In this course · 2 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 the progressive scale is 2%, 6%, 10%, 14% on successive HK$50,000 bands, then 17% on the rest. Tax cannot exceed the standard rate on net income before allowances: 15% on the first HK$5 million and 16% above. The lower of the two results applies.
Progressive rates (on net chargeable income, after deductions and allowances; the same since 2019/20):
| Net chargeable income | Rate |
|---|---|
| First HK$50,000 | 2% |
| Next HK$50,000 | 6% |
| Next HK$50,000 | 10% |
| Next HK$50,000 | 14% |
| Remainder | 17% |
Standard rate (on net income without allowances), which caps the tax:
- 2019/20 to 2023/24: 15%.
- 2024/25 onwards: 15% on the first HK$5 million, 16% on the rest.
The taxpayer pays whichever method gives the lower tax.
Tax reduction. For 2025/26 the final tax is reduced by 100% up to HK$3,000 (the 2026-27 Budget). Earlier years had different ceilings.
Provisional salaries tax is charged in the year based on the preceding year, with holdover available on set grounds if income falls (see the answer on holding over provisional tax).
The Government's tax policy statement describes salaries tax as capped at 15%, but the Inland Revenue Department's (IRD's) guide shows the two-tier 15%/16% standard rate from 2024/25, so use the IRD's rates for filing.
Legal basis and sources
The law
- Inland Revenue Ordinance (Cap. 112), Schedule 2
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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