How is a director's salary or fee taxed in Hong Kong?

Salaries tax is charged on income arising in or derived from an office or employment in Hong Kong, including salary, fees, bonuses, and benefits in kind. A director holds an office, so director's fees are included, as are directors who also work as employees.

How the tax is computed

1. Take total assessable income (salary, bonus, fees, plus the taxable value of housing or other benefits).
2. Subtract allowable deductions (such as qualifying Mandatory Provident Fund (MPF) contributions, charitable donations, home loan interest, domestic rent, and so on).
3. Subtract personal allowances to get net chargeable income.
4. Tax is the lower of:
   • progressive rates on net chargeable income, or
   • the standard rate on net income before allowances.

Tax return and employer reporting. The company reports the director's pay on Form IR56B within the employer's return. The individual files a Tax Return for Individuals (BIR60). Salaries tax is first charged provisionally and then adjusted.

Reductions for 2025/26. The one-off 100% reduction of final salaries tax, capped at HK$3,000 per person (or per jointly assessed couple), applies for 2025/26.

Overseas directors. Under the Inland Revenue Department's (IRD's) practice note, director's fees are taxable in Hong Kong if the company's central management and control is exercised here, wherever the director lives or works. Fees of a director of a company managed from elsewhere depend on where that office is located.