1.  How Salaries Tax is computed?

2.  Will my entitlement to claim Married Person's Allowance or Child Allowance be affected if my spouse or child is not ordinarily resident in Hong Kong?

No. Different from Dependent Parent Allowance or Dependent Grandparent Allowance, whether your spouse or child is ordinarily resident in Hong Kong is not a prerequisite for claiming the Married Person's Allowance or Child Allowance under the Inland Revenue Ordinance. You can lodge your claim for the Married Person's Allowance or Child Allowance in your Individual Tax Return provided that other conditions are met.

3.  If I am a part-time employee or self-employed person, do I need to file a tax return?

The law provides that, regardless of whether you are a part-time employee or self-employed person, you must complete and submit your Individual Tax Return (Form BIR60) in time if you have received it from the IRD.

If you are self-employed (i.e. running a sole proprietorship or partnership business), you are liable for Profits Tax if your sole proprietorship or partnership business has derived net assessable profits which arise in or are derived from Hong Kong.

In general, if you are running a sole proprietorship business, you need to file your Individual Tax Return (Form BIR60) together with the supporting tax computation and a set of the sole proprietorship business’s financial statements annually.  As for partnership businesses, a Profits Tax Return - Persons Other Than Corporations (Form BIR52) together with a set of the partnership’s financial statements and tax computation are required to be filed annually.

4.  When will I receive my Individual Tax Return?

The IRD normally issues the Individual Tax Returns (Forms BIR60) to regular taxpayers on the first working day of May every year.

The bulk issue of the 2025/26 Individual Tax Returns (Forms BIR60) took place on 4 May 2026. The due dates for filing the Individual Tax Returns (Forms BIR60) are as follows:-

5.  If I do not receive my Individual Tax Return from the IRD, does it mean I do not need to report or pay any tax?

No, you may be liable for tax if you derive employment income, rental income or business profits from Hong Kong.  If you have derived income that is liable for Salaries Tax for 2025/26 but do not receive your 2025/26 Individual Tax Return (Form BIR60) which should have normally been issued by the IRD in early May 2026, you are obliged to inform the IRD of your chargeability to tax in writing no later than 31 July 2026.

6.  Can I be exempt from Salaries Tax if I spend less than 60 days a year in Hong Kong in a tax year?

In most cases, you can be exempt from Salaries Tax in a year of assessment if you rendered all services under your employment outside of Hong Kong for that year of assessment.  "Services" would also include activities such as attending training sessions, meetings or reporting in Hong Kong.  Alternatively, most employment income from services rendered in Hong Kong during visits not exceeding a total of 60 days in a year of assessment can also be exempt from Salaries Tax.  "Visits" refer to short or temporary stays, where a partial day spent in Hong Kong is still counted as a full day.

Even if you do not fulfil the specified conditions for a full exemption from Salaries Tax, depending on the circumstances of your case, you may still be eligible for a partial exemption of income or tax credit claim to reduce your Salaries Tax liabilities in Hong Kong.  

7.  If I am married, should I elect Joint Assessment in my Individual Tax Return (Form BIR 60)?

Generally speaking, separate assessment is beneficial if both the husband and the wife are chargeable to Salaries Tax, and the income of each of them exceeds the limit of the Basic Allowance (i.e. HK$132,000 for 2025/26 and HK$145,000 for 2026/27).

If you are married and your spouse does not have income assessable under Salaries Tax, you are entitled to claim Married Person’s Allowance (i.e. HK$264,000 for 2025/26 and HK$290,000 for 2026/27) and do not need to elect Joint Assessment in your Individual Tax Return (Form BIR 60).

If both you and your spouse have income assessable under Salaries Tax, you and your spouse may elect to be jointly assessed (i.e. under Joint Assessment) if the election can reduce the overall tax liability. In general, Joint Assessment can be advantageous for a married couple if the net income of one spouse is less than the total amount of the Personal Allowances to which he or she is entitled. 

8.  If I want to claim a tax deduction for self-education expenses, do I need to submit documentary evidence when I file my Individual Tax Return for the IRD’s examination?

If you have incurred self-education expenses, including tuition and examination fees, in connection with a prescribed course of education undertaken by you to gain or maintain qualifications for use in your employment and you want to claim such expenses as a tax deduction, you do not need to submit any documentary evidence when you file your Individual Tax Return (Form BIR60) in support of the deduction claim. However, you should retain the relevant supporting documents (e.g. receipts) for a period of 6 years after the expiration of the year of assessment in which the payments were made and submit them to the IRD for examination upon request in case your deduction is selected for review at a later time.

9.  In the year of assessment of 2025/26, can I get any reduction in Salaries Tax?

In the 2026/27 Hong Kong Budget delivered on 26 February 2026, the Financial Secretary proposed a one-off reduction of 100% of the final tax for the year of assessment 2025/26 in respect of Profits Tax, Salaries Tax and tax under Personal Assessment, subject to a ceiling of HK$3,000 per case. The IRD will reflect the tax reduction in the tax demand notes to be issued. 

10.  If my parents/grandparents are under employment, can I still claim the Dependent Parent Allowance/Dependent Grandparent Allowance?

You are entitled to the Dependent Parent Allowance/Dependent Grandparent Allowance in respect of each parent/grandparent maintained by you/your spouse, provided your spouse is not living apart from you during the year of assessment. To qualify for such allowances, the parent/grandparent must at any time during the year be: -

• ordinarily resident in Hong Kong;
• aged 55 or more, or eligible to claim an allowance under the Government's Disability Allowance Scheme; and
• residing with you/your spouse, without paying the full cost, for a continuous period of not less than 6 months, or having received from you/your spouse not less than HK$12,000 in money towards his/her maintenance.

If your parent/grandparent resides, without paying the full cost, with you continuously throughout the whole year, you are also entitled to an additional Dependent Parent Allowance/additional Dependent Grandparent Allowance.

In light of the above, you can still claim the Dependent Parent Allowance/Dependent Grandparent Allowance if the above conditions are satisfied regardless of whether your parents/grandparents are employed or not.

11.  Can I claim Dependent Parent Allowance or Dependent Grandparent Allowance jointly with my brothers or sisters?

No. Only one individual will be granted a Dependent Parent Allowance or Dependent Grandparent Allowance in respect of a parent or grandparent maintained by that individual or by his or her spouse. If two or more siblings are entitled to claim Dependent Parent Allowance or Dependent Grandparent Allowance for the same parent or grandparent, they must agree among themselves on who will claim the allowance. The IRD will not consider a claim for Dependent Parent Allowance or Dependent Grandparent Allowance made by two or more siblings for the same parent or grandparent until the claimants have reached a consensus on who is entitled to make such claim. 

12.  How can I claim the basic domestic rent deduction?

An individual taxpayer who is chargeable to Salaries Tax or tax charged under Personal Assessment is eligible to claim a tax deduction for domestic rental expenses paid by him/her or his/her spouse as a tenant under a qualifying tenancy of domestic premises.

To be eligible for domestic rent deduction, the rented domestic premises must be used by the taxpayer as his/her principal place of residence in Hong Kong. In addition, the agreement for the qualifying tenancy (or sub-tenancy) of the domestic premises must be stamped in accordance with the Stamp Duty Ordinance. 

The ceiling amount of the basic domestic rent deduction is HK$100,000 per year of assessment. 

If there is more than one tenant under a qualifying tenancy, the deduction ceiling applicable to such tenancy will be reduced in proportion to the number of tenants under the tenancy.

In the event that the period of a tenancy for which the domestic rent is paid covers only a part of a year of assessment (i.e. less than 12 months), the deduction ceiling will be reduced in proportion to the length of the period covered by the tenancy within that year of assessment.

There are many circumstances under which the domestic rent deduction will not be allowed. For example, if the taxpayer or the taxpayer’s spouse (who is not living apart from the taxpayer) is a legal and beneficial owner of any domestic premises in Hong Kong, if the rents payable or paid by the taxpayer or the taxpayer’s spouse in respect of a place of residence are wholly or partly paid or refunded by the employer or its associated corporation, etc.

A taxpayer who wishes to claim a domestic rent deduction should retain documentary evidence showing that the premises were used as his/her place of residence.

13.  How can I claim the additional domestic rent deduction?

If you reside with your child in Hong Kong for a continuous period of not less than 6 months, you are eligible to claim the increased deduction ceiling amount of HK$120,000.

However, even if you do not reside with your child in Hong Kong for a continuous period of not less than 6 months, you are still eligible to elect to use the additional deduction ceiling amount under the following circumstances: -

a.    the year of assessment during which your child is born;
b.    your child studies abroad or studies in a boarding school in Hong Kong, and resides with you in Hong Kong during vacation;
c.    your child resides with you for a shorter period of time due to specific family arrangement, for example,

i.    you are required to work outside Hong Kong frequently;
ii.    the child’s grandparents look after and reside with your child during weekdays, and your child returns home to reside with you during weekends;

d.    the year of assessment during which the child has been hospitalized for a period of time;
e.    the year of assessment during which you depart from Hong Kong for a period of time with your child; or
f.    other reasonable cases.

14.  Can I claim only the additional domestic rent deduction without claiming the basic deduction?

No. If you want to claim the additional deduction, the amount of rent you paid must exceed the ceiling amount for the basic deduction. Therefore, you must claim both the basic deduction and the additional deduction at the same time.

15.  Can I claim tax deductions for Qualifying Annuity Premiums and Tax Deductible MPF Voluntary Contributions (“TVC”)?  

Yes. You may claim deductions under Salaries Tax or Personal Assessment for:

• Qualifying annuity premiums paid under a Qualifying Deferred Annuity Policy ("QDAP"); and
• MPF voluntary contributions paid into a designated TVC account.

A QDAP is an insurance policy certified by the Insurance Authority that provides regular annuity payments during an annuity period and meets prescribed criteria. Deductible “qualifying annuity premiums” are the net amounts you (or your spouse not living apart) pay under one or more QDAPs that relate to annuity payments. The annuitant must be you, your spouse, or both, and must hold a Hong Kong Identity Card during the relevant year of assessment.

TVC are MPF voluntary contributions paid into a specific TVC account established under the MPF legislation. You can only claim TVC paid into a TVC account of which you are the account holder.

For each taxpayer, the aggregate deduction for qualifying annuity premiums and TVC is capped at HK$60,000 per year of assessment (for 2020/21 onwards). If you claim both, the IRD will first allow TVC, then qualifying annuity premiums up to the overall ceiling.

You do not need to submit supporting documents with your tax return, but you must keep QDAP premium records and TVC contribution summaries for 6 years, and notify the IRD within 3 months if any previously claimed premiums are refunded.

16.  Can I claim a tax deduction for Assisted Reproductive (AR) service expenses?  

Yes. You may claim a deduction for qualifying expenses paid for Assisted Reproductive (AR) services. The deduction is available where AR services are received for medical reasons by you, your spouse, or both, and the services are provided by a licensed centre regulated under the Human Reproductive Technology Ordinance.

Qualifying AR service expenses paid in a year of assessment are deductible for that year, subject to a maximum deduction of HK$100,000 per taxpayer per year. The deduction applies to the year of assessment 2024/25 and all subsequent years of assessment.

You are not required to submit supporting documents together with your tax return, but you must retain the relevant medical certificates, invoices and receipts for at least 6 years after the end of the relevant year of assessment, and be prepared to provide them to the IRD if your case is selected for review.

17.  How can tax-efficient housing benefits or schemes reduce my Hong Kong Salaries Tax?  

Well structured housing benefits can be significantly more tax efficient than taking the same amount as cash salary or a simple “housing allowance”.

Where your housing is properly set up as an employer provided benefit (for example, employer provided accommodation or a genuine rent reimbursement arrangement), the value taxed is usually based on a deemed rental value (a fixed percentage of your income) rather than the full cash paid. In many cases, this results in a lower overall taxable amount compared to receiving the same support as fully taxable cash.

The IRD pays close attention to housing arrangements to distinguish between genuine housing benefits and cash disguised as rent. The way the housing policy is drafted, how reimbursements are processed, and how records are kept are all critical in determining whether you can enjoy the more favourable tax treatment. With careful planning, it is often possible to:

• Convert part of an existing cash package into a more tax efficient housing benefit; and
• Design or refine an internal housing scheme that is robust from a tax perspective and easier to defend in an IRD enquiry.

18.  If I have derived business profits or received rental income in addition to my salary, should I elect Personal Assessment when completing my Individual Tax Return (Form BIR 60)? 

You may elect Personal Assessment if you have to pay Profits Tax and/or Property Tax in addition to Salaries Tax. Depending on your situation, the election of Personal Assessment may reduce your tax liability, but sometimes it may not.  

In general, if you are a sole proprietor or an individual partner who has derived business profits, your profits are subject to Profits Tax. If you own a property and receive rental income, your rental income will be subject to Property Tax. Both Profits Tax and Property Tax are charged at the standard rate. However, if you are eligible to elect Personal Assessment, you may reduce the tax you need to pay by aggregating your assessable income under Salaries Tax, Profits Tax and Property Tax and then applying the progressive Salaries Tax rates to calculate your total tax payable. 

In the case of a sole proprietorship or a partnership business that has suffered losses, such losses may be used to offset against the income that is subject to Property Tax and/or Salaries Tax. In addition, if a married person chooses to be assessed jointly with his/her spouse under Personal Assessment, any deductions and losses exceeding the total income of the married person can be used to offset against the total taxable income of his/her spouse. 

All in all, by electing Personal Assessment, it may be possible to achieve tax savings. 

19.  I am employed by a Hong Kong company and am about to cease my employment and leave Hong Kong permanently. What obligations do my employer and I have to fulfill before my departure from Hong Kong?  

Your employer is required to inform the IRD of your cessation of employment and departure from Hong Kong by filing a duly completed Form IR56G not later than one month before your expected date of departure. Your employer is also required to withhold all payment of any amount (including salaries, commission etc.) due to you for one month from the date on which the IR56G was filed, or until receipt of the “Letter of Release” which will be issued by the IRD after you have settled your tax, whichever is earlier. 

As an individual taxpayer, you are required to notify the IRD in writing not later than one month before your intended date of departure from Hong Kong. The IRD will issue an Individual Tax Return (Form BIR 60) to you upon receiving your notification. For tax clearance purposes, you should bring a copy of the Form IR56G issued by your employer (together with the necessary supporting documents) and attend the IRD in person to clear your tax before departing from Hong Kong. Alternatively, you may appoint a tax representative to handle your tax clearance process. 

If you fail to settle your taxes before departure, the IRD may issue a garnishee notice to your employer requiring your employer to settle your taxes from the money withheld (since in such case the “Letter of Release” may not be obtained). Both you and your employer must fulfil the legal obligations to notify the IRD of your impending departure and follow the necessary tax clearance procedures. 

20.  What are the advantages of engaging a top-tier tax advisor (like PKF Hong Kong) to act as your personal tax representative to best prepare your Individual Tax Return (Form BIR 60)?: -  

• To prevent incorrect tax filing - we will prepare your Individual Tax Return (Form BIR 60) with a view to ensuring proper tax treatment of all your taxable income, benefits-in-kind or fringe benefits.
• To help you obtain the tax deduction or allowance you are entitled to - we will help you claim the proper amounts of Personal Allowances and Allowable Deductions (e.g. Basic Allowances, Married Person’s Allowances, Child Allowances, etc.) with a view to reducing your overall tax liability in a proper and legitimate way.
• To file your Individual Tax Return (Form BIR 60) on time - to avoid penalty that may arise because of late tax filing.
• To prepare a clear and easily comprehended Salaries Tax computation showing your taxable income, the Personal Allowances and the Allowable Deductions to which you are entitled, and the amount of tax liability (by applying the applicable tax rates), so that you can have a better idea of how much tax you will have to pay.
• To check the Notice of Tax Assessment to be issued by the IRD to make sure that the IRD’s computation is in line with the details reported in the Individual Tax Return and advise you of the tax payment due date(s).
• To assist you in applying for an extension of time for filing the Individual Tax Return, if necessary.
• To assist you in answering any queries that may be raised by the IRD with regard to any deduction or tax exemption claims made by you in your tax filings.
• To assist you in notifying the IRD of your chargeability to tax before the statutory notification due date. This is important because an individual taxpayer who has derived taxable income is required to inform the IRD in writing of his chargeability to Salaries Tax within 4 months after the end of the tax year (unless he or she has already been furnished with an ITR). Failure to notify chargeability before the statutory deadline is an offence that is subject to a penalty of HK$10,000 plus up to 300% of the tax liability. 

As one of Hong Kong’s leading tax advisors, PKF Hong Kong's professional tax advisors provide comprehensive tax and business advisory services in respect of the Hong Kong tax regime. For further information about how we may assist you, please do not hesitate to contact your usual PKF tax executives, or reach out to our Tax Partner, Henry Fung (henryfung@pkf-hk.com).

IMPORTANT NOTE: The information contained in this document is only for general information and is not intended to address the circumstances of any particular entities or individuals. Accordingly, this document does not constitute accounting, tax, legal, investment, consulting, or other professional advice or services. No action should be taken solely on the basis of the contents of this document which only contain a brief outline of the relevant laws. Before taking any action, please ensure that you obtain advice specific to your circumstances from your usual PKF tax partners or other tax advisers or liaise with the relevant tax authorities. We accept no responsibility or liability to any persons choosing to take action or implement business plans or activities solely or partially based on this document.