Here is a simple way to think about how salaries tax works in Hong Kong. The government gives you a threshold a set of allowances that together determine how much of your income is sheltered before any rate applies. Everything below it is yours, untouched. Everything above it gets taxed. The interesting question, then, is not really about rates Hong Kong’s rates are famously low and have not changed but about where that threshold sits. In the 2026/27 Budget, the Financial Secretary moved the threshold up. It is, in a real sense, the most important number in the Budget for anyone earning a salary in Hong Kong.
Where the Threshold Moved
Three allowances that apply to almost every taxpayer have increased:
| Allowance | 2025/26 | 2026/27 ✨ |
|---|---|---|
| Basic Allowance | $132,000 | $145,000 |
| Single Parent Allowance | $132,000 | $145,000 |
| Married Person’s Allowance | $264,000 | $290,000 |
A higher allowance directly reduces the amount of income that reaches the tax brackets with no planning required to access the benefit.
If You Have Dependants
The Budget extends beyond individual taxpayers. Family-related allowances, which can significantly shape a household’s overall tax position, have also been revised upward:
| Allowance | 2025/26 | 2026/27 ✨ |
|---|---|---|
| Child Allowance (per child) | $130,000 | $140,000 |
| Additional Child Allowance (per child) | $130,000 | $140,000 |
| Dependent parent / grandparent (aged 60 or above) | $50,000 | $55,000 |
| Dependent parent / grandparent (aged 55 to 59) | $25,000 | $27,500 |
| Elderly residential care expenses deduction ceiling | $100,000 | $110,000 |
For households with children and elderly dependants, several of these allowances may apply simultaneously. The cumulative effect can be considerably larger than any single line suggests.
What This Looks Like in Practice
Take a married couple without children. One spouse earns $600,000 a year. Here is how their salaries tax calculation changes.
| 2025/26 | |
|---|---|
| Income | $600,000 |
| Married Person’s Allowance | − $264,000 |
| Net chargeable income | $336,000 |
| 2026/27 | |
|---|---|
| Income | $600,000 |
| Married Person’s Allowance | − $290,000 |
| Net chargeable income | $310,000 |
The allowance increase alone removes $26,000 from the amount of income that reaches the tax brackets. No change in behaviour. No planning required.
For couples where one spouse also supports an elderly parent, the dependent parent allowance increase compounds on top of this the saving from a single Budget quietly adds up across multiple lines.
Additional One-Off Relief for 2025/26
This year only, the government is offering a 100% reduction of salaries tax and tax under personal assessment, capped at $3,000. What that means is: if your tax bill for 2025/26 is $3,000 or less, you pay nothing. If it is more than $3,000, you get $3,000 knocked off.
The Bigger Picture
Hong Kong has not introduced new credits or layered complexity into the system. It has simply moved the entry point of taxation higher.
That is consistent with how the territory has always approached salaries tax: low rates, simple structure, and predictable adjustments over time. While other tax systems around the world are becoming more complicated and more aggressive, Hong Kong’s clarity continues to be a meaningful advantage.
How Monx Can Help
If you are reviewing your position in Hong Kong or considering how these changes affect your longer-term planning it is worth taking a closer look at how your income and allowances interact.
Email is at hello@monx.team and we will share a clear breakdown of how these changes apply to your situation.
