Hong Kong Salaries Tax 2025/26: The Calm Guide

The 30-second summary

• The year of assessment (the 12 months the IRD looks at) runs from 1 April 2025 to 31 March 2026.
• Your tax is calculated two ways — progressive bands of 2% to 17%, and a flat standard rate of 15% — and the IRD automatically charges whichever is lower. You don’t choose.
• Before any rate applies, deductions (like MPF) and allowances (like the HK$132,000 everyone gets) come off your income first. Most of the money you save at filing time comes from these, not from the rates.
• For YA 2025/26 there’s a one-off reduction of 100% of your final tax, capped at HK$3,000 — applied automatically.
• There are effectively two deadlines: roughly a month after your return is issued on paper, and about a month more if you file through eTAX.

If you’d rather see your own numbers than read about everyone else’s, you can run them through the free calculator in about five minutes and come back to this guide for the why.

What’s actually new for 2025/26

One thing, and it’s good news: the one-off tax reduction. For YA 2025/26 the government waives 100% of your final salaries tax, capped at HK$3,000 per case — double last year’s HK$1,500 ceiling. If your final tax works out to HK$2,400, you pay nothing. If it works out to HK$24,000, you pay HK$21,000.

Most people miss this measure entirely, because there’s nothing to miss: it’s automatic. No box to tick, no application. The IRD applies it when it assesses your return. Two details are worth knowing, though.

• It applies to final tax only — not to the provisional tax (the pre-payment for next year) that usually appears on the same bill. More on that in the deadlines section.
• The cap is per case. A married couple assessed separately is two cases — two HK$3,000 ceilings. Assessed jointly, they’re one case — one ceiling. For some couples that alone changes which option is cheaper this year. The joint vs separate guide works through it.

The bands, in plain English

The progressive rates don’t apply to your salary. They apply to your net chargeable income — your income after deductions and allowances are subtracted. That’s the number that matters, and for most people it’s a lot smaller than their salary.

Each band only taxes the slice of income inside it — crossing into the 17% band does not mean everything is taxed at 17%. Here’s the whole journey for someone earning HK$30,000 a month with no dependants.

That’s about 4.1% of gross pay — a useful number to hold on to when the word “tax” starts to feel bigger than it is.

And the standard rate? It’s a flat 15% on your income after deductions but before allowances (16% on anything above HK$5,000,000). In the example above that would be HK$51,300 — nearly three times the progressive answer — which is why most people never touch it. The IRD checks both for you, every time.

The deductions worth claiming

A deduction is an expense the IRD lets you subtract from your income before tax is calculated. These are the ones that move the needle for salaried people, with the one-line rule for each.

The TVC/QDAP shared cap is the one that catches diligent savers: the two are advertised separately but deducted together. And domestic rents is the one renters skip without realising — it has only existed for a few years, and the stamped-lease requirement makes people assume they don’t qualify when usually they just need to get the lease stamped.

The allowances worth knowing

An allowance is a flat amount subtracted from your income simply because of who depends on you. No receipts, no spending required — just eligibility.

Two of these are missed so often they have their own patterns. The first is the year-of-birth top-up: in the year your child is born you claim HK$260,000 for that child, not HK$130,000 — easy to forget in a sleep-deprived May. The second is the dependent parent allowance, which only one sibling can claim per parent per year. If you and your brother both claim your mother, the IRD rejects both claims until you sort it out — the sibling coordination guide covers the conversation and includes a note you can send.

One deadline that’s actually two

BIR60 returns are bulk-issued in early May. From there, the paper deadline is roughly one month after the issue date — around early June 2026. File through eTAX instead and you get an automatic extension of about one more month, to around early July 2026. Same form, same numbers, a month more breathing room: this is the practical reason to e-file even if you like paper. (If you’re a sole proprietor, your deadline is longer still — the freelance guide has the details.)

Five filing-day mistakes worth avoiding

1. Auto-piloting the assessment method. Married couples and anyone with rental or business income should compare separate, joint and personal assessment before filing — the wrong default quietly costs four figures. The comparison guide shows when each one wins.
2. Losing the dependent parent allowance to a sibling mix-up. One claimant per parent per year. Agree before anyone files — here’s how.
3. Stacking TVC and QDAP past the shared cap. The combined deduction is HK$60,000 — claiming both in full just means the IRD trims it back.
4. Skipping the domestic rents deduction. Up to HK$100,000 off your assessable income if you rent your home on a stamped lease.
5. Forgetting the newborn top-up. A child born during the year carries an extra HK$130,000 allowance on top of the usual one.

Calm your way through it

That’s the whole year on one page. If you want to see how these numbers land on your own income, the free calculator walks you through it in plain English, question by question, no signup. And if you’d like the actual BIR60 walked through box by box, that’s what the Filer pack is for — HK$128, one-off, on the Filer page.