Hong Kong Salaries Tax for New Arrivals: Filing, Allowances | migration.hk

Hong Kong salaries tax primer for new arrivals: scope, 2025/26 and 2026/27 allowances and deductions, BIR60 filing deadline and first-year procedures.

Hong Kong Salaries Tax for New Arrivals: Filing, Allowances

Hong Kong salaries tax is levied on a territorial source basis. New arrivals who are employed in Hong Kong will generally have their income charged to salaries tax in full. The tax year runs from 1 April each year to 31 March of the following year, and the Individual Tax Return (BIR60) is normally issued in May each year. This article compiles the salaries tax rules, allowances, deductible items and filing procedures published by the Inland Revenue Department (IRD) and GovHK as at 7 October 2026. See Salaries Tax and Personal Assessment.

What Income Is Subject to Salaries Tax?

Hong Kong taxes on a territorial source basis. Any income arising from an office, employment or pension that is sourced in or derived from Hong Kong is chargeable to salaries tax, regardless of whether tax has already been paid in another tax jurisdiction.

The Inland Revenue Department (IRD) notes that employment income derived from Hong Kong may be chargeable to tax in Hong Kong regardless of whether the person is a Hong Kong resident.

Chargeable Income

The income that must be reported on the BIR60 is quite broad. When filing, you should enter income before deducting Mandatory Provident Fund (MPF) contributions, including salary, wages, directors’ fees, commissions, bonuses, pay in lieu of leave, end-of-contract gratuities, allowances and perquisites, tips, rental value of a place of residence, share awards and the like.

Allowances, additional rewards and perquisites provided by an employer are also chargeable. These include cash allowances, an employer meeting an employee’s personal legal obligations, benefits convertible into money, education benefits and holiday journey benefits.

Non-chargeable Income

Certain payments are not chargeable. Severance payments or long service payments received under the Employment Ordinance are not chargeable, but the portion exceeding the statutory amount is chargeable; jury allowances need not be reported.

Salaries Tax Rates and Allowances

The tax year runs from 1 April each year to 31 March of the following year. Salaries tax is computed either on the net chargeable income at progressive rates, or on the net income at the standard rate, and the lower of the two tax amounts is charged.

Progressive and Standard Rates

The progressive rates apply from the 2020/21 tax year onwards until replaced. The rate bands are as follows:

Net chargeable income	Rate	Tax
First 50,000	2%	1,000
Next 50,000	6%	3,000
Next 50,000	10%	5,000
Next 50,000	14%	7,000
Remainder	17%	—

From the 2024/25 tax year onwards, the standard rate is a two-tier system. The first HK$5,000,000 of net income is taxed at 15%, and the remainder at 16%.

The tax payable is calculated using the following formula. Net chargeable income equals income less total deductions and total allowances; the tax payable may be further reduced by a tax concession, subject to the concession ceiling. Readers may use the Salaries Tax and Personal Assessment calculator service to estimate.

2025/26 and 2026/27 Allowances Compared

Allowances are divided into two groups: 2025/26 and 2026/27 onwards. From 2026/27, a number of allowances have been raised. The main allowances are as follows:

Allowance	2025/26	2026/27 and thereafter
Basic allowance	132,000	145,000
Married person’s allowance	264,000	290,000
Child allowance (first to ninth, each)	130,000	140,000
Single parent allowance	132,000	145,000
Dependant parent/grandparent aged 60 or above (or eligible to claim under the Government Disability Allowance Scheme) (each)	50,000	55,000
Dependant parent/grandparent aged 55 to under 60 (each)	25,000	27,500
Dependant sibling (each)	37,500	37,500
Disabled person’s allowance	75,000	75,000
Disabled dependant allowance (each)	75,000	75,000

A dependant parent/grandparent who co-resides with the taxpayer throughout the whole year qualifies for an additional allowance. The additional allowance amount is the same as the age-related allowance above.

Child and Newborn Baby Additional Allowance

From the 2026/27 tax year, each child is entitled to double the allowance for the first two years after birth. Based on the 2026/27 child allowance of HK$140,000 (i.e. HK$140,000), the doubled amount is HK$280,000, applicable to all children under two years of age at the end of that tax year (i.e. born on or after 1 April 2025).

How to Claim Allowances

The types of allowance that may be claimed include married person, child, dependant sibling, dependant parent and grandparent, single parent, disabled dependant and disabled person. Claims are generally made on the BIR60, and may also be made in writing within six years after the end of the relevant tax year; alternatively, Form IR831 may be completed and returned to the IRD. No supporting documents need to be submitted with the tax return or claim form, but they must be kept for inspection.

What Items Can Be Deducted?

Supporting receipts and records for deductions must be kept for six years. The retention period runs from the end of the relevant tax year, and no supporting documents need to be attached when submitting the BIR60.

The main deductible items and maximum deduction amounts are as follows:

Deduction item	Maximum deduction	Applicable year
MPF scheme mandatory contributions (per employee)	18,000	2020/21 and thereafter
Tax-deductible MPF voluntary contributions and qualifying annuity premiums (combined)	60,000	2020/21 and thereafter
Voluntary Health Insurance Scheme qualifying premiums (per insured person)	8,000	2020/21 and thereafter
Home loan interest (basic)	100,000	2024/25 and thereafter
Home loan interest (additional for co-residing with child)	20,000	2024/25 and thereafter
Domestic rent (basic)	100,000	from 2022/23
Domestic rent (additional for co-residing with child)	20,000	from 2024/25
Self-education expenses	100,000	from 2017/18
Elderly residential care expenses	110,000	from 2026/27
Approved charitable donations	Total not less than 100; not exceeding 35% of income after deductible expenses and depreciation allowances	—

MPF and Pension Contributions

An employee may deduct the mandatory contributions to an MPF scheme. The maximum deduction per tax year is HK$18,000; even with two employments and two contributions, the combined deduction remains capped at HK$18,000.

The specified maximum deduction for tax-deductible MPF voluntary contributions (TVC) combined with qualifying annuity premiums is HK$60,000. The TVC account holder must be the taxpayer themselves, and may only claim a deduction for voluntary contributions made by themselves.

Home Loan Interest and Domestic Rent

The basic ceiling for the home loan interest deduction is HK$100,000. Those who co-reside with a child and meet the conditions may have an additional deduction ceiling of HK$20,000, making a total of HK$120,000; the basic conditions include being the owner of the residential property, and the property being situated in Hong Kong and used as a dwelling.

The basic ceiling for the domestic rent deduction is HK$100,000, which may be increased to HK$120,000 for those co-residing with a child and meeting the conditions. The taxpayer must have entered into a written tenancy for the exclusive use of the residential premises, and the tenancy must be stamped under the Stamp Duty Ordinance. If the employer provides accommodation or pays/refunds the rent, or the taxpayer (or co-residing spouse) is the owner of a Hong Kong residential premises, the rent cannot be deducted. Each taxpayer may be allowed the enhanced deduction for a total of 19 tax years.

Other Deductions

Under the Voluntary Health Insurance Scheme, the specified maximum deduction for qualifying premiums per insured person is HK$8,000. Self-education expenses must be for enrolling in a designated education course, with a maximum deduction of HK$100,000, to be claimed in the tax year in which the payment is made. The total of approved charitable donations must be not less than HK$100, and the deduction must not exceed 35% of income after deductible expenses and depreciation allowances. The deductible ceiling for elderly residential care expenses has been raised from HK$100,000 to HK$110,000 from 2026/27.

Tax Treatment for Travel Between Hong Kong and Elsewhere

The vast majority of people working in Hong Kong are engaged in “Hong Kong employment”. Such persons’ income is first treated in full as chargeable income.

Hong Kong Employment and Non-Hong Kong Employment

Where the source of the employment is Hong Kong (e.g. employed by a Hong Kong company and working in Hong Kong), all income is chargeable to salaries tax even if part of the duties is performed outside Hong Kong. However, an exemption from tax or a tax concession may be applied for annually.

Three factors are considered in determining the source of the employment. These are: where the contract is negotiated, concluded and executed; the residence of the employer; and where the remuneration is paid. If all three are outside Hong Kong, it is generally regarded as sourced outside Hong Kong; the IRD reserves the right to consider other circumstances in individual cases.

Where the source of the employment is outside Hong Kong (e.g. assigned to work in Hong Kong for several years by a non-Hong Kong employer), the IRD assesses tax only on the income derived from services rendered in Hong Kong. Generally this is calculated by the number of days spent in Hong Kong in each tax year.

Apportionment by Days of Stay

When apportioning the whole year’s income by days of stay in Hong Kong, the date of departure and the date of arrival together count as one day. Official example: in a tax year with an annual salary of HK$365,000 and 100 days in Hong Kong, the assessable income is HK$365,000 × 100/365 = HK$100,000.

Exemption for Visits to Hong Kong Not Exceeding 60 Days

If all services are rendered outside Hong Kong during the relevant tax year, the entire income may be exempted. If the total visit to Hong Kong does not exceed 60 days, the income may still be fully exempted even if services were rendered in Hong Kong during that time. This exemption is generally available to persons in “Hong Kong employment” or “non-Hong Kong employment”, but does not apply to government employees, ship crew or aircraft crew.

“Visiting Hong Kong” means a brief or temporary stay. The “days physically present” method is used to determine whether the 60-day limit is exceeded; even if not present for a full day, it counts as one day, and the date of arrival and the date of departure count as two days (different from the apportionment method).

Applying for an exemption from tax generally requires submitting relevant information. Persons in non-Hong Kong employment usually need to submit employer details, a copy of the employment contract (stating where it was negotiated and concluded and the governing law), remuneration details and place of payment, and a full-year itinerary of travel to and from Hong Kong.

Treatment of Tax Already Paid Elsewhere

From the 2018/19 tax year, the income exemption under section 8(1A)(c) no longer applies to income derived from services rendered in a “territory with a double taxation arrangement”. Relief from double taxation for such income may only be claimed by way of a tax credit under section 50.

For further discussion on tax residency status, see Hong Kong and Mainland tax residency conflict.

What New Arrivals Must Do in Their First Year?

The first step for new arrivals in tax filing is to watch out for whether they receive the BIR60. The Individual Tax Return (BIR60) is normally issued on the first working day of May each year.

Issuance and Deadline of the BIR60 Tax Return

Taxpayers without a sole proprietorship business must return the form within one month from the date of issue. Filing the 2025/26 tax year return electronically automatically grants an additional one-month grace period; sole proprietors must return it within three months.

Even if there is no income to report, a BIR60 received must still be completed and submitted on time. Late submission may result in an estimated assessment and may be subject to penalties or prosecution.

A paper tax return must be submitted as the original. The IRD does not accept photocopies or returns submitted by fax, and encourages electronic filing; online submission can be made via File Individual Tax Return BIR60 (online portal).

What If You Have Not Received a Tax Return?

A person who is chargeable to tax but has not received a tax return must proactively notify the IRD. The notification must be made in writing within four months after the end of the basis period of the relevant tax year (for salaries tax, by 31 July or before), using Form IR6167.

Reporting Obligations of Employers and Employees

Employers bear an independent reporting obligation. The Employer’s Return BIR56A and one IR56B for each employee are normally issued on the first working day of April each year, and the employer must return them within one month from the date of issue.

Newly hired employees must be reported by the employer. The employer must submit Form IR56E for each new employee within three months of the commencement of employment.

Any change of address should be notified to the IRD as soon as possible. If you are going to leave Hong Kong for more than one month, you should notify the IRD one month before departure.

Those who come to work in Hong Kong via the Top Talent Pass Scheme (TTPS), the Quality Migrant Admission Scheme (QMAS) or the Immigration Arrangements for Non-local Graduates (IANG) may first refer to the first-week arrival checklist — bank account opening, renting, MPF enrolment and tax file number upon arrival, before following up on salaries tax filing.

Opening an “eTAX” Account

An “eTAX” “Individual Taxpayer Portal” (ITP) account can be used to check tax status and handle tax matters. Logging in requires a tax file number and ITP passcode, or a personal digital certificate issued by a recognised certification authority.

Tax Demand Notes, Tax Returns and Deadlines

The provisional salaries tax for each year is assessed on the prior year’s income less deductions (and allowances). Provisional tax is a prepayment assessed on the prior year’s income, later adjusted according to actual circumstances; it is not an additional charge.

Provisional Tax and Tax Demand Notes

Most taxpayers start receiving their tax demand notes in the third quarter of each year. Persons assessed as not liable to pay tax will not be issued an assessment notice; the assessment notice states the deadline for lodging an objection and the final date for applying to hold over payment of provisional tax.

Joint and Separate Assessment

Married persons and their spouses are separately assessed as independent individuals under salaries tax. Choosing joint assessment requires selecting Part 4.4 of the BIR60 and signing Part 13 simultaneously, and must be re-elected each year; if one spouse’s income is less than the allowance they would be entitled to, joint assessment should be advantageous for them.

Holding Over Provisional Tax

An application to hold over provisional tax must be delivered to the IRD before the deadline. The delivery deadline is the later of 28 days before the due date for paying provisional tax, or 14 days after the date the provisional tax demand note is issued.

One ground for application is an expected drop in net chargeable income. If the net chargeable income for the provisional tax year is or is expected to be less than 90% of the preceding year’s, an application may be made on this basis.

Tax Concessions

Salaries tax for the 2025/26 tax year receives a 100% concession. The ceiling per case is HK$3,000; for a married person jointly assessed with a spouse, the ceiling is HK$3,000 combined for both. The concession applies only to the final assessment for 2025/26, not to the provisional tax for that year, and taxpayers must still pay the provisional tax on time.

The concession ceiling for the 2024/25 tax year was HK$1,500.

For the provisional tax for the 2026/27 tax year, the IRD will automatically calculate it based on the adjusted allowance amounts. Taxpayers only need to complete the 2025/26 tax return without making a separate application.

Frequently Asked Questions

Do I Need to File a Tax Return in My First Year After Arriving in Hong Kong?

You must submit the tax return by the deadline after receiving the BIR60. Even if there is no income to declare that year, it must still be completed and submitted on time, otherwise an estimated assessment may be issued and you may be penalised.

How Is Salaries Tax Calculated?

The tax is computed either on the net chargeable income at progressive rates, or on the net income at the standard rate, and the lower of the two is charged. Net chargeable income equals income less total deductions and total allowances, then less the tax concession (subject to the concession ceiling).

Can MPF Contributions Be Deducted?

Yes, an employee’s mandatory contributions to an MPF scheme are tax-deductible. The maximum deduction per tax year is HK$18,000; even with two employments and two contributions, the combined deduction remains capped at HK$18,000.

Do I Need to File If I Have No Income?

After receiving the BIR60, you must still submit the tax return even if you have no income. If you are chargeable to tax but have never received a tax return, you must notify the IRD in writing on or before 31 July to request its issuance.

If I Am Employed in Hong Kong but Perform Some Duties Elsewhere, Is My Income Charged in Full?

Persons in Hong Kong employment must pay salaries tax on all income. Even if part of the duties is performed outside Hong Kong, an exemption from tax or a tax concession may still be applied for annually.

Do I Need to Notify the IRD If I Am Leaving Hong Kong?

A person liable to salaries tax who is about to emigrate, or go overseas for study or employment, must notify the IRD in writing. The notification must be made not later than one month before the expected date of departure, and every departing taxpayer must settle their tax before leaving.

Official Sources

This article is a compilation of policy information and does not constitute legal advice; policies are subject to the latest announcements by official bodies such as the IRD.