2. What are the current rates for salaries tax?
Tax rates for the year of assessment 2018/19 and onwards (also applicable to Personal Assessment):
| Net chargeable income (Total Income – Deductions – Allowances) | Progressive 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% |
| upon the remainder | 17% |
Net total income (Total Income – Deductions) < Standard rate: 15% or 16% (For the year of assessment 2024/25 onwards, a two-tired standard tax rates regime will be implemented, under which the first $5 million of the net income will continue to be subject to the standard rate of 15% while the portion of the net income exceeding $5 million will be subject to the standard rate of 16%)
Salaries Tax is chargeable on your net chargeable income at progressive rate or your net total income at standard rate, whichever is the lesser. It may be further reduced by tax reduction, subject to a ceiling each year. Based on the above table, progressive rate is more advantageous to people with relatively lower income. On the other hand, the standard rate will give more concession to people earning relatively higher income (since progressive rate will charge 17%, but not 15% or 16% (under the two-tiered standard tax rates), on the income after the first $200,000).
Please go to the next question for an illustration of how to compute Salaries Tax.
For more details on tax rates, you may also refer to the Inland Revenue Department's “Allowances, Deductions and Tax Rate Table”.
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