Salaries Tax Allowance

If you’re employed in Hong Kong, you’re likely no stranger to salaries tax. But are you aware of how you can minimize your tax liability legally via salaries tax allowances?

It is important for employees and employers to understand the current salaries tax allowance options in 2025. Whether you are doing your own tax return or running payroll as part of the HR team at your company, it can benefit you to know what allowances are applicable to minimize your taxable income and prevent overpayment.

In this article, we summarize all the tax allowances that you can claim in Hong Kong.

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    What is Salaries Tax Allowance in Hong Kong?

    A salaries tax allowance is a deduction allowed by the Hong Kong Inland Revenue Department (IRD) in order to reduce an individual’s assessable income prior to determining tax liability.

    They are intended to provide for personal situations—such as maintaining dependents or funding elderly care—so that the taxpayer is not unfairly burdened.

    Unlike deductions (which lower taxable income according to actual expenditures), allowances are fixed amounts given under prescribed eligibility conditions.

    Salaries Tax Allowances You Can Claim in 2025

    Here’s a rundown of the major salaries tax allowances offered in 2025, based on the most recent IRD guidelines:

    Basic Allowance

    • 132,000 HK$
    • Automatically given to all individual taxpayers.

    Married Person’s Allowance

    • 264,000 HK$
    • Eligible if you and your spouse are both evaluated together.

    Child Allowance

    • In the birth year HK$ 130,000 for each child
    • HK$ 100,000 per child for each following year
    • Applies to biological, adopted, or stepchildren.

    Dependent Parent/Grandparent Allowance

    • Up to HK$ 100,000 per dependent
    • Applies if you maintain a parent/grandparent aged 55 or above.

    Single Parent Allowance

    • HK$ 132,000
    • Granted to unmarried individuals solely or mainly maintaining a child.

    Personal Disability Allowance

    • Estimately HK$ 75,000
    • Available for certified disabilities.

    Disabled Dependant Allowance

    • HK$ 75,000 per dependent
    • Awarded for each dependant who is disabled.

    Elderly residential care expenses allowance

    • up to HK $ 100,000
    • Applies to payment received for residential care of a dependent grandparents or parents.

    Home loan interest deduction

    • 100,000 HK$ per year (maximum 20 years)
    • If you are paying interest on home loans for your main residence.

    Contribution to recognized retirement schemes (eg.MPF)

    • Maximum HK $ 18,000 annually
    • Compulsory contribution to MPF schemes is deducted.

    How to claim salary tax allowance in Hong Kong

    To claim these allowances, taxpayers must have:

    1. Complete the annual tax return (Form Bir60) accurately
    2. Announce the eligible allowances under the respective classes
    3. Provide assistant documents (eg, receives from birth certificate, MPF records, care facilities)
    4. Follow all the time limit published by IRD, usually between May and July every year

    General errors while claiming salary tax allowance

    • Claiming allowance is not eligible for you
    • Failure to inform changes (e.g., divorce, dependent)
    • Available cuts such as MPF or care expenses ignoring
    • Failed to file assistant documents if required

    Attaching experts like Fastlane HR prevents you from making such expensive mistakes by optimizing your tax profit.

     

    How Employers Can Assist Employees with Salaries Tax Planning

    Employers are also responsible for ensuring correct payroll and tax reporting. Here is how SMEs can assist:

    • Implement HR and payroll systems that track allowances
    •  Issue timely IR56B forms to employees for filing tax
    • Educate staff about their tax rights and responsibilities
    • Collaborate with a reliable tax consultant such as FastLane HR

    Why Select FastLane HR for Payroll & Tax Services

    At FastLane HR, we do more than payroll. We keep your company and employees:

    • Remain adherent to Hong Kong IRD requirements
    • Receive assistance in obtaining claimable salaries tax allowances
    • Get timely filing of IR56B, IR56F, and employer’s returns
    • Save time with automated payroll + tax reporting systems
    • Integrate Xero and other accounting software perfectly

    Whether you are an HR manager, business owner, or employee, our local professionals offer accurate, current advice each tax season.

     

    Conclusion

    Hong Kong salary tax allowance system provides several opportunities to reduce your tax bill – if you know what you can claim. Whether you are an individual staff member or HR executive responsible for payroll, it can be quite a savings to know about your entitlement.

    Allow Fastlane HR to handle compliance so that you can focus on your expansion. Reach our tax and payroll experts today for a comfortable 2025 tax season!