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According to the Hong Kong territorial tax system, all income arising in or derived from Hong Kong from any office, employment or pension is taxable in Hong Kong. In deciding whether income arises in or is derived from Hong Kong, it is necessary to establish where the source of income is located. Consequently, a person is exempted from salaries tax on his/her income which has not been derived from Hong Kong.
“Income from any office and employment” may include different forms of advantages and allowances in monetary and non-monetary terms from the employer or any associated company of the employer.
A husband and wife who are not living apart may elect to be jointly assessed for salaries tax on their aggregated income.
Salaries tax is charged on net taxable income at the lower of the standard rate of 15 percent or at progressive rates as follows (2022/23):
HK$0 - HK$50,000 2%
HK$50,001 - HK$100,000 6%
HK$100001 - HK$150,000 10%
HK$150,001 - HK$200,000 14%
Above HK$200,000 17%
Personal allowances for the year of assessment 2022/2023 can be claimed by taxpayers before determining the salary tax to be paid according to progressive rates.
Allowances applicable to progressive rate taxpayers are as follows:
► Single 132,000 HKD
► Married 264,000 HKD
► Single parent allowance 132,000 HKD