How much of a raise you keep after tax and MPF.
Net amount you keep
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Extra salaries tax
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Extra MPF
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Your breakdown
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Why a raise feels bigger in Hong Kong than almost anywhere
If you have ever moved a salary across borders, you will know the sinking feeling of watching a pay rise vanish into higher tax bands. Hong Kong is unusually kind on this front. Salaries tax is charged on the lower of two computations: a progressive scale that runs in five steps of 2, 6, 10, 14 and 17 percent across successive bands of net chargeable income, or a flat standard rate applied to net total income before personal allowances. Because the top progressive marginal rate is capped at 17 percent, and the standard rate acts as a ceiling on the whole bill, no slice of your raise can be taxed at more than that. There is no surtax, no social-insurance levy that climbs with income, and crucially no capital gains tax, dividend tax, or sales tax to claw money back elsewhere. The figures this tool uses follow the 2025/26 year of assessment, and you should confirm the current bands with the Inland Revenue Department before relying on them.
Where the MPF ceiling changes the picture
The second deduction that normally bites a raise is the Mandatory Provident Fund. You and your employer each contribute 5 percent of relevant income, but only up to a monthly income ceiling. As modelled here, that ceiling sits at $30,000 a month, which caps each side at $1,500 a month, or $18,000 a year. The practical consequence is the part most people miss: once your monthly salary is already above that ceiling, a raise adds nothing to your MPF at all. Your contribution was already maxed out. The MPFA sets these thresholds and has floated raising them, so treat the ceiling as the calculator's working assumption and verify the live figure. For anyone earning below the ceiling, a raise does add a little MPF, and the tool shows that smaller amount separately.
A $60,000 raise on a $500,000 salary, traced step by step
Take the defaults: a current salary of $500,000, deductions of $18,000, allowances of $132,000, and a raise of $60,000. Using the rates this calculator applies, your tax before the raise is $38,500, and after the raise it is $48,700. The extra salaries tax is therefore $10,200, which is exactly 17 percent of the raise, because at this income every extra dollar falls in the top progressive band. Your monthly salary already sits well above the MPF ceiling, so there is no extra MPF. You keep $49,800 of the $60,000, an effective retention of 83 percent.
A judgement call before you celebrate
The number this tool gives is the cash difference in a steady year, not the full negotiation. A practical tip: if your raise pushes you across the threshold where progressive tax stops being cheaper than the standard rate, the marginal cost flattens rather than rising, so a large jump is not penalised the way it would be under a steeper system. Watch one edge case, though. If you also take on a deductible commitment in the same year, such as topping up tax-deductible voluntary contributions or a qualifying annuity, the marginal value of the raise can shift, because deductions reduce the income taxed at 17 percent first. The calculator assumes your deductions and allowances stay fixed, so re-run it if either changes.
Common questions about keeping a raise
Does a bonus get taxed more heavily than a salary rise?
No. Hong Kong does not run a separate withholding scheme for bonuses, and there is no payroll cliff that punishes a lump sum. A bonus is added to your assessable income for the year and taxed under the same progressive scale or standard rate, whichever is lower. The marginal cost of an extra dollar is the same whether it arrives as a monthly rise or a year-end bonus.
Why might my employer's MPF cost rise even when mine does not?
It will not, above the ceiling. Both the employee and employer contributions stop growing once relevant income passes the monthly ceiling the calculator uses. If you are below it, both sides scale up together at 5 percent each. Either way the employer's mandatory share never exceeds the same $1,500 a month, so a senior-level raise carries no extra mandatory pension cost for the firm.