15% to HK$5m, then 16% on the balance.
Standard rate tax
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First tier (15%)
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Second tier (16%)
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Your breakdown
Updates live as you typeA ceiling on tax, not an extra layer
The standard rate is best understood as a cap. Hong Kong works out your salaries tax two ways and charges whichever is lower. One method is the progressive scale of 2 to 17 percent on net chargeable income after allowances. The other is the standard rate on net total income before any allowances. The standard rate exists so that high earners, whose progressive bill would otherwise climb without limit, never pay more than a fixed proportion of their income. It is not added on top of the progressive tax. It replaces it when it comes out lower, which only happens at high incomes. This calculator isolates that standard-rate figure so you can see what the ceiling would be.
Splitting the rate into two tiers
From the 2024/25 year of assessment the standard rate itself became two-tiered. The first $5,000,000 of net total income is charged at 15 percent, and anything above that at 16 percent. The aim was to ask a little more of the very highest earners while leaving the rate unchanged for everyone below the threshold. The rates and the $5,000,000 threshold are the figures this calculator models, and because they were set in a Budget you should confirm the current ones with the Inland Revenue Department before relying on them.
Six million of net total income
Take a net total income of $6,000,000. The first $5,000,000 is taxed at 15 percent, giving $750,000. The remaining $1,000,000 sits in the second tier at 16 percent, giving $160,000. The standard-rate tax is $910,000. Using the rates this calculator applies, the second tier added $160,000 on top of the first-tier charge, and only the slice above $5,000,000 felt the higher 16 percent.
The chart breaks the bill into its two tiers. The dark block is the small extra the second tier adds once income crosses $5,000,000.
When the standard rate actually bites
For most salaried people the progressive method wins, because their allowances and the gentle lower bands keep the progressive figure below 15 percent of income. The standard rate only takes over once income is high enough that the progressive bill would exceed the flat charge, which in practice means well into seven figures of net total income. That is why the second tier matters to a narrow group. At exactly $5,000,000 of net total income the second tier is zero, so the 16 percent rate touches only the portion of income above that mark, never the whole amount.
A point people get wrong about allowances
The standard rate is charged on net total income, which is your income after allowable deductions such as mandatory MPF contributions and approved charitable donations, but before personal allowances like the $132,000 basic allowance or any dependant allowances. Those allowances only reduce the progressive computation. So a high earner with many children gains nothing on the standard-rate side from those child allowances, because the standard rate ignores them. This is exactly why the standard rate becomes the binding figure for the wealthy: their allowances cannot pull the progressive bill low enough to stay below the cap. Hong Kong has no separate tax on dividends, interest or capital gains, so those generally never enter net total income in the first place.
Does everyone pay the standard rate?
No. You only pay it if it produces a lower bill than the progressive scale, which is a minority of taxpayers at the top of the income range. The IRD automatically charges whichever method gives the smaller figure, so you do not choose, and most people simply pay under the progressive scale.
Is the two-tier standard rate the same as the two-tier profits tax?
No, they are different regimes that happen to share the word two-tier. The standard rate here is salaries tax on individuals, split at $5,000,000 between 15 and 16 percent. The two-tier profits tax is for businesses, split at $2,000,000 between a lower and an upper rate. Do not confuse the thresholds.
Does the Budget rebate apply to standard-rate tax too?
When a one-off salaries tax reduction is announced in the Budget, it is generally applied to the final salaries tax payable whether that figure came from the progressive or the standard-rate method, subject to the per-case cap. Check the specific year's concession with the IRD, since the cap and whether it applies can change annually.