As a busy founder, your time is better spent scaling the business than wrestling with tax forms. The Salary Tax Return (BIR60) is simply the Inland Revenue Department’s yearly snapshot of what you’ve earned from salaries, director’s fees, or pensions in Hong Kong.
In the next few minutes, we’ll cut through the red tape—flagging deadlines, must-have documents and common slip-ups, so you can lodge with confidence. Less paperwork, more time to build your next big thing.
Let Sleek simplify your BIR60 filing
What is salaries tax in Hong Kong?
Salaries Tax is Hong Kong’s personal income tax on money you earn from employment, directorships, or pensions that arise in (or are sourced from) Hong Kong. It’s charged each year (1 Apr–31 Mar) on your net chargeable income after deductions and allowances, at progressive rates of 2%–17% or a flat 15% standard rate, whichever is lower.
Key points
- Applies to employees, company directors and pension recipients with Hong Kong–sourced income
- Net Chargeable Income = Total income – deductions – allowances
- Reported via the annual BIR60 Salaries Tax Return issued by the Inland Revenue Department (IRD)
Keep these basics in mind, and you’ll know exactly why that BIR60 lands in your mailbox each year and what figures matter when you file.
How to calculate salaries tax in Hong Kong
In Hong Kong taxation, salaries tax system is based on a progressive rate structure. This means that the more you earn, the higher the tax rate on portions of your income.
However, there’s also a standard rate to ensure that high-income earners do not pay an excessive amount of tax. You will pay whichever calculation—the progressive rate or the standard rate—results in a lower tax bill.
Two ways salaries tax is calculated
- Progressive Tax Rates: Your income is divided into bands, and each band is taxed at a different rate.
- Standard Tax Rate: A flat rate is applied to your net income.
Note: You will always pay the lower of the two calculated amounts.
Basic formula for salaries tax
The foundation of the salaries tax calculation is a simple formula:
Net Chargeable Income = Total Income – Total Deductions – Total Allowances
Let’s break down each part of this formula.
Step 1: Figure out your total income
Your total income, or assessable income, includes your salary, any bonuses, commissions, and certain benefits provided by your employer.
Step 2: Subtract Your Deductions
You can lower your taxable income by claiming certain deductions. Here are some of the most common ones for the 2024/2025 tax year:
Deduction | Maximum Amount (HK$) |
$18,000 | |
Self-Education Expenses | $100,000 |
Approved Charitable Donations | Up to 35% of your assessable income after deductions |
Home Loan Interest | $100,000 |
Step 3: Claim Your Allowances
Allowances further reduce your taxable income. The allowances you can claim depend on your personal circumstances. Here are the key allowances for the 2024/2025 tax year:
Allowance | Amount (HK$) |
Basic Allowance | $132,000 |
Married Person’s Allowance | $264,000 |
Child Allowance (per child) | $130,000 |
Additional Child Allowance in the year of birth | $130,000 |
Dependent Parent/Grandparent Allowance (aged 60+) | $50,000 |
Dependent Parent/Grandparent Allowance (aged 55-59) | $25,000 |
Single Parent Allowance | $132,000 |
Personal Disability Allowance | $75,000 |
Step 4: Calculate your tax at progressive rates
Once you have your Net Chargeable Income (Total Income – Deductions – Allowances), you can apply the progressive tax rates for the 2024/2025 tax year:
Net Chargeable Income (HK$) | Rate |
On the first $50,000 | 2% |
On the next $50,000 | 6% |
On the next $50,000 | 10% |
On the next $50,000 | 14% |
Remainder | 17% |
Step 5: Calculate your tax at the standard rate
As an alternative, your tax is also calculated using the standard rate. For the 2024/2025 tax year, a new two-tiered standard rate applies:
- 15% on the first $5,000,000 of your net income (Total Income – Deductions).
- 16% on the remainder of your net income.
Step 6: Find your final tax payable
Compare the tax calculated using the progressive rates (Step 4) with the tax calculated using the standard rate (Step 5). Your tax liability will be the lower of these two amounts.
A special note for the 2024/2025 tax year
The Hong Kong government has announced a one-off tax reduction of 100% of the final tax payable, capped at $1,500. This reduction will be automatically applied to your final tax bill.
By following these steps, you can get a clear picture of how your salaries tax is calculated in Hong Kong.
How to file salaries tax in Hong Kong?
Typically, the IRD sends out individual tax returns, known as Form BIR60, on the first working day of May each year. If you are new to working in Hong Kong, your employer will notify the IRD, which will then issue a tax return to you.
Step 1: Receive your tax return
You will receive your tax return by post at your registered address. If you haven’t received it by mid-May, you should inform the IRD to ensure you can file on time.
Step 2: Choose your filing method
You have two main options for filing your salaries tax return:
- Online Filing via eTAX: This is the most convenient and recommended method. It offers an automatic extension of the filing deadline.
- Paper Filing: You can fill out the physical BIR60 form and mail it back to the IRD.
Step 3: Gather your necessary information
Before you start filling out your return, make sure you have the following information and documents ready:
- Your Personal Details: This includes your full name, Hong Kong Identity Card (HKID) number or passport number, and contact information.
- Income Details: Your total salary, bonuses, commissions, and any other employment-related income for the financial year (April 1 to March 31). This information is usually detailed in the Form IR56B provided by your employer.
- Deductions: Records of any allowable deductions you plan to claim, such as:
- Mandatory Provident Fund (MPF) or other recognized occupational retirement scheme contributions.
- Approved charitable donations.
- Self-education expenses.
- Home loan interest payments.
- Allowances: Information to support any allowances you are claiming, such as your spouse’s and children’s personal details for married person’s and child allowances.
Step 4: Complete your tax return
If Filing Online via eTAX:
- Log In: Visit the IRD’s eTAX portal and log in using your Taxpayer Identification Number (TIN) and eTAX password, or with your digital certificate.
- Fill in the Form: The online system will guide you through each section. Much of your personal information may already be pre-filled. Enter your income, deductions, and allowances in the relevant fields.
- Sign and Submit: Review all the information for accuracy. You will “sign” the form digitally before submitting it electronically. You will receive an instant acknowledgement.
If Filing by Paper:
- Fill Out the Form: Use a blue or black pen to complete all the required sections of your BIR60 form.
- Sign the Form: Ensure you sign and date the declaration on the form.
- Mail It: Post the completed form to the IRD at G.P.O. Box 132, Hong Kong. Do not include original documents unless specifically requested; keep copies for your records.
Step 5: Adhere to the filing deadline
The deadline for filing your tax return is crucial to avoid penalties.
- Standard Deadline (Paper Filing): Usually one month from the date the return was issued (e.g., early June).
- Automatic Extension (eTAX Filing): Filing online typically grants you an automatic one-month extension.
Specific dates are always printed on the tax return itself.
What happens next?
After you have filed your return, the IRD will review your information and send you a Notice of Assessment. This document will show the amount of tax you need to pay and the due date for payment. Always review the assessment notice carefully and inform the IRD of any discrepancies within the specified time limit.
When to file salaries tax
Timely compliance in Hong Kong starts with the calendar: every taxpayer must react quickly once the Inland Revenue Department issues its annual return, and special deadlines apply if you operate a sole-proprietorship, file through eTAX, or leave the city permanently.
Annual “Main Season”
Step | Typical 2024/25 Example* | Rule |
BIR60 issued | 2 May 2025 (first working day of May) | IRD posts or releases the Tax Return – Individuals to every taxpayer. |
Standard filing deadline | 2 June 2025 | Lodge the return within one month of its issue date. |
Sole-proprietor due date | 2 August 2025 | If you also run an unincorporated business, you automatically get a three-month window. |
eTAX bonus | 2 July 2025 | File online and IRD gives an extra month on top of the standard limit. |
*Dates shift each year; substitute the actual “first working day of May” printed on your BIR60.
What happens if you did not receive a return?
If the IRD has not sent you a BIR60 by early June, but you earned chargeable income in the year ended 31 March, you are legally obliged to notify the IRD within four months after the year of assessment (i.e., by 31 July).
Off-cycle situations
Scenario | Action |
Started employment mid-year | You may still be issued a normal BIR60 in May; file by the standard deadlines. |
Leaving Hong Kong permanently | Employer must lodge IR56G; you must settle all tax and obtain a Letter of Releaseat least one month before departure. |
Ceased employment / changed jobs | Employer files IR56F; continue to file your BIR60 when it arrives. |
Extensions beyond the automatic periods
- Professional “Block Extension Scheme”: Registered tax representatives can secure bulk extensions.
- Individual written application: IRD may grant extra time for exceptional reasons (e.g., serious illness), but interest may still accrue.
Late-filing consequences (timeline)
Days Late | Possible Penalties |
1 day – 6 months | Fixed fine (currently HK $1,200) + initial 5 % surcharge on any unpaid tax. |
> 6 months | Additional 10 % surcharge on outstanding balance. |
Persistent or wilful default | Prosecution; fines up to 300 % of under-charged tax and/or imprisonment. |
Key Takeaway:
Mark the first working day of May as the start of your filing season, diarise the one-month response window (or relevant automatic extension), and act promptly if your circumstances change or you have not received a return. Doing so keeps you within Hong Kong’s self-assessment rules and avoids costly penalties.
Your obligations as an employer in filing salaries tax
Your primary responsibility is to accurately report the income paid to your employees to the Inland Revenue Department (IRD) using different IR56 forms. Fulfilling these obligations in a timely manner is essential to avoid penalties and ensure your employees can file their personal taxes correctly.
Here is a breakdown of your key responsibilities.
✔ File the Annual Employer’s Return (Forms BIR56A and IR56B)
✔ Report new employee hires (Form IR56E)
✔ Report Departing Employees (Form IR56F / IR56G)
✔ Maintain Accurate Records
You are legally required to keep payroll records for all your employees for at least seven years. These records must be sufficient to verify the information you report to the IRD on the forms mentioned above.
Do you need to file BIR60 for your salary as a business owner?
Whether the pay you draw from your own business belongs in Part 4 (Salaries Tax) or Part 5 (Profits Tax) of the BIR60 depends entirely on the legal form of the business, not on the fact that you sign your own paycheck.
Business structure | Where your remuneration goes on BIR60 | Other compliance points |
Sole proprietorship | Treat the “salary” as part of the business’s assessable profits and enter it in Part 5 – Profits Tax (Item 7). Do not repeat the figure in Part 4. | |
Partnership | Your drawings are allocated in the Profits Tax Return (BIR52) and flow through to each partner’s share; they are not reported again under Salaries Tax in your individual BIR60. | |
Limited company (you are a shareholder-director/employee) | Report director’s fees and any other remuneration in Part 4 – Salaries Tax of BIR60. The company must also file IR56B for you. | Director’s pay is chargeable to Salaries Tax just like any other employment income. |
Key reminders
- BIR60 is designed to capture both salaries income and profits from any sole-proprietorship you ran during the year, so you must still file the return even if your “salary” is re-coded as profits.
- Re-labelling sole-prop drawings as a salary does not move them into the Salaries Tax regime—it merely reshuffles money within the same business and remains assessable under Profits Tax.
- For company owners, paying yourself through payroll automatically creates a dual obligation: the employer reports via IR56B and the individual reports via Part 4 of BIR60.
- Service-company or “management fee” arrangements can be re-characterised by the IRD under section 9A if they replicate employment; seek advice if you fall into that area.
In short: Sole-prop and partnership owners report their drawings in the Profits Tax section, while owner-directors of limited companies report under salaries tax and file the usual employer forms.
File salaries tax with confidence
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FAQs about salary tax
What is “salaries tax” and how is it different from profits tax?
Salaries Tax is a personal levy on Hong-Kong-sourced employment income; Profits Tax targets the profits of a trade, profession or business carried on in Hong Kong—two distinct charges under the Inland Revenue Ordinance.
When will my BIR60 arrive?
The Tax Return–Individuals is mailed or released online on the first working day of May each year (e.g., 2 May 2025 for YA 2024/25).
Can I skip tax if I’m in Hong Kong fewer than 60 days?
Yes, non-HK employment income is exempt if your Hong Kong “visits” total ≤ 60 days in the year of assessment.
Do part-time workers, freelancers, or the self-employed need to file BIR60?
Yes, anyone receiving a BIR60 must file it; the form also captures sole proprietorship profits, so self-employed and casual earners are squarely in scope.
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