Job Discussion Forums

[lundegatan]

I am trying to figure out what the tax rate is on a monthly salary of 35,000 HKD. I found various information online � but can�t figure out what the exact percentage would be.

Any ideas?

[Perilla]

15%

[sushikurva]

,,,

[sushikurva]

,,,

[lundegatan]

Thanks for the update - everything is finally clear!

[Perilla]

[sushikurva]

,,,

[HK_GURU]

You guys didn't mention Provisional tax. This is the killer. My salary is similar to Perilla and obviously I pay around the same level of tax. However, for myself and others I know in the second year in HK you will be asked to pay a year of provisional tax. For example in my second year I paid around 100,000hkd in tax. About half for the current year and the rest covers the following year. It was a painful experience and one that all Hong Kong based expatriates should be prepared for.

Also each year that your salary is higher there will be more provisional tax to be paid for the following year.

In theory you should be a year ahead and I imagine the year you leave it would seem logical that you would pay almost no tax but I don't trust the system.

[Smoog]

If it's any help you can work out exactly how much you owe using the HK IRD tax computation page:
http://www.gov.hk/en/residents/taxes/etax/services/tax_computation.htm

As a rule of thumb I've found I pay around the equivalent of 5 weeks salary (around 11% of my total annual salary). For the op, you should expect a tax bill of around $42k assuming you've been on $35k /month the entire tax year.

Tax is payable in two installments: end of January (80% of total owed iirc) and end of April (the remainder).

The tax people are incredibly helpful in HK, so don't be worried about popping in to see them. They can help you set up what's called tax reserve certificate account, which direct debits a set amount each month to the IRD. It can help take the sting out of the first tax demand.
The most amazing thing about this account is that the IRD will pay you interest on it! True, as it's the going bank deposit rate it's pitiful but still: the very idea that a tax dept will pay you interest on money you owe them is just bizarre.

[GreatApe]

Some good information here. Thanks everyone!

--GA

[ozman]

yes the provisional tax is a KILLER, especially when it's your first tax return.

while the standard rate of tax is 15% as outlined above, for those thinking of coming to HK, we don't have PAYE tax (pay as you earn) - you don't get taxed each month on your salary - you get the GROSS amount paid in your hand. The tax man will send you a bill - you pay a lump sum - or opt to choose to pay in TWO lump sums. This is why the tax bill can be a killer when it all comes at once. The secret is to put AWAY 10%-15% of your salary each month so you'll have enough funds.

[sistercream]

If you don't want to have a nasty shock when your first tax bill arrives, you can purchase Tax Certificates through your bank. These accrue interest (not much, but every bit helps!).

You tell them how much you want to purchase each month, set up the direct debit, and when you receive your tax assessment you give that to your bank, who then packs the $$ off to the Revenue Dep't. If you have a surplus, you can either roll it over for the coming year, or withdraw it as cash (in which case you forfeit any accumulated interest).

[RiverMystic]

Hmm, when I first came to HK I used to get relatively low tax bills, never more than 60 000, and often 20-something thousand. Then in the 6th and 7th years I was hit with two consecutive bills of way over 100 000. I still haven't worked out the reasons for the sudden massive increase.