How Hong Kong salaries tax is worked out
Salaries tax is charged on income from employment in Hong Kong for a year of assessment, which runs from 1 April to 31 March. The Inland Revenue Department (IRD) works out your tax in two ways and charges you the lower of the two:
- Start with your income. Add up salary, bonus, commission, leave pay and cash allowances for the year.
- Take off deductions to get your net income. The most common one is your MPF mandatory contributions, which are deductible up to $18,000 a year. Others include home loan interest, domestic rent, VHIS premiums and approved donations, each with its own limit.
- Take off allowances to get your net chargeable income. Everyone gets the basic allowance (or the married person's allowance), plus any allowances for children and dependent parents.
- Method A – progressive rates: charge the net chargeable income at 2%, 6%, 10% and 14% on the first four $50,000 slices, and 17% on the rest.
- Method B – standard rates: charge the net income (before allowances) at 15% on the first $5,000,000 and 16% on anything above.
- Pay the lower figure, then subtract any one-off tax reduction the government has announced for that year.
Because allowances only help under Method A, most people pay at progressive rates. Only higher earners – roughly $2.13 million a year for a single person in 2026/27 – reach the point where the standard rate is cheaper.
Allowances for 2025/26 and 2026/27
The 2026-27 Budget raised most personal allowances from the 2026/27 year of assessment. The law was gazetted on 22 May 2026.
| Allowance (HK$) | 2025/26 | 2026/27 |
|---|---|---|
| Basic allowance | 132,000 | 145,000 |
| Married person's allowance | 264,000 | 290,000 |
| Single parent allowance | 132,000 | 145,000 |
| Child allowance (each of 1st to 9th child) | 130,000 | 140,000 |
| Additional child allowance, newborn (each child) | 130,000 | 140,000 |
| Dependent parent/grandparent, aged 60+ (each) | 50,000 | 55,000 |
| Dependent parent/grandparent, aged 55–59 (each) | 25,000 | 27,500 |
| Additional allowance if living with you all year, 60+ (each) | 50,000 | 55,000 |
| Additional allowance if living with you all year, 55–59 (each) | 25,000 | 27,500 |
From 2026/27 the additional child allowance can be claimed in each of the first two years after a child is born (children born on or after 1 April 2025).
Tax rates
Progressive rates (2020/21 onwards)
| Net chargeable income | Rate | Tax on band |
|---|---|---|
| First $50,000 | 2% | $1,000 |
| Next $50,000 | 6% | $3,000 |
| Next $50,000 | 10% | $5,000 |
| Next $50,000 | 14% | $7,000 |
| Remainder | 17% | – |
Standard rates (2024/25 onwards)
15% on the first $5,000,000 of net income, 16% on the remainder.
Tax reduction
2025/26: 100% of the tax, up to $3,000 per case. A married couple who elect joint assessment count as one case, so they share one $3,000 cap. 2026/27: no reduction has been announced as of 21 Oct 2026. If one is announced in a future Budget we will add it.
Worked example 1: single, $380,000 a year
This is the IRD's own illustration from the 2026-27 Budget.
| 2025/26 | 2026/27 | |
| Income | $380,000 | $380,000 |
| Less basic allowance | $132,000 | $145,000 |
| Net chargeable income | $248,000 | $235,000 |
| Tax at progressive rates | $16,000 + 17% × $48,000 = $24,160 | $16,000 + 17% × $35,000 = $21,950 |
| Less tax reduction | $3,000 | – |
| Tax payable | $21,160 | $21,950 |
Standard rate check: 15% × $380,000 = $57,000, which is higher, so the progressive figure applies. (The IRD example has no MPF deduction; enter 0 in the MPF box to reproduce it.)
Worked example 2: when the standard rate applies
Married, spouse has no income, income $5,300,000, deductions $210,000 (2026/27, also an IRD illustration).
- Net income: $5,300,000 − $210,000 = $5,090,000
- Net chargeable income: $5,090,000 − $290,000 married person's allowance = $4,800,000
- Progressive: $16,000 + 17% × $4,600,000 = $798,000
- Standard: 15% × $5,000,000 + 16% × $90,000 = $764,400
- Tax payable is the lower figure: $764,400.
Married couples: separate or joint?
By default each spouse is taxed separately with their own basic allowance. You can elect joint assessment, where incomes are added together and the married person's allowance is used instead. It usually helps when one spouse earns less than their allowances. When both of you have income, this calculator works out both options and shows the cheaper one. For separate taxation it counts the child and parent allowances for the higher-earning spouse, following the IRD's guidance.
What this calculator does not cover
- Dependent brother/sister, disabled dependant and personal disability allowances.
- Personal assessment, rental income, and provisional tax.
- Joint assessment where combined net income is above $5,000,000 (how the 16% tier applies there isn't covered; we show a warning).
- The 2026 Policy Address proposal to raise the child allowance to $160,000 for second and later children born on or after 16 September 2026. It still has to go through legislation, so it is not included.
For a binding figure, use the IRD's own tax calculator or your notice of assessment.
Frequently asked questions
Is the 2026/27 figure final?
No. The 2026/27 year runs to 31 March 2027. We use the allowances already in law for 2026/27. A tax reduction for 2026/27, if any, would normally be announced in a later Budget, so none is included yet.
Why does the calculator ask for MPF separately?
Mandatory MPF contributions are the most common deduction and have a fixed cap of $18,000 a year per person. If you leave the box blank we estimate 5% of your monthly income, capped at $1,500 a month.
What is the difference between net income and net chargeable income?
Net income is income minus deductions. Net chargeable income is net income minus allowances. Progressive rates are charged on net chargeable income; standard rates are charged on net income.
When does the standard rate apply?
When 15% (and 16% above $5 million) of your net income is less than the progressive tax on your net chargeable income. For a single person with no deductions this happens above about $2,132,500 in 2026/27 and $2,022,000 in 2025/26.
Who gets the $3,000 tax reduction for 2025/26?
Every taxpayer with tax to pay, up to $3,000 per case. A couple who elect joint assessment share one $3,000 cap. The IRD applies it automatically in the final assessment.
Does this calculator store my numbers?
No. Everything is worked out in your browser and nothing you type is sent to us.
Official sources
Every figure on this page was checked against these pages on 21 Oct 2026.
- GovHK – Tax rates of salaries tax & personal assessment
- IRD – 2026-27 Budget tax measures (allowances, 2025/26 reduction)
- IRD – Illustrative examples for the 2026-27 Budget (PDF)
- GovHK – Allowances (conditions)
- GovHK – Deduction for MPF contributions ($18,000 cap)
- GovHK – Separate taxation or joint assessment
- IRD – 2026 Policy Address tax proposals (not yet law)
- GovHK – IRD tax calculator