Personal Tax in Hong Kong
Cost of Living for Locals in Hong Kong?
Affordable Dining:
- Street Food and Local Eateries: Locals often dine at street food stalls and local eateries, where a meal can cost as little as HKD 50. Popular spots include dai pai dongs (open-air food stalls) and cha chaan tengs (local cafes) offering affordable and delicious meals.
- Wet Markets: Locals buy fresh produce and groceries from wet markets, which are generally cheaper than supermarkets.
Housing and Utilities:
- Public Housing: Many locals live in public housing or older buildings, which are more affordable than newer developments.
- Utilities: Monthly utility costs for a small apartment can be around HKD 1,759.
Transportation:
Public Transport: The Mass Transit Railway (MTR) and buses are affordable and efficient, with a one-way ticket costing around HKD 12.
Cost of Living for Foreigners in Hong Kong
Dining Out:
- Mid-range Restaurants: Foreigners might prefer dining in mid-range restaurants, where a three-course meal for two can cost around HKD 480.
- Western Chains: Many foreigners opt for familiar Western chains, where a meal can be more expensive compared to local options.
Housing and Utilities:
- Expensive Areas: Foreigners often rent apartments in central or expat-friendly areas, where rent for a 900 sqft furnished apartment can be around HKD 51,510 per month.
- Utilities: Monthly utility costs for a larger apartment can be higher, around HKD 1,759.
Transportation:
- Taxis: Foreigners might rely more on taxis, which are more expensive than public transport. A taxi ride starts at HKD 29.
Language Barrier Considerations
Central Areas:
- English-Friendly: In central areas like Central, Wan Chai, and Tsim Sha Tsui, English is widely spoken, making it easier for foreigners to navigate and dine out.
Local Neighborhoods:
- Language Challenges: In more local neighborhoods, the language barrier might be a concern, but many locals are friendly and willing to help.
For further information and insights on the cost of living in Hong Kong, visit Boom HK.
Personal Tax System in Hong Kong
Hong Kong’s personal tax system is known for its simplicity and efficiency. Here’s a comprehensive overview:
Available Allowances
Hong Kong provides several allowances to reduce your taxable income:
- Basic Allowance: HKD 132,000 for single individuals.
- Married Person’s Allowance: HKD 264,000 for married couples.
- Child Allowance: HKD 120,000 per child.
- Dependent Parent/Grandparent Allowance: HKD 50,000 to HKD 100,000 depending on the age and living situation.
- Other Allowances: Include allowances for dependent siblings, single parents, and disabled dependents.
Requirement to File a Tax Return and Due Date
- Filing Requirement: Individuals who receive a tax return (BIR60) from the Inland Revenue Department (IRD) must complete and submit it, even if they have no income to report.
- Due Date: Tax returns are typically issued on the first working day of May each year. The filing deadline is usually one month from the date of issue, with an automatic one-month extension for electronic filing.
Tax Rates
Hong Kong uses a progressive tax rate system for salaries tax:
- 2%on the first HKD 50,000 of net chargeable income.
- 6%on the next HKD 50,000.
- 10%on the next HKD 50,000.
- 14%on the next HKD 50,000.
- 17%on any income above HKD 200,000
Alternatively, a standard rate of 15% applies to net income after deductions but before allowances.
Average Level of Taxation
The average level of taxation in Hong Kong is relatively low compared to many other jurisdictions, thanks to the progressive tax rates and various allowances. This makes Hong Kong an attractive location for both individuals and businesses.
Social Security Contributions
- Mandatory Provident Fund (MPF): Both employers and employees must contribute 5% of the employee’s relevant income to the MPF, capped at HKD 1,500 per month.
- Exemptions: Certain employees, such as those under 18 or over 65, and domestic workers, are exempt from MPF contributions.
Tax Payment Dates
- Tax Payment: Tax is usually payable in two installments. The first installment is due in January, and the second installment is due in April of the year following the assessment year.
Conclusion
Hong Kong’s personal tax system is designed to be straightforward and efficient, with various allowances and a low average tax rate. For more detailed information and assistance with your personal tax matters, visit TheBoomHK.