What are the personal allowances for Hong Kong salaries tax?
For 2025/26 the basic allowance is HK$132,000, married person's HK$264,000 and each child HK$130,000. From 2026/27 these rise to HK$145,000, HK$290,000 and HK$140,000 respectively, under the 2026-27 Budget law gazetted on 22 May 2026. The IRD applies new amounts to provisional tax automatically.
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 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
- Inland Revenue Ordinance (Cap. 112), Part 4 (allowances)
Sources
Applies to YA 2025/26 and 2026/27 · Last reviewed 29 October 2026
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.
Related questions
- Does Hong Kong have VAT, GST or sales tax?No. Hong Kong has no value-added tax, goods and services tax or sales tax. The only taxes on income are profits tax, salaries tax and property tax, plus duties such as stamp duty. The government also confirms there is no capital gains tax and no withholding tax on dividends or interest.
- What is the profits tax rate for a Hong Kong company?Under the two-tiered system, a corporation pays 8.25% on its first HK$2 million of assessable profits and 16.5% on the rest. The lower rate is available to only one entity in a group of connected entities. This applies from year of assessment 2018/19 onwards.
- What profits tax rate do sole proprietors and partnerships pay in Hong Kong?Unincorporated businesses pay 7.5% on the first HK$2 million of assessable profits and 15% on the remainder, from year of assessment 2018/19. This is the two-tiered system. As with companies, only one entity in a group of connected entities can use the lower rate.
- What are the salaries tax rates in Hong Kong?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.
- How does property tax work for rental income in Hong Kong?Property tax is charged on the owner of land or buildings in Hong Kong at the standard rate of 15% on net assessable value. Net assessable value is the rent received less rates paid by the owner and a 20% statutory allowance for repairs and outgoings. Companies that rent property are usually under profits tax instead.