Progressive rates from 2% to 17% or flat 15%
Hong Kong's hidden benefit: you pay LOWER of progressive (2-17%) or flat 15%—IRD calculates both automatically. Only territorial income taxed—foreign income 100% exempt. A HK$600,000 earner pays just ~8% effective rate. MPF: 5% capped at HK$1,500/month. No capital gains, VAT, or inheritance tax.
Hong Kong offers a choice: progressive rates 2-17% or a flat 15%—IRD calculates both and charges you the lower amount. This unique system means high earners effectively cap at 15%. Only Hong Kong-sourced income is taxed (territorial system)—foreign income is completely tax-free. MPF (Mandatory Provident Fund) adds 5% employee contribution (capped at HK$1,500/month). A HK$600,000 earner (~$77,000 USD) pays roughly HK$48,500 salaries tax (~8% effective rate). No capital gains tax, no VAT, no inheritance tax. Hong Kong's tax year runs April 1-March 31. Filing deadline is typically June. Use our calculator to estimate your Hong Kong tax liability.
| Taxable Income | Tax Rate |
|---|---|
| HK$0 - HK$50,000 | 2% |
| HK$50,000 - HK$100,000 | 6% |
| HK$100,000 - HK$150,000 | 10% |
| HK$150,000 - HK$200,000 | 14% |
| Over HK$200,000 | 17% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
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Get Paid as a Contractor →Hong Kong calculates your tax both ways: progressive rates (2-17% across 5 brackets) and flat 15% standard rate. IRD automatically charges you whichever is lower. For most employees under HK$2 million, the progressive system is cheaper. High earners benefit from the 15% cap. This dual system is unique globally.
Hong Kong only taxes income earned in or derived from Hong Kong. Foreign-source income—dividends from overseas investments, rental income from property abroad, remote work for non-HK employers—is completely tax-free even if remitted to Hong Kong. This makes it attractive for international investors and remote workers.
MPF (Mandatory Provident Fund) is Hong Kong's retirement savings scheme. Employees contribute 5% of salary, matched by 5% employer contribution. Both are capped at HK$1,500/month each (on salary up to HK$30,000/month). MPF contributions are tax-deductible. Funds locked until age 65 or permanent departure from HK.
Hong Kong has no capital gains tax, no VAT/GST/sales tax, no inheritance/estate tax, no withholding tax on dividends, and no tax on interest income for individuals. Property transactions face stamp duty (up to 15% for non-permanent residents), and property owners pay rates (government rent). This simple system attracts wealth.
Hong Kong's tax year runs April 1-March 31. IRD issues tax returns in May. Filing deadline is typically 1 month from issue (June for paper, July for e-filing). Employers submit employer's returns by May. Provisional tax is charged based on prior year—you can apply for holdover if income dropped significantly.
Last Updated: March 2026