Salaries tax is chargeable on most but not all of the income from employment, offices and pension arising in or derived from Hong Kong. Here you can learn more about the types of income that are chargeable and those that are non-chargeable.

You need to report the following income on your Tax Return – Individuals (B.I.R. 60).

Salaries, Wages and Director's fees

Any salary, wages or director’s fees you earn are chargeable to salaries tax, and the gross amounts before the deduction of your contributions to a recognised occupational retirement scheme or mandatory provident fund scheme should be reported.

• More on Mandatory Provident Fund Scheme or Recognised Occupational Retirement Scheme
  http://www.gov.hk/en/residents/taxes/salaries/allowances/deductions/mpf.htm

Commissions, Bonuses, Leave Pay and End of Contract Gratuities

As a general guide, most forms of income that your employer pays to you are taxable, regardless of when the payments are made (before, during or after a period of employment) and whether the amount was paid according to the terms of employment or in excess of them. Examples of assessable income include commission and rebates, bonuses, leave pay and end of contract gratuities.  Only a few types of payments are exempt. These include, but are not limited to, payments in lieu of notice of termination, compensation for injuries and payments specifically exempted under the Inland Revenue Ordinance.

Allowances, Perquisites and Fringe Benefits

Any income that you have received from your employer as an allowance, perquisite or fringe benefit should be reported on your tax return. These forms of income include cash allowances, liability of employees discharged by employers, convertible benefits, education benefits and holiday journey benefits.

The conditions for assessment of holiday journey benefits have changed since the 2003/2004 year of assessment, and more information is available through the following links.

• Departmental Interpretation and Practice Notes No. 16: Salaries Tax - Taxation of Fringe Benefits (pdf file)
  http://www.ird.gov.hk/eng/pdf/e_dipn16.pdf
• More on the assessment of holiday journey benefits
  http://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/holiday.htm
• Departmental Interpretation and Practice Notes No. 41: Salaries Tax - Taxation of Holiday Journey Benefits (pdf file)
  http://www.ird.gov.hk/eng/pdf/e_dipn41.pdf

Tips from Any Person

If you have received tips from any person because of your employment you should report them on your tax return. Examples of tips include those paid by customers to waiters in restaurants and those paid by customers to tour guides.

Salaries Tax Paid by Your Employer

The amount, if any, paid by your employer to cover your tax obligations should be reported as assessable income.

Value of a Place of Residence

If your employer provides you with a place of residence, you must report it. The rental value of the residence will normally be calculated at 10% of your income from the employer after the deduction of outgoings and expenses. More information is available through the following link.

• More on the value of a place of residence provided by an employer
  http://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/residence.htm

Stock Awards and Share Options

You should report all stock awards granted to you and the gains realised by the exercise of, or  assignment or release of share options obtained from holding an office or employment . More information on what you are required to report is available through the following links.

• More on reporting stock awards and share options
  http://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/options.htm
• Departmental Interpretation and Practice Notes No. 38: Employee Share Option Benefits (pdf file)
  http://www.ird.gov.hk/eng/pdf/e_dipn38.pdf

Back Pay, Gratuities, Deferred Pay and Pay in Arrears

Any income that you have received from your employer as back pay, gratuities, deferred pay and arrears of pay during the course of employment or upon or after cessation of employment are assessable and should be reported on your tax return.

• More on how back pay, gratuities, deferred pay and pay in arrears are assessed
  http://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/backpay.htm

Termination Payments and Retirement Benefits

Termination payments (e.g. salary for the last month of service, payment in lieu of leave and certain payments in lieu of notice) as well as retirement benefits, including accrued benefits received from recognised occupational retirement schemes or receipt or deemed receipt from mandatory provident fund schemes, should be reported. More information on termination payments is available through the following links.

• More on termination payments
  http://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/termination.htm
• More on mandatory provident fund schemes and provident funds
  http://www.gov.hk/en/residents/taxes/salaries/allowances/deductions/mpf.htm
• Departmental Interpretation and Practice Notes No. 23: Recognised Retirement Schemes (pdf file)
  http://www.ird.gov.hk/eng/pdf/e_dipn23.pdf

Pensions

All pensions should be reported as assessable income.

More Information

• More on a guide to salaries tax (2) – which income is assessable and which dedutions are allowable (pdf file)
  http://www.ird.gov.hk/eng/pdf/pam40e.pdf
• More on related tax rules – salaries tax (pdf file)
  http://www.ird.gov.hk/eng/pdf/bir60_st_e.pdf

You are not required to report the following income on your tax return.

Payments in Lieu of Notice

Any payment that your employer provides in lieu of the period of notice specified under the Employment Ordinance need not be reported on your tax return. However, if you work through the notice period, the income you received during that period will be assessable.

Severance Payments and Long Service Payments

Severance payments and long service payments that are required to be paid under the Employment Ordinance are not assessable to salaries tax. Gratuities or provident fund benefits set off against severance payments or long service payments under the Employment Ordinance are treated as severance payments or long service payments and thus not assessable to salaries tax.  However, any amount in excess of an employee’s entitlement under the Employment Ordinance is assessable to salaries tax and should be reported by you and your employer in your and the employer’s returns. 

• More on severance payments and long service payments
  http://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/termination.htm

Jury Fees

You need not report any fees that you receive from sitting on a jury in a Hong Kong court of law.