Salary tax

SALARIES TAX

General information

Taxpayers have the obligation to file their tax returns correctly. For salaries tax purposes, they have to report their income from any employment and office in the relevant period specified in their tax returns for individuals (BIR60).

IRD normally issue tax returns for individuals in May, and the return has to be filed to IRD within 1 month from the date of issue of the Tax Return, expect for you appointed a tax representative to apply the extension of time for submission.

Late filing of tax return, it is an offence. It will lead to a fine or even prosecutions.

Basis period

From 1 April to 31 March of the following year.

Tax calculation

Tax payable is calculated at progressive rates on their net chargeable income or at standard rate on their net income (before deduction of the allowances), whichever is lower.

Net Chargeable Income = Total Income – Deductions – Allowances

Tax Rate Allowances Deductions – Maximum Limits

Tax Rate

Year of assessment
Net chargeable income		 2008/09 To 2012/13 Tax HK$
On the first $40,000 2% 800
On the next $40,000 7% 2,800
On the next $40,000 12% 4,800
Remainder 17%
Standard rates of tax 15%

Allowances

Year of assessment 2010/11 To 2011/12 2012/13 2012/13 2013/14* onwards
HK$ HK$ HK$ HK$
Basic Allowance 108,000 120,000 120,000 120,000
Basic Allowance 108,000 120,000 120,000 120,000
Basic Allowance 108,000 120,000 120,000 120,000
Basic Allowance 108,000 120,000 120,000 120,000
Married Person’s Allowance 216,000 240,000 240,000 240,000
Child Allowance (1 st to 9 child) 50,000 63,000 63,000 70,000
Dependent Parent / Grandparent Allowance aged 60 or above 30,000 38,000 38,000 38,000
Dependent Parent / Grandparent Allowance aged 55 to 60 15,000 19,000 19,000 19,000
Additional Dependent Parent / Grandparent Allowance aged 60 or above 30,000 38,000 38,000 38,000
Single Parent Allowance 108,000 120,000 120,000 120,000

Deductions – Maximum Limits

Year of assessment 2008/09 To 2010/11 2011/12 2012/13 2013/14* onwards
HK$ HK$ HK$ HK$
Expenses of Self-Education 60,000 60,000 60,000 80,000
Elderly Residential Care Expenses 60,000 72,000 76,000 76,000
Home Loan Interest 100,000 100,000 100,000 100,000
Mandatory Contributions to Recognized Retirement Schemes 12,000 12,000 12,000 12,000
Approved Charitable Donations (Income – Allowable expenses) X Percentage 35% 35% 35% 35%
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