CALCULATION OF THE HONG KONG SALARY TAX:
The salary tax is regulated under section 8 of the Inland Revenue Ordinance. The tax on salaries, is subject to the provisions of the IRO, and shall be taxed each year to the income of each employee, “cargo y/o pensión”, arised in or derived from Hong Kong
The one year evaluation period runs from the 1st of April to the 31st of March of the following year.
Individuals are taxed at a progressive rate on their net income, that is to say after deductions and deductions starting at 2% and ending at 17%; Or at a standard rate of 15% on the net income ( meaning, the income after deductions), whichever is lower in favor of the individual.
The table below reflects the rates for the current fiscal year 2016/2017.
Once the calculation has been made, the tax on the salary and on the personal income for the 2016/2017 year will have a 75% reduction subject to a maximum of 20,000 HKD$ per case.
If more information is required regarding this subject please do not hesitate to contact us.