In this course · 3 of 7
Course 6
Report your staff to IRD
7 lessons · 7 min
- 1How is a director's salary or fee taxed in Hong Kong?
- 2What are the salaries tax rates in Hong Kong?
- 3What are the personal allowances for Hong Kong salaries tax?
- 4Are MPF contributions tax deductible in Hong Kong?
- 5What is the deadline for the Hong Kong employer's return (BIR56A, IR56B)?
- 6When must I notify the IRD that I have hired a new employee (IR56E)?
- 7Employee resigning or leaving Hong Kong: do I file IR56F or IR56G?
The short answer
For 2025/26 Hong Kong salaries tax gives a basic allowance of HK$132,000, a married person's allowance of HK$264,000 and HK$130,000 for each child. From 2026/27 these rise to HK$145,000, HK$290,000 and HK$140,000 under the 2026-27 Budget law gazetted on 22 May 2026.
Allowances reduce your net chargeable income before the progressive rates apply.
| Allowance | 2025/26 | From 2026/27 |
|---|---|---|
| Basic | HK$132,000 | HK$145,000 |
| Married person's | HK$264,000 | HK$290,000 |
| Single parent | HK$132,000 | HK$145,000 |
| Child (each, 1st to 9th) | HK$130,000 | HK$140,000 |
| Dependent parent/grandparent (60+ or on disability allowance) | HK$50,000 | HK$55,000 |
| Dependent parent/grandparent (55 to 59) | HK$25,000 | HK$27,500 |
Additional allowances for parents living with you rise by the same amounts.
Other 2026-27 changes
- The elderly residential care expenses deduction ceiling goes from HK$100,000 to HK$110,000 from 2026/27.
- The extra allowance for a newborn child can be claimed for the first two years (not one) for children born on or after 1 April 2025, from 2026/27.
Process. The legislation passed on 13 May 2026 and was gazetted on 22 May 2026. Taxpayers need not apply; the Inland Revenue Department (IRD) applies the new amounts in calculating 2026/27 provisional salaries tax. You still complete your 2025/26 return as usual.
Allowances apply to individuals, including owner-directors who report salary. They do not reduce profits tax of a company.
Legal basis and sources
The law
- Inland Revenue Ordinance (Cap. 112), Part 4 (allowances)
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
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