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.

Try this:

GovHK: Tax Computation of Salaries Tax and Personal Assessment

15% is about right for that wage :ok:

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.

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?

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).

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?

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?:}

KA of course! Thanks for the explanation, I shan't rise to the bait.

PS. What does COS actually stand for?

Conditions Of Service.

An important document that is regularly ignored by Hong Kong employers!

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.

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'.

:D to all contributors and best of luck to you at KA.

Adam

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.

That's more than US$8,800 or Euro7,000, and tax is only 16% or so. Then there's housing allowance, sector pay, etc, etc. Sounds pretty good.

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!

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.

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.

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.

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.

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.

AAIGUY, thanks very much for your input, I mean that. I'm trying to get a feel for how well off/poor I'd be if I accepted a position in KA and all you guys replying are the ones living out there so I want to hear what you've got to say.

Your last rent at 65000 must have been a hell of a place or in the city centre? I've seen tons of adverts for small flats on Lantau for sub 25000 a month. Or is there some big hidden catch?

Even though I find your estimates hard to believe (£100 a month for internet), lets assume they are accurate. So you're saying when I leave the flat I'll have HKD26500 to spend. That's about £2100. Ok, the whole setup might make an A scaler laugh, but £2,100 isn't much less than I earn right now after tax, and I certainly can't save even £900 a month. But I guess a lot depends of where you come from and what your outlook on life is.

Again, I don't necessarily think I can do it, I want to find out if I can do it.

My place was in Tung Chung.. If you want a awesome pad in the city its 80K+.
My dragon boat buddies who working in finance/law all pay over a 100K for what you'd consider in UK as a normal home.

The amount for 1200 HKD was cable (TV) and internet.

Good luck.

If you do try it, I recommend you flat share with a mate on a 30-40K thing in DB and have some sort of social life. Getting rent down to 20, and splitting utilities and internet/cable will make it more manageable.

Actually you can get 1,200 feet or more in Tung Chung for HK$20,000.

Buy Property in Hong Kong | Hong Kong Homes for Sales and Rent | GoHome

Mungo Man, it's tight but you'll survive.
The CX guys are out of touch with reality having been cosseted for decades.
The real world is now arriving on their doorstep.
If they want to retain their privileged salary and terms they'll have to fight. But I see no stomach for it. Watch the Basing issue unfold. The Big Ben Dover is underway.

If you need a job, or a change - suck it up. Better than wallowing on the dole in euro land.

Mine was an actual 1200 sq.. 1800 listed.. 70% efficiency.. high floor, newer..

What Algol said :E

Come enjoy and leave if its all too hard. :ok:

That whole thing about having to pay tax twice for the first tax bill...yea thats not accurate. You are required to pay tax once a year on any income that is taxable from the previous year. You are not required to pay tax for the following year as you do not know how much you have earned. Hk tax is much like any other country. The rate is around 15%.

It would be absurd for them to tax you on income that you haven't already earned. If you join in July, you will have to pay around 6months of tax. Thats it!

Er, actually it is accurate. It's called Provisional Tax and is calculated on your expected earnings for the next 12 months. Your first tax bill will include tax on the previous 12 months' earnings plus the Provisional Tax on your expected earnings for the next 12 months.

In subsequent years you will be assessed on the previous 12 months' earnings, and the Provisional Tax you have already paid will be credited against that amount. You will then have to pay the difference plus the Provisional Tax on the expected earnings for the next 12 months, and so on.

Confused??

Karam
As my dear old dad said to me, "if you don't know what you're talking about, never miss an opportunity to keep your mouth shut"
In plain terms, and very well explained may I add, buzzbox is completely correct, whereas you appear to be smoking something that shouldn't be within 50feet of a keyboard.
The guy wants info on tax, not some hallucinatory imaginations from someone who's head appears well inserted in a dark place.
Get a grip man!

Rents in Hong Kong
 

Etrang, nice link to the Tung Chung property. Note, for $19000 its unfurnished, so Mungo, that's what you can expect for unfurnished, and you can bet there'll be a premium of about $5000 for a furniture fitted place. So your special allowance will all but disappear whilst the market prices remain so high. You'll blow a bit setting up if you want to be comfortable - so that's a factor to consider here.

Property prices are at all time high now, so that is also something to consider, if and when there's a correction then you maybe able to get into the market, but the correction will need to be about 30%+, so it ain't easy, with no kids, its doable, if wifey or gf has quails then you will be ok and they get a job - ok. If you're on your pat malone its a struggle, but you might round up a nice catch when you're here.

Moving slightly off topic now, as I delve further into the Kong Kong job I'm looking into, I have been made aware of a potential snag regarding UK income tax.

If I get the job, I was hoping to visit the UK a fair bit during my leave but someone told me the UK Tax Residency rules might change and I may find myself liable to pay UK income tax on my Hong Kong income if I spend as 6 weeks in the UK each year. Can anyone shed any light on this potental change? At the moment I could spend up to 90 days in the UK and not pay UK income tax but the propsed changes could be much more restrictive.

Mungo man,

Ignore them. Just ignore them. Algol has it spot on, the CX guys of old had it good, I mean really really good but reality has set in. No matter how many times you say you can live simply, you don't drink, you don't eat steak, some blinkered sour-puss will always come here telling you about 500HKD steaks or 70HKD beers in LKF.

Tell them about 40pc tax in the UK or 44pc tax in Australia compared to 15pc in HK and they will still make it out that you won't have a pot to p!ss in. You are on a good deal mate. :ok:

And while you're at it betpump, you could mention that 44% is the top tax rate in Australia, that there are good public schools and medicare, and that above all else the air won't put your loved ones into constant medical care or worse a wooden box.
But hey, never let the truth get in the way of a good dose of BS.

"your on a good deal mate"..... Holy cow. I am not an "old timer", still young. Tell yourself whatever you need to sleep tonight, but please don't sucker other guys into your fantasy.

If you care about your mates, tell them the TRUTH.

OK, so you never have a 500HKD steak. Great life.

Noodles tonight boys....great deal.

Especially when I am 35 and grow up, and actually want a family.

This package is destined to fail those who have put their future financial hopes in it.

Sad. Go ahead and throw the sambos in your flight case, we get it. :(

I should just straighten this thread out a bit:

Things may have changed but with Dragonair the arrangement with the tax office was that you would pay an extra 10% on the 15% tax you pay on your salary for the housing allowance. That works out as an annual tax amount of 16.5% of your gross salary (10% of 15% = 1.5%). It didn't matter how much you actually received as housing allowance. Things may have changed though ...

Correct, although new joiners get a fully taxable allowance, not under the rental system...... Great deal.