1. What is Hong Kong Salary Tax?

Hong Kong has a progressive salary tax system with tax rates ranging from 2% to 17%. Unlike many countries, Hong Kong does not have a general sales tax or VAT, and capital gains are not taxed.

2. How Does the Calculator Work?

The calculator uses Hong Kong's progressive tax rates:

Explanation: The tax is calculated progressively, meaning each portion of your income is taxed at the corresponding rate.

3. Importance of Tax Calculation

Details: Understanding your tax liability helps with financial planning and ensures you set aside appropriate funds for tax payments.

4. Using the Calculator

Tips: Enter your annual income in HKD. The calculator will automatically apply the progressive tax rates to estimate your tax liability.

5. Frequently Asked Questions (FAQ)

Q1: Are there any tax allowances in Hong Kong?
A: Yes, Hong Kong offers various allowances including basic allowance, child allowance, and dependent parent allowance.

Q2: Is there a standard tax rate option?
A: Yes, taxpayers can choose to be assessed under the standard rate (15% of net income) if it results in lower tax.

Q3: When are taxes due in Hong Kong?
A: The tax year runs from April 1 to March 31, with tax bills usually issued in October and payment due in January.

Q4: Are bonuses taxed differently?
A: No, bonuses are treated as part of your income and taxed at the same progressive rates.

Q5: Is MPF contribution tax-deductible?
A: Yes, Mandatory Provident Fund contributions are tax-deductible up to HKD 18,000 per year.