Hong Kong Salaries Tax vs Australian Income Tax: 2026/27 Rates and Allowances Side by Side
Hong Kong salaries tax uses progressive rates from 2% to 17% on net chargeable income, with a two-tiered standard rate of 15% and 16% as an alternative method. Australian residents pay no tax on their first A$18,200 and then 15% on income from A$18,201 to A$45,000 in 2026–27, before the 2% Medicare levy. These figures were checked 2026-10-10 against the official GovHK, IRD and ATO pages listed at the end. The two systems also run on different calendars: Hong Kong’s year of assessment runs from 1 April to 31 March, and Australia’s income year runs from 1 July to 30 June.
How does Hong Kong salaries tax work?
GovHK’s salaries tax rate page sets out the progressive scale, which applies to net chargeable income after deductions and allowances. The bands are shown below.
| Net chargeable income band | Rate |
|---|---|
| First HK$50,000 | 2% |
| Next HK$50,000 | 6% |
| Next HK$50,000 | 10% |
| Next HK$50,000 | 14% |
| Remainder | 17% |
On the first HK$200,000, the tax under this scale is HK$16,000. The progressive scale has applied since the 2020/21 year of assessment.
The standard rate is a separate calculation. From 2024/25 it is two-tiered: 15% on the first HK$5,000,000 of net income and 16% on the remainder. For 2020/21 to 2023/24 it was a flat 15%.
You pay whichever is lower: the progressive rates on net chargeable income (after deductions and allowances), or the standard rate on net income (after deductions but before allowances).
GovHK’s page gives the annual income at which a single person approaches the standard rate zone as HK$2,132,500 for 2026/27 (HK$2,022,000 for 2024/25 and 2025/26). For a married person it is HK$3,365,000 for 2026/27.
What allowances apply from 2026/27?
The IRD’s Allowances, Deductions and Tax Rate Table (PAM 61, August 2026) lists the allowances below. The earlier figures are shown where the table gives them.
| Allowance | 2026/27 | Earlier years |
|---|---|---|
| Basic allowance | HK$145,000 | HK$132,000 (2024/25 and 2025/26) |
| Married person’s allowance | HK$290,000 | HK$264,000 |
| Child allowance, each of the 1st to 9th child | HK$140,000 | HK$130,000 |
| Single parent allowance | HK$145,000 | Not stated on the official page checked |
The same table gives basic ceilings of HK$100,000 each for home loan interest and domestic rents deductions.
Which income does Hong Kong tax?
Hong Kong salaries tax is territorial. It applies to income arising in or derived from Hong Kong from an office, employment or pension. The IRD’s guide for people coming to work in Hong Kong (PAM 42) confirms this basis.
Income covered includes salaries, wages, commissions, tips, bonuses, allowances, leave pay, terminal or retirement awards, and non-cash benefits such as employer-provided accommodation and stock-based awards. Employer-provided accommodation is normally valued at 10% of income from that employer, after deducting outgoings and expenses.
Where the job is located is decided by three factors listed on GovHK’s exemption page: where the contract was negotiated, entered into and is enforceable; where the employer resides; and where the remuneration is paid. If all three are outside Hong Kong, the employment is generally regarded as outside Hong Kong, but the IRD may look beyond these factors. The IRD says most people coming to work in Hong Kong have a Hong Kong employment, in which case all earnings are assessable.
A non-Hong Kong employment is taxed on a days-in-days-out basis. The GovHK page describes a 60-day rule for claiming exemption. The conditions are:
- The job is outside Hong Kong, and it is controlled and supervised outside Hong Kong.
- The trips to Hong Kong are “visits”.
- Visits in the year of assessment total no more than 60 days, with the arrival and departure days both counted.
Trips for training, conferences or reporting on work count as rendering services in Hong Kong.
PAM 42 gives two examples relevant to Australians. A person who studied and worked in Australia and is then recruited to the Hong Kong branch of an international firm has a Hong Kong employment and pays tax on full income. A person seconded to work full time in Hong Kong is also taxed on full income, and no relief is given by reason of nationality, residence or citizenship.
Penalties apply for failing to notify chargeability within 4 months after the end of the basis period when no return has been issued, for failing to file, for filing late, or for filing an incorrect return. PAM 42 also states that provisional salaries tax is charged. The method for calculating it is not stated on the official pages checked.
What are the Australian rates for residents?
The ATO’s resident rates page sets out the brackets below. These rates do not include the 2% Medicare levy.
| Taxable income | 2025–26 | 2026–27 |
|---|---|---|
| A$0 – A$18,200 | Nil | Nil |
| A$18,201 – A$45,000 | 16c for each A$1 over A$18,200 | 15c for each A$1 over A$18,200 |
| A$45,001 – A$135,000 | A$4,288 plus 30c for each A$1 over A$45,000 | A$4,020 plus 30c for each A$1 over A$45,000 |
| A$135,001 – A$190,000 | A$31,288 plus 37c for each A$1 over A$135,000 | A$31,020 plus 37c for each A$1 over A$135,000 |
| A$190,001 and over | A$51,638 plus 45c for each A$1 over A$190,000 | A$51,370 plus 45c for each A$1 over A$190,000 |
Whether you are an Australian resident for tax purposes is decided on facts and circumstances under the ATO’s tests. Leaving Australia or holding a Hong Kong visa does not by itself settle the question, and no fixed number of days abroad settles it either.
What are the Australian rates for foreign residents?
The ATO’s foreign resident page applies to an individual who was a foreign resident for tax purposes for the full year. The 2025–26 rates, which are the same as 2024–25, are:
| Taxable income | 2025–26 |
|---|---|
| A$0 – A$135,000 | 30c for each A$1 |
| A$135,001 – A$190,000 | A$40,500 plus 37c for each A$1 over A$135,000 |
| A$190,001 and over | A$60,850 plus 45c for each A$1 over A$190,000 |
There is no tax-free threshold for foreign residents, and foreign residents are not required to pay the Medicare levy. The foreign resident page checked lists years up to 2025–26. A 2026–27 foreign resident table was not shown on that page.
How do the two systems compare on the same income?
This article does not calculate tax totals for a particular salary, and it does not convert between A$ and HK$. The two systems are built differently, so the tables above are not directly comparable line by line. Hong Kong uses bands with allowances and a separate standard rate, while Australia uses brackets with a tax-free threshold for residents and none for foreign residents. The income year and the tax year also differ.
For individual cases, speak to a registered tax agent in Australia or a qualified Hong Kong tax adviser.
Frequently asked questions
Do I pay the progressive rate or the standard rate in Hong Kong?
GovHK’s page says you pay the lower of the two. The progressive rates apply to net chargeable income after deductions and allowances. The standard rate applies to net income after deductions but before allowances.
Does Hong Kong tax me if I studied and worked in Australia first?
PAM 42 Q&A 2 says a person who studied and worked in Australia, and is then recruited to work in the Hong Kong branch of an international firm, has a Hong Kong employment. That person pays tax on full income.
Do foreign residents pay the Medicare levy?
The ATO’s foreign resident page says foreign residents are not required to pay the Medicare levy. Residents pay the 2% levy on top of the resident rates.
Is there a tax-free threshold for foreign residents?
No. The ATO states that there is no tax-free threshold for foreign residents, and the first A$135,000 is taxed at 30c for each A$1.
Who should I ask about my own tax position?
Individual cases need a registered tax agent in Australia or a qualified Hong Kong tax adviser. This article gives general information only.
Sources
- GovHK: Tax Rates of Salaries Tax & Personal Assessment
- IRD: Allowances, Deductions and Tax Rate Table (PAM 61)
- IRD: A guide to Salaries Tax for people coming to work in Hong Kong (PAM 42)
- GovHK: Exemption for employees (salaries tax)
- ATO: Tax rates – foreign residents
- ATO: Tax rates – Australian residents
All sources checked 2026-10-10.