Take a single employee on HK$50,000 a month, which is HK$600,000 a year. The mandatory MPF contribution is 5 percent of relevant income but capped at HK$1,500 a month, so the full HK$18,000 a year applies because the salary sits above the HK$30,000 monthly ceiling. That HK$18,000 is also deductible against salaries tax, leaving a net total income of HK$582,000. After the HK$132,000 basic allowance the progressive computation gives HK$58,500, which is lower than the HK$87,300 standard-rate figure, and the HK$3,000 Budget reduction brings tax to HK$55,500. Subtracting both the HK$18,000 MPF and the HK$55,500 tax from the HK$600,000 gross leaves HK$526,500 a year, or about HK$43,875 a month in the hand.
How it is calculated
Take-home pay starts from your gross salary and removes two things, MPF and salaries tax. The employee MPF contribution is 5 percent of monthly relevant income, but it is capped at HK$1,500 a month and waived entirely below HK$7,100 a month, so the annual figure never exceeds HK$18,000. Those mandatory contributions also reduce the income on which salaries tax is charged, up to the same HK$18,000 cap. Salaries tax itself is the lower of the progressive computation on net chargeable income and the standard-rate computation on net total income, after which the one-off Budget reduction is applied. Hong Kong has no separate social security or health levy on payroll, so once MPF and salaries tax are taken out, the remainder is yours.
Frequently asked questions
What is deducted from Hong Kong pay?
Two things reduce your gross salary. The first is the mandatory MPF contribution of 5 percent of monthly relevant income, capped at HK$1,500 a month. The second is salaries tax, charged as the lower of the progressive and standard computations. Your MPF contributions, up to HK$18,000 a year, are also deductible from the income on which salaries tax is charged.
What is the standard rate for Hong Kong salaries tax in 2025/26?
The standard rate is 15 percent of net total income after deductions but before personal allowances. If the tax computed at the standard rate is lower than the progressive rate result, the standard rate applies. This cap protects higher earners from very large tax bills under the progressive schedule.
How does the basic allowance work for single filers in 2025/26?
A single individual receives a basic allowance of HK$132,000 for the year of assessment 2025/26. This amount is subtracted from net total income to arrive at net chargeable income before the progressive tax bands are applied. Married couples filing jointly receive a married person allowance of HK$264,000 instead.
Is there a Budget reduction applied to salaries tax?
Yes. The 2025/26 Budget included a one-off reduction of HK$3,000 applied after the salaries tax liability is calculated. The reduction cannot reduce the tax payable below zero, so it only benefits taxpayers who owe at least HK$3,000. This calculator applies that reduction automatically.