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Salaries Tax

This taxation is subject to wages, commissions, bonuses, various types of remuneration for services rendered, and social benefits. In other words, the Salaries Tax is levied from the total compensation package of a staff member. The rate of Salaries Tax is progressive and ranges from 2 to 17% of the amount of income received by a staff member for the relevant period. Calculating the amount of tax payable and tax revenue ultimately falls directly to employees. The duty of an employer is only to provide full information on revenue of the employee to the Inland Revenue Department of Hong Kong in a form of a declaration (return).

Revenue of employee is taxable if:

  1. the labor contract is agreed upon, came into effect and is enforceable in Hong Kong;
  2. the legal address and the address of residence  of the employer is in Hong Kong; 
  3. payment is effected in Hong Kong. 

Employees who work outside Hong Kong are free from tax payment. If an employee stays in Hong Kong less than 60 days during the reporting period, the employee is not obliged to pay Salaries Tax in Hong Kong,  or to make mandatory contributions to the pension fund.