Compare both computations and see which one the IRD charges.
Tax charged (lower of the two)
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Progressive
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Standard
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Difference
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Your breakdown
Updates live as you type| Method | Base it taxes | Tax |
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The IRD runs your tax twice and bills the smaller result
Hong Kong's salaries tax has a feature that catches newcomers off guard: there are two completely separate ways to compute your bill, and you pay whichever is lower. The Inland Revenue Department does both calculations for you and charges the smaller figure, so no one ends up worse off for the existence of the second method. This calculator lays the two side by side so you can see exactly which one is deciding your tax and by how much.
The two methods differ in both the rate and the base they apply to. That combination is what makes the outcome flip from one taxpayer to another, and it is worth understanding rather than treating the final number as a black box.
Progressive on chargeable income, standard on total income
The progressive method applies rates of 2, 6, 10, 14 and 17 percent to successive bands of net chargeable income, which is your income after both deductions and personal allowances. Because the lower bands are taxed gently and allowances come off first, this method favours lower and middle earners. The standard method, by contrast, applies a flat 15 percent to net total income up to $5,000,000 and 16 percent above that, the rates this calculator applies, and it grants no allowances at all. It exists to cap the tax of very high earners so the progressive rates never run away with their whole income. Confirm the bands and the standard-rate threshold with the IRD, as they are set in the Budget.
A $800,000 earner with the basic allowance
Take net total income of $800,000 and total allowances of $132,000. The progressive method works on $668,000 of net chargeable income; the standard method works on the full $800,000. Here is how the two land. Note that this comparison shows each computation before the one-off Budget reduction, so you are seeing the raw contest between the two methods.
The progressive method wins by $24,440, mostly because it lets the $132,000 allowance reduce the base and taxes the early bands below 15 percent. For this taxpayer the standard rate is irrelevant. It would only take over at a much higher income, where the average progressive rate climbs past 15 percent.
Where the crossover sits, and what this tool is for
The standard rate only bites when your average progressive rate would otherwise exceed 15 percent. That happens at high incomes, and the exact crossover point depends on your allowances, since larger allowances keep the progressive bill down for longer. A person with many dependants can earn considerably more before the standard rate takes over than a single person on the same salary. The clean takeaway is that the standard rate is a ceiling for the wealthy, not a tax that ordinary earners ever pay.
Use this calculator to understand which lever actually changes your tax. If the progressive method is charging you, then deductions like MPF contributions and allowances for family members directly lower your bill. If the standard method is charging you, those allowances do nothing, and only reducing your net total income helps. Hong Kong does not layer on capital gains tax, dividend tax or a sales tax, so this single comparison really does capture the core of an employee's tax position.
At what income does the standard rate start to apply?
There is no fixed salary figure, because it depends on your allowances and deductions. The standard rate takes over only once your average tax under the progressive bands would exceed 15 percent, which is well into six-figure-plus territory for most people, and higher still for those with large allowances. The calculator shows directly which method is winning for any income you enter.
Does this page include the one-off tax reduction?
No. This comparison deliberately shows each method before the one-off Budget reduction, so you can see the raw contest between progressive and standard. The reduction, capped at $3,000 in 2025/26, is applied afterwards to whichever figure is charged, and a full salaries tax calculator will factor it in.