Tax
Salaries Tax Allowances & Deductions Guide 2026
Gary Chung（FinKit Editor-in-Chief） · Published：June 6, 2026
Understand Hong Kong's various tax allowances and deductions to legally reduce your tax bill. From the basic allowance to VHIS deductions — everything in one place.
Basic Allowances (2025/26 Tax Year)
| Allowance Item | Amount (HK$) |
|---|---|
| Basic Allowance | 132,000 |
| Married Person's Allowance | 264,000 |
| Child Allowance (per child, 1st–9th) | 130,000 |
| Dependent Parent/Grandparent (aged 60+) | 50,000 |
| Dependent Parent/Grandparent (aged 55–59) | 25,000 |
| Single Parent Allowance | 132,000 |
| Disabled Dependent Allowance | 75,000 |
| Self-Education Expenses (max) | 100,000 |
Deductions
| Deduction Item | Annual Cap (HK$) |
|---|---|
| MPF Mandatory Contributions | 18,000 |
| VHIS (per insured person) | 8,000 |
| Qualifying Annuity Premiums + TVC | 60,000 (combined) |
| Home Loan Interest | 100,000 |
| Charitable Donations (≥$100, max 35% of income) | 35% of assessable income |
| Elderly Residential Care Expenses | 100,000 |
Progressive Rate vs Standard Rate
Hong Kong salaries tax uses the "lower of" principle: the Inland Revenue calculates your tax under both the progressive rate and the standard rate (15%), then charges whichever is lower.
| Net Chargeable Income | Rate |
|---|---|
| First HK$50,000 | 2% |
| Next HK$50,000 | 6% |
| Next HK$50,000 | 10% |
| Next HK$50,000 | 14% |
| Remainder | 17% |
Example: Single Person Earning HK$600K/Year
Allowance calculation:
- Annual income: HK$600,000
- MPF contributions: −HK$18,000
- Basic allowance: −HK$132,000
- Net chargeable income: HK$450,000
Progressive rate calculation:
- First $50,000 × 2% = $1,000
- Next $50,000 × 6% = $3,000
- Next $50,000 × 10% = $5,000
- Next $50,000 × 14% = $7,000
- Remaining $250,000 × 17% = $42,500
- Total tax: HK$58,500 (even lower after tax reduction)
Calculate your own tax bill:
Salaries Tax Calculator →