Child allowance and the salaries tax it saves.
Total child allowance
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Newborn extra
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Estimated tax saving
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Your breakdown
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An allowance shrinks the income that gets taxed
The child allowance is one of Hong Kong's personal allowances, and it works differently from a deduction for an expense. Allowances are subtracted from your income to arrive at the net chargeable income on which the progressive scale runs. They do not reduce the tax bill directly; they reduce the income that the tax is calculated on. For 2025/26 the allowance this calculator applies is $130,000 for each child, claimed for an unmarried child under 18, or under 25 and in full-time education, or any age if unable to work through disability. Only one parent claims for a given child, so couples usually give the whole allowance to whoever sits in the higher tax band to squeeze out the most benefit.
The newborn year is worth double
There is a generous quirk in the year a child is born. On top of the ordinary $130,000, you can claim an additional newborn allowance of the same amount, so the allowance for that child doubles to $260,000 for the year of birth alone. It drops back to the standard $130,000 in every following year. For a higher-rate parent this one-year bump is a meaningful saving timed to exactly when a new baby is stretching the household budget. As with all these figures, treat the per-child and newborn amounts as the tool's assumption and confirm the current numbers with the Inland Revenue Department, since allowances are reviewed in the Budget.
Two children, one of them a newborn
Take a top-band parent with two children, one of whom was born during the year. The standard allowance covers both children, and the newborn adds a second slice for the baby. The saving is the total allowance multiplied by the marginal rate, here 17 percent:
The total allowance of $390,000 lifts $66,300 off the tax bill for a top-band parent, with $22,100 of that coming purely from the newborn slice. The chart breaks the allowance into the two children's standard amounts and the one-year newborn bonus.
A point worth getting right
This tool multiplies the allowance by a single marginal band you choose, which is the clean way to see the saving when your income sits comfortably inside one band. In reality the allowance peels income off the top of your chargeable amount, so if claiming it drags you down through a band boundary, part of the saving is at a slightly lower rate than your top band. For most parents the difference is small. It matters if your income hovers near a band edge, in which case the full salaries tax computation gives the exact figure. The allowance also stacks with other reliefs you qualify for, such as the dependent parent allowance, each subtracted before the scale runs. One more thing catches new parents out. The allowance is given for the whole year of assessment regardless of which month the child was born, so a baby arriving in March attracts the same full allowance as one born in April. There is no proration by the number of months, which makes the newborn year unusually valuable.
Which parent should claim the child allowance?
The parent in the higher tax band, because the saving equals the allowance times that band. If one parent pays at 17 percent and the other at 6 percent, giving the whole allowance to the higher earner saves far more. You cannot split a single child's allowance between you, so decide together and elect accordingly.
Can I claim for a child studying overseas?
Yes, the child allowance is not restricted to children educated in Hong Kong. A child under 25 in full-time education at a recognised institution abroad still qualifies, provided the other conditions are met. Keep enrolment evidence in case the IRD asks, since it can request proof of the child's full-time study.