Total every allowable deduction and its effect on tax.
Total allowable deductions
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Charitable cap (35%)
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Estimated tax saving
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Your breakdown
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How the deduction stack fits into the salaries tax sum
Hong Kong salaries tax works in two layers. First, deductions come off your total income to reach net total income. Then personal allowances, like the basic allowance, come off that to reach net chargeable income, on which the progressive 2 to 17 percent rates apply. This tool sits in the first layer: it gathers every deduction you can claim, applies each one's individual cap, and shows what the combined total does to your tax. Allowances are a separate step, which is why a deductions summary and an allowances calculator are different tools.
The deductions it tracks, each with its own ceiling, are the rates this calculator applies and should be confirmed with the IRD and the MPFA: mandatory MPF up to $18,000, self-education up to $100,000, home loan interest up to $100,000, domestic rent up to $100,000, elderly residential care up to $100,000, approved charitable donations up to 35 percent of income, combined QDAP and TVC up to $60,000, and VHIS premiums up to $8,000 per insured person. The crucial design point is that each is capped on its own before anything is added together.
A $700,000 earner with three deductions running
Take someone earning $700,000 who has the full $18,000 of MPF, paid $40,000 of qualifying self-education fees, and claims $60,000 of domestic rent. All three sit within their own caps, so the combined deduction is $118,000. The saving is the difference between the tax due before and after the deductions, with the basic allowance of $132,000 in place both times.
The $118,000 of deductions cut the tax by $20,060, which is close to the top 17 percent band rate on that amount because this earner's marginal income sits in the upper bands. The chart contrasts the two tax bills and the slice the deductions removed.
The caps that trip people up, and the order they fill in
The mistakes here are nearly always about caps. The charitable donation limit is not a flat figure, it is 35 percent of your income, so a higher earner can give more and still deduct it all, while someone on a modest salary hits the ceiling sooner. The VHIS cap is per insured person, so a family covering three people gets three lots of the $8,000 allowance, not one. And QDAP and TVC share a single $60,000 cap between them, which catches people who max both expecting two separate allowances. This tool applies every cap individually before summing, which is exactly how the IRD treats them, so the total it shows is the genuinely deductible figure rather than the raw amount you spent.
A subtler point worth flagging: the saving the tool reports is computed after the one-off Budget tax reduction that can apply in a given year, which the calculator models with a cap of $3,000 per case. That concession is a year-by-year political decision, so do not assume it will be there next year. The structural deductions are far more durable than the one-off rebate, and they are what you should plan around. If your deductions push your chargeable income low enough that the standard-rate calculation never applies, the saving is purely at your progressive marginal rate, which is why high earners gain the most per dollar deducted.
Can I claim both domestic rent and home loan interest?
Not for the same period. The domestic rent deduction is aimed at tenants and the home loan interest deduction at owner-occupiers, so in practice you claim one or the other depending on whether you rent or own in that year. Each is separately capped at $100,000, but they are not meant to stack on the same home at the same time.
Do deductions or allowances save more tax?
Both reduce the income the progressive rates apply to, so a dollar of deduction and a dollar of allowance save the same amount at your marginal rate. The difference is eligibility and caps, not the rate of relief. Deductions reward actual spending, like MPF or course fees, while allowances reflect your personal and family circumstances, such as having a child or supporting a parent.