How Hong Kong salaries tax is calculated: a 2026/27 worked example
Hong Kong charges salaries tax on income from employment for a year of assessment that runs from 1 April to 31 March. This guide takes a salary of HK$480,000 through the IRD steps for the 2026/27 year (1 April 2026 to 31 March 2027) for a single person, a married person and a single person with two children. The IRD bills the tax afterwards, and provisional tax for a year is usually based on the income of the year before.
The two ways tax is worked out
Salaries tax is chargeable on the smaller of two amounts. The first is the tax on net chargeable income, which is total income less deductions less allowances, at progressive rates. The second is the tax on net total income, which is total income less deductions only, at the standard rate of 15% on the first HK$5,000,000 and 16% on the rest. The progressive rates are:
| Net chargeable income above | Tax rate on the next dollar | Tax on income up to that point |
|---|---|---|
| HK$0 | 2% | HK$0 |
| HK$50,000 | 6% | HK$1,000 |
| HK$100,000 | 10% | HK$4,000 |
| HK$150,000 | 14% | HK$9,000 |
| HK$200,000 | 17% | HK$16,000 |
Each rate applies only to the part of income inside its own band. The IRD prints this table under the heading 2025/26 and uses the same bands in its 2026/27 provisional tax example.
Step 1: deductions and allowances
The deduction used here is the employee MPF, limited to HK$18,000 a year. The allowances from the 2026/27 year are HK$145,000 for the basic allowance, HK$290,000 for the married person's allowance and HK$140,000 for each child. These amounts were raised from HK$132,000 for the basic allowance in 2025/26. Other deductions and allowances exist (dependent parents, home loan interest, rent, donations and others) and this calculator does not include them.
Step 2: a worked example
A salary of HK$480,000, paid as HK$40,000 a month. The MPF is HK$18,000 because the monthly pay is above the HK$30,000 maximum. This is the same arithmetic as the IRD's own provisional tax example in its guide, which reaches HK$35,890 for a single person on HK$40,000 a month.
| Step | Single | Married | Single, 2 children |
|---|---|---|---|
| Salary for 2026/27 | HK$480,000 | HK$480,000 | HK$480,000 |
| Less MPF deduction | HK$18,000 | HK$18,000 | HK$18,000 |
| Net total income | HK$462,000 | HK$462,000 | HK$462,000 |
| Less allowances | HK$145,000 | HK$290,000 | HK$425,000 |
| Net chargeable income | HK$317,000 | HK$172,000 | HK$37,000 |
| Tax at progressive rates | HK$35,890.00 | HK$12,080.00 | HK$740.00 |
| Tax at the standard rate on net total income | HK$69,300.00 | HK$69,300.00 | HK$69,300.00 |
| Salaries tax (the smaller) | HK$35,890.00 | HK$12,080.00 | HK$740.00 |
| Share of salary paid as tax | 7.48% | 2.52% | 0.15% |
For the single person, the net chargeable income of HK$317,000 is taxed by band:
| Band of net chargeable income | Amount in the band | Rate | Tax |
|---|---|---|---|
| HK$0 to HK$50,000 | HK$50,000 | 2% | HK$1,000.00 |
| HK$50,000 to HK$100,000 | HK$50,000 | 6% | HK$3,000.00 |
| HK$100,000 to HK$150,000 | HK$50,000 | 10% | HK$5,000.00 |
| HK$150,000 to HK$200,000 | HK$50,000 | 14% | HK$7,000.00 |
| HK$200,000 to HK$317,000 | HK$117,000 | 17% | HK$19,890.00 |
| Total | HK$317,000 | HK$35,890.00 |
The last dollars are taxed at 17%, but the tax as a share of salary is 7.48%. The standard rate would give HK$69,300.00, so the progressive amount is used. With the married person's allowance the net chargeable income is HK$172,000 and the tax HK$12,080.00; the IRD's example for the same income and a HK$290,000 allowance is HK$12,080. Two children take HK$280,000 more off, to HK$37,000 and HK$740.00.
When the standard rate is lower
The progressive top rate of 17% is above the standard 15%, so the standard rate wins once income is high enough. For a single person with only the basic allowance that happens above a net total income of about HK$2,132,500; with the married person's allowance, about HK$3,365,000. On HK$1,200,000 the progressive tax of HK$158,290.00 is still lower than the standard-rate figure of HK$177,300.00.
When the tax is paid
The IRD sends a demand note. In its worked example the 2026/27 provisional tax is paid in two instalments, 75% around January 2027 and 25% around April 2027, together with any balance of the previous year's tax. The one-off 100% reduction of 2025/26 tax, capped at HK$3,000, belongs to that earlier year and is not applied to 2026/27 here. A fair planning figure is the yearly tax divided by twelve: HK$2,991 a month in this example. That planning figure is how the calculator is built, and it is not an IRD rule.
Not included: joint assessment, deductions other than MPF, allowances other than the three above, and rounding of net chargeable income by the IRD.
Work out your own salaries taxSources
- IRD: A guide to Salaries Tax (1) (rates, standard rate, worked examples)
- IRD: 2026-27 Budget (allowance amounts from 2026/27)
- IRD: FAQ on the Mandatory Provident Fund (MPF deduction limit)
- Every rate used, with its source and check date: Sources and rates
This calculator is general information only. It uses the IRD and MPFA pages listed on the Sources page, and your payslip, tax bill and personal situation may differ. Rates as at 2 November 2026.