Quick answer
In 2026 Hong Kong cuts your salaries tax with allowances (HKD 132,000 basic, HKD 264,000 married, HKD 130,000 per child) and capped deductions: MPF HKD 18,000, home loan interest or rent HKD 100,000, self-education HKD 100,000, annuity and MPF top-ups HKD 60,000, VHIS premiums HKD 8,000 per person. Claim them on form BIR60.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Find my savings →You earn a salary or freelance income in Hong Kong and you want to pay the legal minimum without inventing anything. Good news: Hong Kong's allowances and deductions are few, generous and easy to claim. After this guide you will know every 2026 figure, who qualifies, and how to stack them on your return.
Hong Kong personal deductions and benefits in 2026: the key figures
| Allowance or deduction | Cap for year of assessment 2026/27 |
|---|---|
| Basic allowance / married person's allowance | HKD 132,000 / HKD 264,000 |
| Child allowance (each of 1st to 9th child) | HKD 130,000, plus HKD 130,000 extra in the year of birth |
| Dependent parent or grandparent allowance | HKD 50,000 (aged 60+) or HKD 25,000 (55–59); doubled if living with you |
| Mandatory MPF contributions | HKD 18,000 |
| Home loan interest or domestic rent | HKD 100,000 (HKD 120,000 if your first child was born on or after 25 October 2023) |
| Self-education expenses | HKD 100,000 |
| Qualifying annuity premiums and MPF tax-deductible voluntary contributions | HKD 60,000 combined |
| Voluntary Health Insurance Scheme (VHIS) premiums | HKD 8,000 per insured person |
These figures applied for 2025/26 and are carried into 2026/27 here.
Is this guide for you?
Read on if you…
- pay salaries tax in Hong Kong and have never checked which allowances you can claim;
- rent or own your home, support parents or children, or pay for courses and health insurance;
- are a freelancer wondering whether personal assessment lets you use these deductions against profits.
Probably not your case if you…
- earn only non-Hong Kong income (nothing to deduct from, since it is not taxed);
- are looking for business expense rules for your company (see business expenses in Hong Kong).
How do allowances and deductions actually cut your Hong Kong tax?
Hong Kong salaries tax is computed two ways, and you pay the lower. The progressive method takes your income, subtracts deductions and allowances, and taxes the rest at 2%, 6%, 10%, 14% and 17% on bands of HKD 50,000. The standard rate method takes income minus deductions only (no allowances) at 15%, or 16% on the part above HKD 5 million.
Here's the catch. Allowances only help under the progressive method. For high earners, usually above about HKD 2 million of net income, the 15% standard rate takes over and allowances stop mattering. Deductions reduce both computations, so they always count.
You claim everything once a year on form BIR60, issued in early May. Nothing is withheld at source. The mechanics are in personal income tax in Hong Kong.
Which personal allowances can you claim in 2026?
Allowances are fixed amounts based on your family situation. No receipts are needed, but the Inland Revenue Department (IRD) can ask for proof.
| Allowance | 2026/27 amount | Conditions in brief |
|---|---|---|
| Basic | HKD 132,000 | Everyone, automatically |
| Married person's | HKD 264,000 | Married couple, replaces the basic allowance |
| Child | HKD 130,000 per child, plus HKD 130,000 in the year of birth | Unmarried, under 18 or under 25 in full-time education |
| Dependent parent / grandparent | HKD 50,000 (60 or over) or HKD 25,000 (55 to 59) | Hong Kong resident; you pay at least HKD 12,000 a year or they live with you six months or more |
| Additional dependent parent / grandparent | Same amount again | Lives with you the full year |
| Dependent brother / sister | HKD 37,500 | Under 18, or under 25 in full-time education |
| Single parent | HKD 132,000 | You alone care for a child you claim child allowance for |
| Disabled dependant | HKD 75,000 | Dependant eligible for Government disability allowance |
| Personal disability | HKD 75,000 | You are eligible for Government disability allowance |
Only one person can claim each dependant, so siblings supporting the same parent must agree who claims. A married couple can choose joint assessment so that a low-earning spouse's allowance is not wasted.
Which deductions reduce your income before tax?
Deductions are actual costs with a statutory cap. Keep receipts for six years.
MPF contributions – HKD 18,000
Mandatory Provident Fund contributions are deductible up to HKD 18,000 a year, which is 5% of the HKD 30,000 monthly cap over twelve months. The self-employed get the same deduction.
Home loan interest – HKD 100,000
Interest on a mortgage for your own home in Hong Kong is deductible up to HKD 100,000 a year for a maximum of 20 years of assessment. With a first child born on or after 25 October 2023, the cap rises to HKD 120,000. Co-owners share the cap.
Domestic rent – HKD 100,000
Rent paid under a stamped tenancy for your main home in Hong Kong is deductible up to HKD 100,000, with the same HKD 120,000 uplift for a newborn. No claim if you or your spouse owns a home in Hong Kong, or if your employer provides housing.
Self-education – HKD 100,000
Course and exam fees for education that maintains or improves skills for your current job, or a job you expect to move to, at recognised institutions.
Approved charitable donations – 35% of income
Donations of HKD 100 or more to charities approved under section 88 of the Inland Revenue Ordinance, up to 35% of your assessable income. Foreign charities do not qualify.
Elderly residential care expenses – HKD 100,000
Fees paid to a licensed care home in Hong Kong for a parent or grandparent aged 60 or over, instead of the dependent parent allowance for that person.
Annuity premiums and MPF voluntary contributions – HKD 60,000
Qualifying deferred annuity premiums and tax-deductible voluntary contributions (TVC) to an MPF scheme share a combined cap of HKD 60,000.
VHIS premiums – HKD 8,000 per insured person
Premiums for a certified Voluntary Health Insurance Scheme policy covering you or a dependant, HKD 8,000 per insured person, no limit on the number of people.
Assisted reproductive services – HKD 100,000
Fees for assisted reproductive services in Hong Kong, up to HKD 100,000 a year, for you or your spouse.
Can freelancers and landlords use these deductions too?
Yes, through personal assessment. By default a sole proprietor pays profits tax at 7.5% on the first HKD 2 million and 15% above, with no allowances. Electing personal assessment pools your profits, salary and rental income, applies all the allowances and deductions above, and taxes the total at the progressive rates (or the 15% standard rate if lower).
Under roughly HKD 500,000 of profits, personal assessment usually wins because the allowances wipe out a large share of the income. Above that, the flat 7.5% often beats progressive rates. Run both numbers before you tick the box; the IRD applies whichever you elect. The two-tier rates are explained in corporate income tax in Hong Kong.
Employees can also deduct outgoings and expenses wholly, exclusively and necessarily incurred in producing their income. The IRD reads this narrowly: professional subscriptions yes, a home office for convenience no.
What about the one-off tax reduction?
Recent Budgets granted a one-off reduction of salaries tax and tax under personal assessment. For 2024/25 it was 100% of the final tax, capped at HKD 1,500 per case, applied automatically.
Newcomers have bigger levers than deductions: the 60-day rule and time apportionment for non-Hong Kong employments, covered in tax incentives for expats and digital nomads in Hong Kong.
Example – Sophie, product manager with a newborn
Sophie earns HKD 1,000,000 in 2026/27. Her husband has no income, their first child was born in July 2026, and they rent for HKD 15,000 a month. Deductions: MPF HKD 18,000, rent HKD 120,000 (newborn uplift), VHIS for two people HKD 16,000, TVC HKD 60,000. Allowances under joint assessment: married HKD 264,000, child HKD 260,000 (including the year-of-birth bonus). Net chargeable income: HKD 262,000. Progressive tax: HKD 26,540. Standard rate check: 15% of HKD 786,000 is HKD 117,900, so the progressive result stands. Claiming only the basic allowance, she would have paid about HKD 129,560. The claims save her roughly HKD 103,000.
Sophie's setup has three moving parts. Yours probably does too.
Heavnn finds every allowance and deduction you qualify for before you file in Hong Kong.
Find my savings →Common mistakes (and what they cost)
- Not electing joint assessment when one spouse earns little → the low earner's HKD 132,000 allowance is wasted, costing up to about HKD 22,000 in tax.
- Claiming domestic rent while your spouse owns a flat in Hong Kong → the claim is disallowed and the IRD may add penalties for an incorrect return.
- Forgetting the year-of-birth child bonus → HKD 130,000 of allowance lost, worth up to HKD 22,100 at 17%.
- Two siblings both claiming the same parent → both claims are rejected until you agree; interest and surcharges can follow if payment is delayed.
- A freelancer electing personal assessment on autopilot → above roughly HKD 500,000 of profits the flat 7.5% is often cheaper; the wrong election can cost tens of thousands.
Frequently asked questions
What is the basic allowance in Hong Kong for 2026?
The basic allowance is HKD 132,000 per person for year of assessment 2026/27, and HKD 264,000 for a married couple electing joint assessment. It is deducted automatically from your net income before the progressive rates apply. It plays no role in the standard rate computation at 15%, which applies only when it produces a lower bill than the progressive method.
Can I deduct my rent in Hong Kong?
Yes. Domestic rent for your main home in Hong Kong under a stamped tenancy is deductible up to HKD 100,000 a year, or HKD 120,000 if your first child was born on or after 25 October 2023. You cannot claim it if you or your spouse owns a residential property in Hong Kong, or if your employer provides you with housing or a rent allowance already treated favourably.
Are MPF contributions tax deductible?
Mandatory contributions are deductible up to HKD 18,000 a year for employees and the self-employed. Ordinary voluntary contributions are not. Tax-deductible voluntary contributions made to a dedicated TVC account are deductible up to HKD 60,000, a cap shared with qualifying deferred annuity premiums. Employer contributions are not your income and need no deduction.
Can I deduct health insurance premiums in Hong Kong?
Only premiums for policies certified under the Voluntary Health Insurance Scheme (VHIS). The cap is HKD 8,000 per insured person per year, and you can claim for yourself, your spouse, children, parents, grandparents and siblings. Ordinary private medical insurance that is not VHIS-certified gives no deduction, so check the certification number on your policy.
Do I need receipts to claim allowances in Hong Kong?
Not for allowances, which depend on your family situation, although the IRD can ask for birth or marriage certificates and proof that a parent lives with you. For deductions such as rent, mortgage interest, donations, courses and insurance you must keep receipts, tenancy agreements and bank statements for six years after the year of assessment.
Related guides
- Personal income tax in Hong Kong – rates, bands and how the progressive and standard methods work.
- Tax incentives for expats and digital nomads in Hong Kong – the 60-day rule and time apportionment.
- Business expenses in Hong Kong – what you deduct through your business instead.
- Obtaining your tax residency in Hong Kong – your first year and first return.
- Tax landscape overview of Hong Kong – the full system in one page.
- Personal tax deductions and benefits of Singapore and personal tax deductions in Thailand – regional comparison.
- All country tax guides
Sources
- Inland Revenue Department – Allowances, deductions and tax rate table
- 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.
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