How income tax works in Hong Kong
Hong Kong income tax is split across different heads of tax. Salaries tax applies to Hong Kong-sourced employment, office and pension income, profits tax applies to business profits and property tax applies to rental income. Residence is not the main test under domestic law.
For employees, the progressive salaries tax rates run from 2% to 17% for 2025/26, while the tax payable is capped by the standard-rate calculation on net income without personal allowances. Mandatory MPF contributions still apply for covered employees, and the 2026-27 Budget proposes higher allowances from year of assessment 2026/27, subject to legislation.
Income tax brackets in Hong Kong
| Bracket | Rate | Notes |
|---|---|---|
| HKD 0 - 50,000 | 2% | 2025/26 progressive salaries tax band |
| HKD 50,001 - 100,000 | 6% | 2025/26 progressive salaries tax band |
| HKD 100,001 - 150,000 | 10% | 2025/26 progressive salaries tax band |
| HKD 150,001 - 200,000 | 14% | 2025/26 progressive salaries tax band |
| Over HKD 200,000 | 17% | 2025/26 progressive salaries tax band |
Tax rates at a glance
- Salaries tax
- 2% - 17%Progressive
- Standard rate cap
- 15% / 16%
- Foreign-sourced salary
- 0% / source-based
- Employee MPF
- 5%
- Employer MPF
- 5%
- Tax on wages
- 2% - 17%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Remote foundersHigh earnersInvestorsDigital nomadsCrypto holders
Watch out for
- Salaries tax is only one part of the picture. MPF contributions, property tax, profits tax for self-employment, stamp duty and foreign tax residence can all change the real outcome.
- The Hong Kong IRD can treat some income as Hong Kong-sourced even if paid offshore, so the contract, employer location and service location matter.
- The 2026-27 Budget proposals increase key allowances from year of assessment 2026/27, including the basic allowance from HKD 132,000 to HKD 145,000, but the measures are still subject to enactment.
Frequently asked questions
Do expats pay income tax in Hong Kong?
Yes, if the income is Hong Kong-sourced employment, office or pension income. Hong Kong does not tax total worldwide income, but salaries tax still applies to Hong Kong-source earnings.
Is salary taxed in Hong Kong?
Yes. Salary and wages are taxed under salaries tax at progressive rates from 2% to 17%, with a separate standard-rate calculation—15% on the first HKD 5 million of net income without allowances and 16% above that—and allowances that can reduce the final bill.
How do I become a tax resident in Hong Kong?
Hong Kong's domestic salaries tax rules are source-based rather than residence-based, but residence can matter for treaty purposes and for proving non-Hong Kong employment or offshore positions.