Hong Kong's salaries tax for 2026/27, as legislated on 2 October 2026, takes HK$790 more than the 2025/26 final bill from a single person earning between about HK$363,000 and HK$2.04 million a year, even though the basic allowance rose from HK$132,000 to HK$145,000. The difference is the one-off HK$3,000 reduction, which applies to 2025/26 and has not been legislated for 2026/27.
A single person with only the mandatory MPF deduction pays no 2026/27 salaries tax until income after that 5% contribution passes the HK$145,000 allowance, at about HK$152,600 a year. For anyone's own case, the Inland Revenue Department's online tax computation is the authority.
The provisional part of the bill drops the cut
The 2026-27 Budget reduced salaries tax for 2025/26 by 100%, up to HK$3,000, and the IRD's page on the Budget's tax measures says that reduction "will only be applicable to the final tax for the year of assessment 2025/26, but not to the provisional tax of the same year". The notice that settles 2025/26 also charges provisional tax for 2026/27, worked out on the 2025/26 income with the new allowances. The IRD's own worked example for a single person on HK$380,000 shows tax of HK$24,160 for 2025/26, cut to HK$21,160 by the reduction, and provisional tax for 2026/27 of HK$21,950.
We wrote our own version of the rules from the IRD's tables and checked it against the rate and reduction functions in the IRD's online computation pages, copied and run on our own machine: about 2.5 million incomes, across 11 household types and three years, agreed to the dollar. On those rules, a single person earning HK$40,000 a month, with only the mandatory MPF deduction and nothing else, is charged HK$35,100 for 2025/26 after the reduction and HK$35,890 in provisional tax for 2026/27. Those are the tax charged for each year, not the amount on the notice, which nets off provisional tax already paid.
The basic allowance climbs by HK$13,000
From 2026/27 the basic and single parent allowances rose from HK$132,000 to HK$145,000, the married person's allowance from HK$264,000 to HK$290,000, the child allowance from HK$130,000 to HK$140,000, and the allowance for a dependent parent or grandparent aged 60 or over from HK$50,000 to HK$55,000. The legislation was passed on 13 May 2026 and gazetted on 22 May, the IRD says.
For a single person the rise is worth at most HK$2,210, 17% of HK$13,000, which is less than the HK$3,000 reduction it replaces. The married person's allowance has a condition: in the words of GovHK's allowances page, the spouse "did not have any income chargeable to salaries tax in the year and has not elected for personal assessment separately", or the couple elected joint assessment. Who qualifies is for the IRD to decide.
The allowance for a newborn doubles
From 2026/27, the double child allowance for a newborn (HK$280,000) can be claimed for the first two years after birth, an extension from the previous one-year rule. The IRD says this covers all children born on or after 1 April 2025.
The 2026 Policy Address on 16 September proposed going further, raising the child allowance and the newborn allowance from HK$140,000 to HK$160,000 for a second or later child born on or after that date, from 2026/27. The IRD says it will be implemented after the legislative process is complete; on 2 October 2026 it was not law, and the figures here do not include it.
The single parent's bill on our calculator dropped to the IRD's figure
Until 2 October 2026, our Hong Kong salaries tax calculator had no single parent allowance: for the IRD's own example of a divorced parent with one child, it gave HK$9,700 where the IRD gives HK$200. It also said the HK$3,000 reduction applied to 2026/27, and rounded to the nearest dollar where the IRD rounds down. The calculator now includes the single parent allowance and the nine-child limit, uses the IRD's practice of rounding down to the dollar, and lets users choose the tax year from 2024/25 to 2026/27, applying the correct allowances and reductions for each. With these changes, it now reproduces the IRD's own worked examples.
The standard-rate threshold climbs with the allowances
Salaries tax is the lower of two calculations: progressive rates on income after deductions and allowances, or the standard rate on income after deductions but before allowances. GovHK's rates page publishes the income at which the standard rate starts to apply. For 2026/27, counted after deductions such as MPF, it is HK$2,132,500 for a single person, HK$3,365,000 for a married couple on one income, and HK$6,490,000 for a couple with two children. For a single employee taking the full HK$18,000 MPF deduction, the first of those is a salary of HK$2,150,500.
Because the bands are the same for everyone, the threshold depends only on the total of a household's allowances. The 16% tier introduced from 2024/25 raised it for any household whose allowances total more than about HK$482,000. For a couple with two children it moved from HK$5,745,000 under a flat 15% to HK$6,490,000; for a couple living with two parents aged 60 or over, from HK$5,235,000 to HK$5,470,000.
The reduction cap shrank, then partly recovered
Recent Budgets have each granted a 100% tax reduction for the prior year, up to a specified cap. In the six years GovHK tabulates, the cap was HK$10,000 for 2020/21 and 2021/22, HK$6,000 for 2022/23, HK$3,000 for 2023/24, HK$1,500 for 2024/25 and HK$3,000 for 2025/26. For a married couple assessed jointly, the cap applies to the couple. None had been legislated for 2026/27 on 2 October 2026; a reduction for that year would be a matter for the next Budget.
The effective rate creeps toward 16%
The 2024-25 Budget introduced two tiers for the standard rate from 2024/25: 15% on the first HK$5 million of net income and 16% on the rest. It expected about 12,000 taxpayers to be affected, 0.6% of the total. For someone assessed at the standard rate, the second tier adds exactly 1% of net income above HK$5 million. On HK$10 million of net income, after deductions and before allowances, the tax is HK$1,550,000, 15.5%; on HK$20 million it is 15.75%, and on HK$50 million 15.9%. The rate rises with every extra dollar and never reaches 16%.
