  
Next HKD 50,000 @ 6% 3,000  
Next HKD 50,000 @ 10% 5,000
Remainder HKD 25,000 @ 14% 3,500  
Tax payable before the one-off tax reduction for 2020/21 (1)   12,500
Less: One-off 100% tax reduction for 2020/21, capped at HKD 10,000 (10,000)
Tax payable 2,500

Note

  1. The tax amount calculated based on the standard rate (i.e. HKD 679,000 @15% = HKD 101,850) is higher than that computed at progressive rates so the standard rate would not apply.