Quick answer
Hong Kong salaries tax in 2026 applies to Hong Kong-sourced employment income at 2% to 17% on HKD 50,000 bands after a HKD 132,000 basic allowance, or at a flat 15% standard rate without allowances (16% above HKD 5 million), whichever is lower. Foreign income, dividends and capital gains are not taxed. Nothing is withheld; you pay after filing.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
Heavnn
Stay tax compliant, wherever you work
Answer a few questions and get a clear plan for your own situation.
Find my savings →You are moving to Hong Kong with a job, a remote contract or a freelance business, and you want to know what you will actually pay and when. Hong Kong has no single income tax but three separate ones, and the rules on where income comes from matter more than how much you earn. After this guide you will know the 2026 rates, the source rules, the calendar and how to pay less legally.
Hong Kong personal income tax in 2026: the key figures
| Item | Rule for year of assessment 2026/27 (1 April 2026 to 31 March 2027) |
|---|---|
| Progressive rates | 2% / 6% / 10% / 14% on four bands of HKD 50,000, then 17% on the rest |
| Standard rate | 15% on net income up to HKD 5 million, 16% above (no allowances) |
| Basic allowance | HKD 132,000 (HKD 264,000 married) |
| Profits tax for sole proprietors | 7.5% on first HKD 2 million, 15% above, or personal assessment |
| Property tax on rent | 15% of net assessable value |
| Dividends, interest, capital gains, foreign-sourced income | Not taxed |
| MPF contributions | 5% employee + 5% employer, each capped at HKD 1,500 a month |
| Filing | Form BIR60 issued early May, due within one month (plus one month for e-filing) |
The rates and allowances applied in 2025/26 and are carried forward here.
Is this guide for you?
Read on if you…
- will earn a salary from a Hong Kong employer, or work in Hong Kong for a foreign one;
- freelance from Hong Kong and want to compare profits tax with personal assessment;
- split your working time between Hong Kong and other countries and need the day-count rules.
Probably not your case if you…
- only receive dividends, interest or gains in Hong Kong (none of them are taxed);
- run a limited company and need the corporate rules (see corporate income tax in Hong Kong).
How is personal income taxed in Hong Kong?
Hong Kong's Inland Revenue Ordinance (Cap. 112) has no general income tax. It has three schedular taxes:
- Salaries tax on income from an office, employment or pension.
- Profits tax on business profits, including a freelancer's.
- Property tax on rent from Hong Kong real estate.
Each is assessed separately. An individual can elect personal assessment to pool all three, apply the personal allowances and the progressive rates to the total, and deduct losses or mortgage interest across sources. The Inland Revenue Department (IRD) computes it on request; you tick a box on your return.
Residence plays almost no role. Hong Kong taxes income by source, so a non-resident with a Hong Kong job pays salaries tax and a resident with a foreign-sourced salary does not. The only place residence matters is in treaties, covered in tax treaties of Hong Kong.
What are the salaries tax rates and how is the bill computed?
The IRD runs two calculations and charges the lower.
Progressive method. Start with your income, subtract deductions (MPF, rent, mortgage interest, courses, donations, insurance) and allowances (basic, married, child, parent). The result is net chargeable income, taxed as follows:
| Net chargeable income band | Rate | Tax on full band |
|---|---|---|
| First HKD 50,000 | 2% | HKD 1,000 |
| Next HKD 50,000 | 6% | HKD 3,000 |
| Next HKD 50,000 | 10% | HKD 5,000 |
| Next HKD 50,000 | 14% | HKD 7,000 |
| Remainder above HKD 200,000 | 17% | – |
Standard rate method. Take income minus deductions only, no allowances, at 15%, or 16% on the portion above HKD 5 million.
For high earners, usually above about HKD 2 million of net income, the standard rate takes over and allowances stop mattering. The full list of deduction caps is in personal tax deductions and benefits of Hong Kong.
Recent Budgets have added a one-off reduction, 100% of the final tax capped at HKD 1,500 for 2024/25, applied automatically on the assessment.
Which income is taxable in Hong Kong?
Employment income
Everything from an employment counts: salary, bonuses, commissions, share options at exercise, and benefits convertible into money. Employer-provided housing is taxed at a notional rental value of 10% of your other income, usually far below the real rent, which is why Hong Kong packages still include housing.
Whether the income is Hong Kong-sourced depends on where the employment is located. The IRD looks at where the contract was negotiated and signed, where the employer is resident and where you are paid.
- Hong Kong employment: the whole salary is taxable, wherever you work, unless you perform all services outside Hong Kong, or you visit Hong Kong for 60 days or less in the year and work only during those visits.
- Non-Hong Kong employment: only the part attributable to days worked in Hong Kong is taxed, on a time apportionment basis: days in Hong Kong divided by days in the year.
- Directors' fees: taxable in full if the company is managed and controlled in Hong Kong, with no apportionment.
Salary for services performed in another country on which you paid tax there is excluded if that country has no treaty with Hong Kong; with a treaty, you claim a credit instead. The practical use of these rules for newcomers is in tax incentives for expats and digital nomads in Hong Kong.
Freelance and business income
A sole proprietor pays profits tax at 7.5% on the first HKD 2 million and 15% above on Hong Kong-sourced profits, with business expenses deducted but no personal allowances. Or elect personal assessment to use allowances and the progressive rates. Roughly, personal assessment wins below HKD 500,000 of profits; the flat rates win above. Structures are compared in legal forms of business in Hong Kong.
Not taxed
Dividends, bank interest, capital gains, foreign rental income and, for most people, crypto gains. There is no social security: the MPF is a savings scheme, 5% from you and 5% from your employer, each capped at HKD 1,500 a month, deductible up to HKD 18,000 a year.
When do you file and pay?
Hong Kong has no pay-as-you-earn withholding. Your employer reports your income on form IR56B each April; you file and pay yourself.
- Early May: the IRD issues the individual tax return (BIR60) for the year just ended. Paper returns are due within one month; e-filing through eTAX gets an extra month.
- Late summer to autumn: the IRD issues a notice of assessment showing final tax for the past year plus provisional salaries tax for the current year, estimated at the same amount.
- January: first instalment, usually 75% of the provisional tax plus all of the final tax.
- April: second instalment, the remaining 25%.
- Holdover: if your income will fall by more than 10%, or you have become entitled to new deductions, apply in writing before the due date to reduce provisional tax.
Arriving mid-year, your first assessment is large because final and provisional tax land together. Leaving, your employer files form IR56G a month before departure and holds your last salary until the IRD clears you; see ceasing your tax residency in Hong Kong. Late payment attracts a 5% surcharge, then a further 10% after six months.
Example – Lena, remote product designer
Lena joins a Hong Kong fintech in April 2026 on HKD 800,000 a year and rents a flat for HKD 18,000 a month. Deductions: MPF HKD 18,000 and domestic rent HKD 100,000. With the HKD 132,000 basic allowance her net chargeable income is HKD 550,000. Progressive tax: HKD 16,000 on the first HKD 200,000 plus 17% of HKD 350,000, total HKD 75,500. Standard rate check: 15% of HKD 682,000 is HKD 102,300, so the progressive result applies. Effective rate on gross salary: 9.4%. Her first notice in late 2027 asks for about HKD 151,000, final plus provisional, split over January and April 2028.
Lena's setup has three moving parts. Yours probably does too.
Heavnn finds your savings by checking your source position, deductions and provisional tax in Hong Kong.
Find my savings →Common mistakes (and what they cost)
- Assuming a foreign employer means no Hong Kong tax → days worked in Hong Kong under a non-Hong Kong employment are taxable; the IRD can assess six years back with penalties.
- Not budgeting for provisional tax → the first bill is roughly double the real liability; late payment adds a 5% surcharge, then 10%.
- Electing personal assessment as a high-earning freelancer → progressive rates up to 17% replace the 7.5% flat rate; tens of thousands overpaid.
- Ignoring your old country's residence rules → Hong Kong's 15% cap does not stop a home country that still treats you as resident from taxing your worldwide salary.
Frequently asked questions
What is the income tax rate in Hong Kong in 2026?
Salaries tax is charged at progressive rates of 2%, 6%, 10%, 14% and 17% on successive HKD 50,000 bands of net chargeable income, after deductions and a HKD 132,000 basic allowance. Alternatively a standard rate of 15% applies to net income without allowances, or 16% on the part above HKD 5 million. You pay whichever calculation gives the lower amount.
Do foreigners pay income tax in Hong Kong?
Yes, on Hong Kong-sourced employment or business income, at the same rates as locals; nationality and residence do not change the bill. Foreign-sourced income, dividends, interest and capital gains are not taxed for anyone. Visitors with a non-Hong Kong employment who work in Hong Kong for 60 days or less in a year pay nothing.
Is tax deducted from my salary in Hong Kong?
No. Hong Kong has no pay-as-you-earn system. Your employer reports your pay to the IRD, you file form BIR60 after the year ends on 31 March, and you pay the assessed tax in two instalments, typically January and April, together with provisional tax for the following year. Set aside roughly 10% to 15% of your salary from day one.
What is personal assessment in Hong Kong?
Personal assessment is an election that combines your salaries, business profits and rental income into one total, applies all personal allowances and deductions, and taxes the result at the progressive rates or the standard rate, whichever is lower. It helps freelancers and landlords with small or mixed income and those with mortgage interest; it can hurt high-earning sole proprietors. You elect it on your annual return.
How does Hong Kong tax a remote worker employed abroad?
If your employment is located outside Hong Kong, only the portion of your salary attributable to days physically worked in Hong Kong is taxable, by time apportionment. If you are in Hong Kong for visits totalling 60 days or less in the year, that portion is exempt. Where your employer is resident and where you are paid determine the employment's location.
Does Hong Kong tax worldwide income of residents?
No. Even permanent residents are taxed only on income arising in or derived from Hong Kong. A Hong Kong resident's foreign rental income, foreign dividends and salary for a foreign employment performed abroad are outside the net. Hong Kong-located employment income is taxable in full regardless of where the work is done, with limited exceptions.
Related guides
- Personal tax deductions and benefits of Hong Kong – every allowance and deduction cap for 2026.
- Tax incentives for expats and digital nomads in Hong Kong – the 60-day rule and time apportionment in practice.
- Obtaining your tax residency in Hong Kong – your first year and first return.
- Ceasing your tax residency in Hong Kong – tax clearance before you leave.
- Legal forms of business in Hong Kong – sole proprietor versus company for freelancers.
- Tax landscape overview of Hong Kong – the whole system on one page.
- Personal income taxes in Thailand – how the region's nomad favourite compares.
- All country tax guides
Sources
- Inland Revenue Department – Individuals: salaries tax and personal assessment
- Inland Revenue Ordinance (Cap. 112), Hong Kong e-Legislation
- GovHK – Taxes and duties for residents
- Mandatory Provident Fund Schemes Authority
- The 2026-27 Budget, Government of the HKSAR
This guide is general information, not personalised tax advice. See how we research and review.
Find your savings on Hong Kong salaries tax in 2026.
Heavnn checks your source position, deductions and personal assessment election before you file.
Start with Heavnn →
