Hong Kong Salaries Tax -- Skill v1.0
General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.
Section 1 -- Quick Reference
| Field |
Value |
| Country / Territory |
Hong Kong SAR, China |
| Tax |
Salaries Tax (薪俸稅) |
| Currency |
HKD (Hong Kong Dollar) only |
| Year of Assessment |
1 April -- 31 March (2024/25 = 1 Apr 2024 -- 31 Mar 2025) |
| Primary legislation |
Inland Revenue Ordinance (IRO), Cap. 112 |
| Tax authority |
Inland Revenue Department (IRD) |
| Filing portal |
ird.gov.hk / eTAX (etax.ird.gov.hk) |
| Filing deadline |
1 month from BIR60 issue (usually June/July); eTAX: 1 extra month |
| Validated by |
Pending — requires sign-off by a Hong Kong CPA or tax representative |
| Skill version |
1.0 |
Tax Calculation Method
Salaries tax is the LOWER of:
- Progressive rates on Net Chargeable Income (after deductions AND allowances)
- Standard rate on Net Income (after deductions but BEFORE allowances)
Progressive Tax Rates (2024/25 onwards)
| Net Chargeable Income Band (HK$) |
Rate |
Tax in Band |
Cumulative Tax |
| First 50,000 |
2% |
1,000 |
1,000 |
| Next 50,000 |
6% |
3,000 |
4,000 |
| Next 50,000 |
10% |
5,000 |
9,000 |
| Next 50,000 |
14% |
7,000 |
16,000 |
| Remainder |
17% |
— |
— |
Standard Rate (2024/25 onwards -- Two-Tiered)
| Net Income (HK$) |
Rate |
| First 5,000,000 |
15% |
| Exceeding 5,000,000 |
16% |
Personal Allowances (2024/25)
| Allowance |
Amount (HK$) |
| Basic allowance |
132,000 |
| Married person's allowance |
264,000 |
| Child allowance (each child) |
130,000 |
| Child allowance -- year of birth (additional) |
130,000 |
| Dependent parent/grandparent (aged 60+) |
50,000 |
| Dependent parent/grandparent (aged 60+, living together) |
100,000 |
| Dependent parent/grandparent (aged 55--59) |
25,000 |
| Dependent parent/grandparent (aged 55--59, living together) |
50,000 |
| Dependent brother/sister allowance |
37,500 |
| Single parent allowance |
132,000 |
| Disabled dependant allowance |
75,000 |
| Personal disability allowance |
75,000 |
Conservative Defaults
| Ambiguity |
Default |
| Unknown marital status |
Apply basic allowance (HK$132,000) only |
| Unknown whether children qualify |
Do not claim child allowance |
| Unknown dependent parent arrangement |
Do not claim additional allowance for living together |
| MPF deduction cap |
Apply HK$18,000 cap per employee |
| Unknown whether progressive or standard rate lower |
Calculate both; apply lower |
| Tax reduction year |
Apply 2024/25 reduction: 100%, ceiling HK$1,500 |
Section 2 -- Rules
2.1 Charge to Salaries Tax (IRO Sec. 8)
Salaries tax is charged on every person in respect of income arising in or derived from Hong Kong from:
- Office or employment
- Pension
- Lump sum payments in connection with services rendered in Hong Kong
2.2 Assessable Income
| Component |
Treatment |
| Salary, wages, commission |
Fully assessable |
| Bonus (discretionary or contractual) |
Fully assessable |
| Leave pay, end-of-contract gratuity |
Fully assessable (time-apportioned if partly HK service) |
| Housing benefit (provided by employer) |
Add rental value: 10% of net income (4% if hotel, 8% if hostel) |
| Share options/awards |
Assessable at exercise/vesting (gain = market value - cost) |
| Employer MPF contributions |
NOT assessable (exempt under IRO Sec. 8(1A)) |
| Reimbursed expenses (wholly business) |
NOT assessable if solely for business |
| Education benefit for children |
Assessable as perquisite |
| Severance / long service payment |
Exempt up to statutory entitlement |
2.3 Deductions (IRO Sec. 12)
| Deduction |
Limit (2024/25) |
| Self-education expenses |
HK$100,000 |
| MPF mandatory contributions (employee) |
HK$18,000 |
| Approved charitable donations |
35% of assessable income |
| Elderly residential care expenses |
HK$100,000 |
| Home loan interest |
HK$100,000 (max 20 years of assessment) |
| Qualifying premiums (VHIS) |
HK$8,000 per insured person |
| Qualifying annuity premiums (QDAP) |
HK$60,000 |
| MPF voluntary contributions (TVC) |
HK$60,000 |
| Domestic rent deduction |
HK$100,000 |
Note: QDAP + TVC deduction combined cap = HK$60,000.
2.4 Rental Value of Quarters (IRO Sec. 9)
If employer provides housing:
- Rental value = 10% of net income (after other deductions) for a house/flat
- 8% for a service occupancy (hostel)
- 4% for hotel/boarding house
- If employer pays rent (not provides quarters): assessable as Place of Residence benefit, but capped at rent paid or 10% rental value, whichever lower
Section 3 -- Computation
3.1 Progressive Rate Calculation
A. ASSESSABLE INCOME
A1. Salary / wages / commission ___________
A2. Bonus / allowances ___________
A3. Rental value of quarters (10% of net) ___________
A4. Share option gains ___________
A5. Other perquisites ___________
A6. Total Assessable Income ___________
B. DEDUCTIONS (Section 12)
B1. MPF mandatory contributions (max $18,000) ___________
B2. Self-education expenses (max $100,000) ___________
B3. Charitable donations (max 35% of A6) ___________
B4. Home loan interest (max $100,000) ___________
B5. QDAP + TVC (combined max $60,000) ___________
B6. VHIS premiums (max $8,000 per person) ___________
B7. Domestic rent (max $100,000) ___________
B8. Total Deductions ___________
C. NET INCOME (A6 - B8) ___________
[Used for standard rate calculation]
D. ALLOWANCES
D1. Basic / Married ___________
D2. Child allowances ___________
D3. Dependent parent/grandparent ___________
D4. Other allowances ___________
D5. Total Allowances ___________
E. NET CHARGEABLE INCOME (C - D5) ___________
[Used for progressive rate calculation]
F. TAX COMPUTATION
F1. Progressive tax on E ___________
F2. Standard rate tax on C (15% on first $5M, 16% excess) ___________
F3. Tax payable = LOWER of F1 and F2 ___________
G. TAX REDUCTION (2024/25)
G1. 100% reduction, capped at $1,500 ___________
H. FINAL TAX (F3 - G1) ___________
I. PROVISIONAL TAX
I1. Less: provisional tax already paid for 2024/25 ___________
I2. Plus: provisional tax for 2025/26 ___________
I3. NET AMOUNT PAYABLE ___________
3.2 Worked Example -- Single Employee
| Item |
Amount (HK$) |
| Annual salary |
600,000 |
| Bonus |
50,000 |
| Total assessable income |
650,000 |
| Less: MPF mandatory (capped) |
(18,000) |
| Net income |
632,000 |
| Less: Basic allowance |
(132,000) |
| Net chargeable income |
500,000 |
Progressive tax:
- First 50,000 × 2% = 1,000
- Next 50,000 × 6% = 3,000
- Next 50,000 × 10% = 5,000
- Next 50,000 × 14% = 7,000
- Remaining 300,000 × 17% = 51,000
- Total progressive = 67,000
Standard rate: 632,000 × 15% = 94,800
Tax payable = lower = HK$67,000
Less 2024/25 reduction (100%, max $1,500): HK$65,500
3.3 Worked Example -- Married with Children
| Item |
Amount (HK$) |
| Annual salary |
1,200,000 |
| Total assessable income |
1,200,000 |
| Less: MPF mandatory (capped) |
(18,000) |
| Net income |
1,182,000 |
| Less: Married allowance |
(264,000) |
| Less: 2 children |
(260,000) |
| Net chargeable income |
658,000 |
Progressive tax:
- First 200,000 at bands = 16,000
- Remaining 458,000 × 17% = 77,860
- Total progressive = 93,860
Standard rate: 1,182,000 × 15% = 177,300
Tax payable = lower = HK$93,860
Less 2024/25 reduction: HK$92,360
Section 4 -- Filing
4.1 BIR60 (Tax Return -- Individuals)
| Item |
Detail |
| Form |
BIR60 (個別人士報稅表) |
| Issue date |
Usually first working day of May |
| Filing deadline (paper) |
1 month from date of issue (usually early June) |
| Filing deadline (eTAX) |
1 additional month (usually early July) |
| Extension |
Automatic if filed via eTAX; further extension with tax representative |
| Singed by |
Taxpayer (paper) or digital certificate/eTAX password (online) |
4.2 Provisional Salaries Tax (IRO Sec. 63E)
| Rule |
Detail |
| Basis |
Estimated at 100% of current year final tax |
| Payment |
In two instalments (75% + 25%) |
| First instalment |
Usually January |
| Second instalment |
Usually April |
| Holdover |
Can apply if income expected to drop >10% or allowances increase |
| Holdover deadline |
28 days before first instalment due or 14 days before second |
4.3 Objection and Appeal
| Step |
Deadline |
| Objection to assessment |
Within 1 month of Notice of Assessment |
| Form |
Written notice to Assessor stating grounds |
| Appeal to Board of Review |
Within 1 month of Commissioner's determination |
| Appeal to Court |
Within 1 month of Board's determination |
Section 5 -- Edge Cases
5.1 Non-Hong Kong Employment (Sec. 8(1A)(b))
If employment is exercised partly outside Hong Kong:
- Income is time-apportioned (HK days / total days)
- Only HK-sourced portion is assessable
- "60-day rule": visits totalling ≤60 days in a year = exempt
5.2 Lump Sum Payments (Sec. 11D)
- Gratuity, severance: assessable if connected to HK employment
- Retirement scheme lump sum: exempt if from recognised scheme and meets conditions
- Golden handshake: fully assessable
5.3 Personal Assessment (IRO Sec. 41)
Individuals may elect Personal Assessment to:
- Set off business losses against salaries income
- Claim home loan interest deduction
- Pool married couple's income for progressive rates
Requirements:
- Hong Kong permanent resident OR temporary resident for full year
- Married couple must both elect if one does
- May be beneficial when one spouse has losses/low income
5.4 Joint Assessment vs Separate Taxation (Married Couples)
| Method |
When Beneficial |
| Joint assessment |
One spouse has low/no income; unused allowances transfer |
| Separate taxation |
Both spouses have high income; standard rate applies separately |
| Personal assessment (joint) |
Business losses to offset; mortgage interest claim |
5.5 Domestic Rent Deduction (from 2022/23)
| Rule |
Detail |
| Cap |
HK$100,000 per year |
| Condition |
Taxpayer not provided with quarters by employer |
| Condition |
Property not owned by taxpayer or connected person |
| Condition |
Tenancy agreement registered with Rating and Valuation Department |
| Married |
Each spouse claims up to $100,000 if separate tenancies; or total $200,000 if joint assessment |
5.6 Tax Reduction History (Recent Years)
| Year of Assessment |
Reduction |
Ceiling |
| 2022/23 |
100% |
HK$6,000 |
| 2023/24 |
100% |
HK$3,000 |
| 2024/25 |
100% |
HK$1,500 |
| 2025/26 (proposed) |
100% |
HK$3,000 |
Section 6 -- Penalties and Surcharges
| Offence |
Penalty |
| Late filing without reasonable excuse |
Up to HK$10,000 + 3× tax undercharged (IRO Sec. 80(2)) |
| Failure to notify chargeability |
Fine up to HK$10,000 + 3× tax undercharged |
| Incorrect return |
Fine up to HK$10,000 + 3× tax undercharged; or on conviction HK$50,000 + imprisonment |
| Late payment surcharge |
5% immediately on overdue amount; additional 10% after 6 months |
| Fraud or wilful evasion |
Fine up to HK$50,000 + 3× tax + imprisonment up to 3 years |
Section 7 -- Key Dates Calendar
| Date |
Event |
| 1 April |
Start of Year of Assessment |
| Early May |
BIR60 issued by IRD |
| Early June |
Filing deadline (paper) |
| Early July |
Filing deadline (eTAX) |
| Oct--Nov |
Notice of Assessment issued |
| January |
First instalment of provisional tax due |
| 31 March |
End of Year of Assessment |
| April |
Second instalment of provisional tax due |
Section 8 -- Reference Material
| Topic |
Reference |
| Charge to salaries tax |
IRO Sec. 8 |
| Assessable income |
IRO Sec. 9 |
| Deductions |
IRO Sec. 12, 12AA, 12B, 12BA, 16AA, 26I, 26J |
| Allowances |
IRO Sec. 28--33 |
| Progressive rates |
IRO Schedule 2 |
| Standard rate |
IRO Sec. 12B / Schedule 2 |
| Provisional tax |
IRO Sec. 63--63J |
| Personal assessment |
IRO Sec. 41--43 |
| Domestic rent deduction |
IRO Sec. 26J |
| Two-tiered standard rate |
Inland Revenue (Amendment) (Taxation Proposals Relating to 2024-25 Budget) Ordinance |
| IRD official site |
ird.gov.hk |
| eTAX portal |
etax.ird.gov.hk |
| Salaries Tax computation guide |
DIPN No. 9 (Rev. 2024) |
Disclaimer
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a Hong Kong CPA, tax representative, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
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1---2name: hk-salaries-tax3description: > Use this skill whenever asked about Hong Kong salaries tax. Trigger on phrases like "Hong Kong tax", "salaries tax", "BIR60", "IRD", "net chargeable income", "standard rate", "progressive rate HK", "personal allowance Hong Kong", "provisional tax HK", "tax return Hong Kong", or any question about computing, filing, or planning salaries tax for an individual in Hong Kong. This skill covers progressive and standard rate calculations, allowances, deductions, provisional tax, and BIR60 filing. ALWAYS read this skill before advising on Hong Kong salaries tax.4license: AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (c5---67# Hong Kong Salaries Tax -- Skill v1.089> **General reference only.** This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.1011---1213## Section 1 -- Quick Reference1415| Field | Value |16|---|---|17| Country / Territory | Hong Kong SAR, China |18| Tax | Salaries Tax (薪俸稅) |19| Currency | HKD (Hong Kong Dollar) only |20| Year of Assessment | 1 April -- 31 March (2024/25 = 1 Apr 2024 -- 31 Mar 2025) |21| Primary legislation | Inland Revenue Ordinance (IRO), Cap. 112 |22| Tax authority | Inland Revenue Department (IRD) |23| Filing portal | ird.gov.hk / eTAX (etax.ird.gov.hk) |24| Filing deadline | 1 month from BIR60 issue (usually June/July); eTAX: 1 extra month |25| Validated by | Pending — requires sign-off by a Hong Kong CPA or tax representative |26| Skill version | 1.0 |2728### Tax Calculation Method2930Salaries tax is the LOWER of:311. **Progressive rates** on Net Chargeable Income (after deductions AND allowances)322. **Standard rate** on Net Income (after deductions but BEFORE allowances)3334### Progressive Tax Rates (2024/25 onwards)3536| Net Chargeable Income Band (HK$) | Rate | Tax in Band | Cumulative Tax |37|---|---|---|---|38| First 50,000 | 2% | 1,000 | 1,000 |39| Next 50,000 | 6% | 3,000 | 4,000 |40| Next 50,000 | 10% | 5,000 | 9,000 |41| Next 50,000 | 14% | 7,000 | 16,000 |42| Remainder | 17% | — | — |4344### Standard Rate (2024/25 onwards -- Two-Tiered)4546| Net Income (HK$) | Rate |47|---|---|48| First 5,000,000 | 15% |49| Exceeding 5,000,000 | 16% |5051### Personal Allowances (2024/25)5253| Allowance | Amount (HK$) |54|---|---|55| Basic allowance | 132,000 |56| Married person's allowance | 264,000 |57| Child allowance (each child) | 130,000 |58| Child allowance -- year of birth (additional) | 130,000 |59| Dependent parent/grandparent (aged 60+) | 50,000 |60| Dependent parent/grandparent (aged 60+, living together) | 100,000 |61| Dependent parent/grandparent (aged 55--59) | 25,000 |62| Dependent parent/grandparent (aged 55--59, living together) | 50,000 |63| Dependent brother/sister allowance | 37,500 |64| Single parent allowance | 132,000 |65| Disabled dependant allowance | 75,000 |66| Personal disability allowance | 75,000 |6768### Conservative Defaults6970| Ambiguity | Default |71|---|---|72| Unknown marital status | Apply basic allowance (HK$132,000) only |73| Unknown whether children qualify | Do not claim child allowance |74| Unknown dependent parent arrangement | Do not claim additional allowance for living together |75| MPF deduction cap | Apply HK$18,000 cap per employee |76| Unknown whether progressive or standard rate lower | Calculate both; apply lower |77| Tax reduction year | Apply 2024/25 reduction: 100%, ceiling HK$1,500 |7879---8081## Section 2 -- Rules8283### 2.1 Charge to Salaries Tax (IRO Sec. 8)8485Salaries tax is charged on every person in respect of income arising in or derived from Hong Kong from:86- Office or employment87- Pension88- Lump sum payments in connection with services rendered in Hong Kong8990### 2.2 Assessable Income9192| Component | Treatment |93|---|---|94| Salary, wages, commission | Fully assessable |95| Bonus (discretionary or contractual) | Fully assessable |96| Leave pay, end-of-contract gratuity | Fully assessable (time-apportioned if partly HK service) |97| Housing benefit (provided by employer) | Add rental value: 10% of net income (4% if hotel, 8% if hostel) |98| Share options/awards | Assessable at exercise/vesting (gain = market value - cost) |99| Employer MPF contributions | NOT assessable (exempt under IRO Sec. 8(1A)) |100| Reimbursed expenses (wholly business) | NOT assessable if solely for business |101| Education benefit for children | Assessable as perquisite |102| Severance / long service payment | Exempt up to statutory entitlement |103104### 2.3 Deductions (IRO Sec. 12)105106| Deduction | Limit (2024/25) |107|---|---|108| Self-education expenses | HK$100,000 |109| MPF mandatory contributions (employee) | HK$18,000 |110| Approved charitable donations | 35% of assessable income |111| Elderly residential care expenses | HK$100,000 |112| Home loan interest | HK$100,000 (max 20 years of assessment) |113| Qualifying premiums (VHIS) | HK$8,000 per insured person |114| Qualifying annuity premiums (QDAP) | HK$60,000 |115| MPF voluntary contributions (TVC) | HK$60,000 |116| Domestic rent deduction | HK$100,000 |117118**Note:** QDAP + TVC deduction combined cap = HK$60,000.119120### 2.4 Rental Value of Quarters (IRO Sec. 9)121122If employer provides housing:123- Rental value = 10% of net income (after other deductions) for a house/flat124- 8% for a service occupancy (hostel)125- 4% for hotel/boarding house126- If employer pays rent (not provides quarters): assessable as Place of Residence benefit, but capped at rent paid or 10% rental value, whichever lower127128---129130## Section 3 -- Computation131132### 3.1 Progressive Rate Calculation133134```135A. ASSESSABLE INCOME136 A1. Salary / wages / commission ___________137 A2. Bonus / allowances ___________138 A3. Rental value of quarters (10% of net) ___________139 A4. Share option gains ___________140 A5. Other perquisites ___________141 A6. Total Assessable Income ___________142143B. DEDUCTIONS (Section 12)144 B1. MPF mandatory contributions (max $18,000) ___________145 B2. Self-education expenses (max $100,000) ___________146 B3. Charitable donations (max 35% of A6) ___________147 B4. Home loan interest (max $100,000) ___________148 B5. QDAP + TVC (combined max $60,000) ___________149 B6. VHIS premiums (max $8,000 per person) ___________150 B7. Domestic rent (max $100,000) ___________151 B8. Total Deductions ___________152153C. NET INCOME (A6 - B8) ___________154 [Used for standard rate calculation]155156D. ALLOWANCES157 D1. Basic / Married ___________158 D2. Child allowances ___________159 D3. Dependent parent/grandparent ___________160 D4. Other allowances ___________161 D5. Total Allowances ___________162163E. NET CHARGEABLE INCOME (C - D5) ___________164 [Used for progressive rate calculation]165166F. TAX COMPUTATION167 F1. Progressive tax on E ___________168 F2. Standard rate tax on C (15% on first $5M, 16% excess) ___________169 F3. Tax payable = LOWER of F1 and F2 ___________170171G. TAX REDUCTION (2024/25)172 G1. 100% reduction, capped at $1,500 ___________173174H. FINAL TAX (F3 - G1) ___________175176I. PROVISIONAL TAX177 I1. Less: provisional tax already paid for 2024/25 ___________178 I2. Plus: provisional tax for 2025/26 ___________179 I3. NET AMOUNT PAYABLE ___________180```181182### 3.2 Worked Example -- Single Employee183184| Item | Amount (HK$) |185|---|---|186| Annual salary | 600,000 |187| Bonus | 50,000 |188| Total assessable income | 650,000 |189| Less: MPF mandatory (capped) | (18,000) |190| Net income | 632,000 |191| Less: Basic allowance | (132,000) |192| Net chargeable income | 500,000 |193194Progressive tax:195- First 50,000 × 2% = 1,000196- Next 50,000 × 6% = 3,000197- Next 50,000 × 10% = 5,000198- Next 50,000 × 14% = 7,000199- Remaining 300,000 × 17% = 51,000200- Total progressive = **67,000**201202Standard rate: 632,000 × 15% = **94,800**203204Tax payable = lower = **HK$67,000**205Less 2024/25 reduction (100%, max $1,500): **HK$65,500**206207### 3.3 Worked Example -- Married with Children208209| Item | Amount (HK$) |210|---|---|211| Annual salary | 1,200,000 |212| Total assessable income | 1,200,000 |213| Less: MPF mandatory (capped) | (18,000) |214| Net income | 1,182,000 |215| Less: Married allowance | (264,000) |216| Less: 2 children | (260,000) |217| Net chargeable income | 658,000 |218219Progressive tax:220- First 200,000 at bands = 16,000221- Remaining 458,000 × 17% = 77,860222- Total progressive = **93,860**223224Standard rate: 1,182,000 × 15% = **177,300**225226Tax payable = lower = **HK$93,860**227Less 2024/25 reduction: **HK$92,360**228229---230231## Section 4 -- Filing232233### 4.1 BIR60 (Tax Return -- Individuals)234235| Item | Detail |236|---|---|237| Form | BIR60 (個別人士報稅表) |238| Issue date | Usually first working day of May |239| Filing deadline (paper) | 1 month from date of issue (usually early June) |240| Filing deadline (eTAX) | 1 additional month (usually early July) |241| Extension | Automatic if filed via eTAX; further extension with tax representative |242| Singed by | Taxpayer (paper) or digital certificate/eTAX password (online) |243244### 4.2 Provisional Salaries Tax (IRO Sec. 63E)245246| Rule | Detail |247|---|---|248| Basis | Estimated at 100% of current year final tax |249| Payment | In two instalments (75% + 25%) |250| First instalment | Usually January |251| Second instalment | Usually April |252| Holdover | Can apply if income expected to drop >10% or allowances increase |253| Holdover deadline | 28 days before first instalment due or 14 days before second |254255### 4.3 Objection and Appeal256257| Step | Deadline |258|---|---|259| Objection to assessment | Within 1 month of Notice of Assessment |260| Form | Written notice to Assessor stating grounds |261| Appeal to Board of Review | Within 1 month of Commissioner's determination |262| Appeal to Court | Within 1 month of Board's determination |263264---265266## Section 5 -- Edge Cases267268### 5.1 Non-Hong Kong Employment (Sec. 8(1A)(b))269270If employment is exercised partly outside Hong Kong:271- Income is time-apportioned (HK days / total days)272- Only HK-sourced portion is assessable273- "60-day rule": visits totalling ≤60 days in a year = exempt274275### 5.2 Lump Sum Payments (Sec. 11D)276277- Gratuity, severance: assessable if connected to HK employment278- Retirement scheme lump sum: exempt if from recognised scheme and meets conditions279- Golden handshake: fully assessable280281### 5.3 Personal Assessment (IRO Sec. 41)282283Individuals may elect Personal Assessment to:284- Set off business losses against salaries income285- Claim home loan interest deduction286- Pool married couple's income for progressive rates287288Requirements:289- Hong Kong permanent resident OR temporary resident for full year290- Married couple must both elect if one does291- May be beneficial when one spouse has losses/low income292293### 5.4 Joint Assessment vs Separate Taxation (Married Couples)294295| Method | When Beneficial |296|---|---|297| Joint assessment | One spouse has low/no income; unused allowances transfer |298| Separate taxation | Both spouses have high income; standard rate applies separately |299| Personal assessment (joint) | Business losses to offset; mortgage interest claim |300301### 5.5 Domestic Rent Deduction (from 2022/23)302303| Rule | Detail |304|---|---|305| Cap | HK$100,000 per year |306| Condition | Taxpayer not provided with quarters by employer |307| Condition | Property not owned by taxpayer or connected person |308| Condition | Tenancy agreement registered with Rating and Valuation Department |309| Married | Each spouse claims up to $100,000 if separate tenancies; or total $200,000 if joint assessment |310311### 5.6 Tax Reduction History (Recent Years)312313| Year of Assessment | Reduction | Ceiling |314|---|---|---|315| 2022/23 | 100% | HK$6,000 |316| 2023/24 | 100% | HK$3,000 |317| 2024/25 | 100% | HK$1,500 |318| 2025/26 (proposed) | 100% | HK$3,000 |319320---321322## Section 6 -- Penalties and Surcharges323324| Offence | Penalty |325|---|---|326| Late filing without reasonable excuse | Up to HK$10,000 + 3× tax undercharged (IRO Sec. 80(2)) |327| Failure to notify chargeability | Fine up to HK$10,000 + 3× tax undercharged |328| Incorrect return | Fine up to HK$10,000 + 3× tax undercharged; or on conviction HK$50,000 + imprisonment |329| Late payment surcharge | 5% immediately on overdue amount; additional 10% after 6 months |330| Fraud or wilful evasion | Fine up to HK$50,000 + 3× tax + imprisonment up to 3 years |331332---333334## Section 7 -- Key Dates Calendar335336| Date | Event |337|---|---|338| 1 April | Start of Year of Assessment |339| Early May | BIR60 issued by IRD |340| Early June | Filing deadline (paper) |341| Early July | Filing deadline (eTAX) |342| Oct--Nov | Notice of Assessment issued |343| January | First instalment of provisional tax due |344| 31 March | End of Year of Assessment |345| April | Second instalment of provisional tax due |346347---348349## Section 8 -- Reference Material350351| Topic | Reference |352|---|---|353| Charge to salaries tax | IRO Sec. 8 |354| Assessable income | IRO Sec. 9 |355| Deductions | IRO Sec. 12, 12AA, 12B, 12BA, 16AA, 26I, 26J |356| Allowances | IRO Sec. 28--33 |357| Progressive rates | IRO Schedule 2 |358| Standard rate | IRO Sec. 12B / Schedule 2 |359| Provisional tax | IRO Sec. 63--63J |360| Personal assessment | IRO Sec. 41--43 |361| Domestic rent deduction | IRO Sec. 26J |362| Two-tiered standard rate | Inland Revenue (Amendment) (Taxation Proposals Relating to 2024-25 Budget) Ordinance |363| IRD official site | ird.gov.hk |364| eTAX portal | etax.ird.gov.hk |365| Salaries Tax computation guide | DIPN No. 9 (Rev. 2024) |366367---368369## Disclaimer370371This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a Hong Kong CPA, tax representative, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.372373The most up-to-date, verified version of this skill is maintained at [openaccountants.com](https://openaccountants.com). Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.374375---376377_Source: [OpenAccountants](https://openaccountants.com/skills/hk-salaries-tax) — open tax Guides for AI, reviewed by named CPAs/CAs/EAs. Quality: **source-cited draft**. For always-current figures and named-accountant backing, connect the OpenAccountants MCP server (`openaccountants-mcp`)._
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