The 13th-month salary and the tax it attracts.
Double pay amount
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Extra tax on it
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Net double pay
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Your breakdown
Updates live as you type| Step | Twelve months only | Including double pay |
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Double pay is a custom, not a statutory right
Hong Kong has no law that forces an employer to pay a 13th-month salary. It is a contractual or customary arrangement, common in banking, trading houses and older local firms, usually paid just before Lunar New Year. The Employment Ordinance only steps in once an employer has agreed to pay it, either in writing or by an established practice. If your contract says you get an end-of-year payment, the timing and the proration rules for someone who joins or leaves part way through the year are set out in Part IIA of that ordinance. This tool does not decide whether you are owed double pay. It assumes you are, and works out what lands in your account after tax.
How salaries tax treats the extra month
There is no separate rate for a 13th-month cheque. It joins the rest of your income for the year of assessment and is taxed under salaries tax like any other pay. Hong Kong then charges the lower of two figures: a progressive scale on your net chargeable income, or a flat standard rate on your net total income before allowances. The progressive scale runs in bands of $50,000, taxed at 2, 6, 10, 14 and then 17 percent on the balance, which are the rates this calculator applies for 2025/26. The standard rate, modelled here at 15 percent on the first $5 million and 16 percent above, almost never bites for an ordinary salary, so most people sit firmly on the progressive scale. Treat every one of those figures as the calculator's working assumption and confirm the current bands and the basic allowance, set here at $132,000, with the Inland Revenue Department before you rely on them.
Why the same month is taxed differently for different people
Because the calculation is progressive, the same $40,000 of double pay can be taxed at very different rates depending on how much you already earn. For a high earner whose income is well into the top band, the extra month is taxed at a flat 17 percent. For someone on a lower salary, part of it may fall in the 10 or 14 percent band, so the bite is gentler. That is exactly why a comparison method, computing your tax with and then without the payment, beats guessing a single rate.
A worked case on a $20,000 monthly salary
Take someone earning $20,000 a month, with $12,000 of MPF deductions and the basic allowance of $132,000. Twelve months of pay is $240,000, which after deductions and the allowance leaves $96,000 of net chargeable income. Add one month of double pay and the figure rises by $20,000. Working it through with the rates this calculator applies:
The tax payable rises from $760 to $2,600, so the double pay adds $1,840 of tax and you keep $18,160 of the $20,000. The reason both figures look small is the one-off Budget reduction the tool applies, which currently wipes out salaries tax up to a $3,000 cap and pulls both totals down sharply at this income level. The chart below shows the gross month against the slice that goes to tax and the net you keep.
A point people miss about MPF and timing
Mandatory MPF contributions are 5 percent from each side, but they are capped at $1,500 a month on relevant income of $30,000, the ceiling this calculator and the MPFA both use. If your monthly pay already reaches that ceiling, the double pay usually triggers no extra mandatory MPF at all in the contribution period it falls in, which is why the take-home can be larger than people expect. Confirm your scheme's treatment of irregular payments with your trustee, since rules on how a lump sum is spread can vary.
Is double pay the same as a contractual bonus?
Not quite. Double pay is a fixed extra month, so the amount is predictable. A discretionary bonus is decided by the employer and can be any figure, or nothing. Both are taxed the same way under salaries tax, but only a contractual or customary 13th month carries the proration protection of the Employment Ordinance if you leave mid-year.
Does double pay change my provisional tax?
It can. The IRD bases next year's provisional salaries tax on this year's income, so a year that included double pay lifts the provisional demand. If the payment was one-off or your income will fall, you can apply to hold over part of the provisional tax. Keep your assessment notice to check the figure.