BIDA & Co. Limited

Salaries tax is chargeable on most but not all of the income from employment, offices and pension arising in or derived from Hong Kong.

 

How Salaries Tax is computed

Salaries Tax payable is calculated at progressive rates on your net chargeable income or at standard rate on your net income, whichever is lower.

Net Chargeable Income = Total Income - Deductions – Allowances

Net Income = Total Income – Deductions

A year of assessment runs from 1 April to 31 March of the following year.

 

Employee

You can be charged salaries tax on your income arising in or derived from Hong Kong from any employment, office, and pension. If you receive a tax return from the Inland Revenue Department, you must complete and submit it by the due date for filing even if you have no income that can be charged to salaries tax.

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Directors

You are a director of a Hong Kong company if your position is defined by the relevant duties and responsibilities stipulated in the Companies Ordinance, and a director of a non-Hong Kong company if you have similar duties and responsibilities as laid out by corresponding foreign legislation. A directorship is regarded as an office. In general, if you are a director of a company resident in Hong Kong, your full income derived from that office in Hong Kong is chargeable to salaries tax. This is not affected by the number of days during the year of assessment that you stayed in Hong Kong, and no exemptions or relief are available.

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If you are assessed to salaries tax or have elected personal assessment, you are entitled to a basic allowance and you are eligible to claim other allowances that may reduce your total assessable income provided that the prescribed conditions as specified in the Inland Revenue Ordinance are satisfied. Here you can learn more about the various allowances you can claim, how to lodge a claim and recent changes in allowance amounts.

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In every year of assessment you are entitled to a basic allowance. You can also claim other allowances: 

• Married person's allowance

• Child allowance

• Dependent brother or dependent sister allowance

• Dependent parent and dependent grandparent allowance

• Single parent allowance

• Disabled dependent allowance

• Personal disability allowance

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If you receive BIR60 from IRD, you must complete and submit it in time even if you do not have any income to report.

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If you are married for all or part of the year and have elected joint assessment or personal assessment or have been nominated by your spouse to claim home loan interest deduction, your BIR60 should also be signed by your spouse.

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