Hong Kong income tax
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Hong Kong income tax
I've had a look around on the IRD website but quickly got bogged down. Can anyone tell me roughly how much income tax would be payable on a monthly salary of HKD69,000?
Also, am I right in thinking that it isn't deducted at source like in the UK but payable in a lump sum by the individual annually?
Many thanks,
Mungo.
Also, am I right in thinking that it isn't deducted at source like in the UK but payable in a lump sum by the individual annually?
Many thanks,
Mungo.
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15% is about right for that wage 
Put it aside each month. Plan on 30% per month for the first year as you have to pay in advance so the 1st or 2nd tax return will be a biggy.
Put it aside each month. Plan on 30% per month for the first year as you have to pay in advance so the 1st or 2nd tax return will be a biggy.
Last edited by bugsquash1; 16th Jun 2012 at 05:06.
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Thanks Master Caution, that helps, and as bug squash said, about 15% seems to be the figure.
Not sure I understand why you would have to plan on 30% for the first year? If you pay one year up front then you have a year to save for the 2nd tax year no? In which case after the initial 1st lump payment you have to put aside 15% a month?
Is housing allowance taxable too?
Not sure I understand why you would have to plan on 30% for the first year? If you pay one year up front then you have a year to save for the 2nd tax year no? In which case after the initial 1st lump payment you have to put aside 15% a month?
Is housing allowance taxable too?
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Yes, housing is taxable, but you have to pay the tax from your salary, so that alone means 30% of salary must be saved to cover the 15% on both salary and housing, assuming your housing is similar to your salary, but more % if it is higher than your salary.
Yes, you have to pay last year's and next year's tax the first time you pay, so you have to have approximately double the cash on hand. All the banks offer cheap loans if you're short on cash, but that just means it will cost you more, and you still have to pay double (though divided into 2 payments that are 3 months apart or so).
Yes, you have to pay last year's and next year's tax the first time you pay, so you have to have approximately double the cash on hand. All the banks offer cheap loans if you're short on cash, but that just means it will cost you more, and you still have to pay double (though divided into 2 payments that are 3 months apart or so).
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Thaks skillet, unfortunately the offer I'm looking at only pays housing of HKD 20,000 a month so a lot less than the salary, but still way better than where I'd be coming from!
I'm trying to get a feel for how much I'll actually have available to spend after tax. So its roughly 15% tax on salary and housing, but I need to be able to pay 2 years worth of tax after 12 months employment?
Sounds like an odd way of doing it, but presumably everyone manages because I've never heard it mentioned as a big problem before.
What's 'Adam Nams' point anyone?
I'm trying to get a feel for how much I'll actually have available to spend after tax. So its roughly 15% tax on salary and housing, but I need to be able to pay 2 years worth of tax after 12 months employment?
Sounds like an odd way of doing it, but presumably everyone manages because I've never heard it mentioned as a big problem before.
What's 'Adam Nams' point anyone?
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Ref your query about Adam nams point:
If you have seen plenty of threads like these where people ask a quite reasonable question, you will also have seen that the individuals get flamed by assorted custodians of our COS, who are often offenders themselves having voluntarily joined on what are colloquially known as B, C & F scales etc, and they'll ask you "why join on such a low salary or poor COS? What are you thinking man?!"
However, you may not even be joining an airline, but having asked a civil question, the replies you received were unusually helpful, but it's early days and Wanchai closes in a few hours.
The provisional tax you will pay when you get your first assessment is based on yr first period of earnings, which is why for a new hk taxpayer it can seem like double tax at the end of the first year.
So who are you going to be working for?
If you have seen plenty of threads like these where people ask a quite reasonable question, you will also have seen that the individuals get flamed by assorted custodians of our COS, who are often offenders themselves having voluntarily joined on what are colloquially known as B, C & F scales etc, and they'll ask you "why join on such a low salary or poor COS? What are you thinking man?!"
However, you may not even be joining an airline, but having asked a civil question, the replies you received were unusually helpful, but it's early days and Wanchai closes in a few hours.
The provisional tax you will pay when you get your first assessment is based on yr first period of earnings, which is why for a new hk taxpayer it can seem like double tax at the end of the first year.
So who are you going to be working for?
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If it's KA, then the 20K is termed a "special allowance" - or something like it and not a housing allowance. The difference being that if it was actually a housing allowance, the money paid to your land lord is tax deductable. Any other allowances, including education aren't.
Tax on the 20K is payable.
Tax on the 20K is payable.
Hi Mungo Man,
Yes, I was just making myself comfortable for the usual entertainment.
However, it seems that for a change there have been some very helpful replies.
Bear in mind that when you start paying the tax also depends on when you come to HK. For example - I arrived in July and did not get my first demand until July the following year. So with the first payment due on Jan the year after that I had a good 18 months to save up. Agree with other contributors that 15% is usually enough. Although you may find that for the first few months you will use up any spare cash 'setting up'.
to all contributors and best of luck to you at KA.
Adam
Yes, I was just making myself comfortable for the usual entertainment.
However, it seems that for a change there have been some very helpful replies.
Bear in mind that when you start paying the tax also depends on when you come to HK. For example - I arrived in July and did not get my first demand until July the following year. So with the first payment due on Jan the year after that I had a good 18 months to save up. Agree with other contributors that 15% is usually enough. Although you may find that for the first few months you will use up any spare cash 'setting up'.
to all contributors and best of luck to you at KA.Adam
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Personally I'd recommend putting a little more than 15% away each year.... you will probably get hit with provisional tax (i.e. double tax)year on year in addition to the 15%, and while the previous year's provisional offsets the next to some degree, I've found a more realistic round figure of about 20% of total taxable earnings is a bit more on the money, as you always seem to earn a little more each year.
If you earn bonuses, profit share, etc, that will probably be billed as well. Tax on housing only seems to apply to pilots, thanks to a delightful deal CX did with the IRD a few years back... most other expats don't have it assessed as taxable income from what I've heard of other expat contracts. As always, check the details with your employer first, as things do seem to vary considerably between companies.
Honk.
If you earn bonuses, profit share, etc, that will probably be billed as well. Tax on housing only seems to apply to pilots, thanks to a delightful deal CX did with the IRD a few years back... most other expats don't have it assessed as taxable income from what I've heard of other expat contracts. As always, check the details with your employer first, as things do seem to vary considerably between companies.
Honk.
a monthly salary of HKD69,000
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Thanks Adam, in fact everyone for a useful and sensible thread!
etrang - yes its pretty good, far far better than where I'd be coming from hence the appeal despite the living costs. Current tax for me is 30% of a far smaller salary!
etrang - yes its pretty good, far far better than where I'd be coming from hence the appeal despite the living costs. Current tax for me is 30% of a far smaller salary!
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Is the rent where you live 4-5000 euros a month
for a **** box?
Is a pint of beer 8/9 euro ?
School fees 30,000 euro?
What you need to look at is how much you'll
have left. On FULL b scale it took me till 3
years to start making money .
They can pay you a million, if it costs you
million +1 , then it doesn't work does it.
They are relying on the fact you think it's a
lot of $$
If you're young, single, no kids, no want of
decent health cover, then you can make it work.
for a **** box?
Is a pint of beer 8/9 euro ?
School fees 30,000 euro?
What you need to look at is how much you'll
have left. On FULL b scale it took me till 3
years to start making money .
They can pay you a million, if it costs you
million +1 , then it doesn't work does it.
They are relying on the fact you think it's a
lot of $$
If you're young, single, no kids, no want of
decent health cover, then you can make it work.
Last edited by AAIGUY; 18th Jun 2012 at 09:49.
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AAIGUY, I didn't want this thread to degenerate but I can't resist replying.
Rent: 4-5000 Euros is HKD39000 to HKD49000. Well I don't know where you live but a little flat on Lantau is easily achievable with the HKD20000 allowance they provide.
Pint of beer 8Euros? I don't drink and its not that much more than London anyway.
School fees? No kids!
I know Hong Kong is expensive but I don't feast on caviar and champagne. How can HKG89,000 a month be insufficient? Please tell me as I'd rather find out now than when I'm committed.
Rent: 4-5000 Euros is HKD39000 to HKD49000. Well I don't know where you live but a little flat on Lantau is easily achievable with the HKD20000 allowance they provide.
Pint of beer 8Euros? I don't drink and its not that much more than London anyway.
School fees? No kids!
I know Hong Kong is expensive but I don't feast on caviar and champagne. How can HKG89,000 a month be insufficient? Please tell me as I'd rather find out now than when I'm committed.
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No need for this thread to deteriorate. It can remain civil whilst still giving you the correct information.
My last rent was 65,000. It was about 1200 sq feet. The largest we could get, but my wife and son still left do to pollution, over crowding ect.. I now commute.
My last mortgage was 69,000 I believe.
You're right. 20,000HK will get you a 500 sq ft (80% efficiency so really 400 sq ft) place in Tung Chung.
I don't know your situation, I frankly don't care. If you think you can do it, then good luck. Have at er'
See you in the crew room... (actually I likely resign by the time you turn up.
Fair warning.
As for drinking, a few days in China will sort you. You'll be a full on alcoholic like the rest of us.
My last rent was 65,000. It was about 1200 sq feet. The largest we could get, but my wife and son still left do to pollution, over crowding ect.. I now commute.
My last mortgage was 69,000 I believe.
You're right. 20,000HK will get you a 500 sq ft (80% efficiency so really 400 sq ft) place in Tung Chung.
I don't know your situation, I frankly don't care. If you think you can do it, then good luck. Have at er'
See you in the crew room... (actually I likely resign by the time you turn up.
Fair warning.
As for drinking, a few days in China will sort you. You'll be a full on alcoholic like the rest of us.
Last edited by AAIGUY; 18th Jun 2012 at 11:10.
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I think it is sufficient. A lot of people work here for a lot less - they live with their parents/roommates/friends, have no privacy, no social life and no savings for the future, living the rat race lifestyle all the time, doing nowhere.
The main thing is that your compatriots, most of your coworkers, all your FOs and CNs, and other expats make 2-3-4 times what you will make (including expat housing money) and have a flat, lifestyle and freedom you will never afford. If that still doesn't bother you, it will eventually. A lot.
If it's still a good/the best option for you, specially with no wife/kids/cars/toys to worry about, and you don't mind paying someone else's mortgage in Tung Chung (which is fine but very isolated from the CBD and does not offer a HK lifestyle), go for it. Good luck.
The main thing is that your compatriots, most of your coworkers, all your FOs and CNs, and other expats make 2-3-4 times what you will make (including expat housing money) and have a flat, lifestyle and freedom you will never afford. If that still doesn't bother you, it will eventually. A lot.
If it's still a good/the best option for you, specially with no wife/kids/cars/toys to worry about, and you don't mind paying someone else's mortgage in Tung Chung (which is fine but very isolated from the CBD and does not offer a HK lifestyle), go for it. Good luck.
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a little break down of your 89,000
89,000
-26.700 (tax set aside)
-24,000 (the mythical rent you plan on paying.
- 8,000 (cheap food for a single guy- not eating out)
- 2,500 (A/C, water, natural gas - some months my AC alone was more than this)
- 1,200 (Internet/cable)
- 1,500 (bus's and trains.. no taxis )
- 1000 MPF
Thats 62,500K and you've not left your flat. You've only bought food, sat at home, and gone to work. Haven't even paid to use the gym in Tung Chung.
No kids, no wife, no DEBT in the UK.. you may have some money left to do stuff, but my point is you may have 16-800 GBP's left. No travel home yet, no vacations. No picking up a chick taking her to a movie.
If you're in the UK, and get a job that gives you even 900 left over, you get a PENSION, HEALTHCARE, and some sort of rights as a worker. You don't have that here.
I write the above with no malice , or intention to fight. It is what it is.
The money maker here for me is(was) the CNY bonus, Travel Allowance and Gratutity. It is almost 4 months pay for me. We do stuff, and save with that.
89,000
-26.700 (tax set aside)
-24,000 (the mythical rent you plan on paying.
- 8,000 (cheap food for a single guy- not eating out)
- 2,500 (A/C, water, natural gas - some months my AC alone was more than this)
- 1,200 (Internet/cable)
- 1,500 (bus's and trains.. no taxis )
- 1000 MPF
Thats 62,500K and you've not left your flat. You've only bought food, sat at home, and gone to work. Haven't even paid to use the gym in Tung Chung.
No kids, no wife, no DEBT in the UK.. you may have some money left to do stuff, but my point is you may have 16-800 GBP's left. No travel home yet, no vacations. No picking up a chick taking her to a movie.
If you're in the UK, and get a job that gives you even 900 left over, you get a PENSION, HEALTHCARE, and some sort of rights as a worker. You don't have that here.
I write the above with no malice , or intention to fight. It is what it is.
The money maker here for me is(was) the CNY bonus, Travel Allowance and Gratutity. It is almost 4 months pay for me. We do stuff, and save with that.
Last edited by AAIGUY; 18th Jun 2012 at 11:22.