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Housing allowance and salary

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  1. #11

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    I see... Well I will raise this tomorrow and find out why they're doing it this way. Although I suppose it needs to be paid either way, saves me putting aside for the end of year.

    thanks for advice by the way. I guess the only thing I'll do is wait to see what Citibank come back with...

    Last edited by willcol1; 05-03-2015 at 11:07 PM.

  2. #12

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    Quote Originally Posted by jmbf:
    It is strange. Here you usually get your full salary (minus MPF) per month and then it's up to you to save for and then settle your tax bill annually yourself.
    just FYI... The reason from my employer is and I quote:

    "Yes this is the general practice for all HK employees. However, the downside is they will have to pay out a lump sum of income taxes when they come due. We have stretched it out over 12 months, which actually minimizes the financial pressure for you"

  3. #13

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    Housing allowance and salary

    Quote Originally Posted by willcol1:
    just FYI... The reason from my employer is and I quote:

    "Yes this is the general practice for all HK employees. However, the downside is they will have to pay out a lump sum of income taxes when they come due. We have stretched it out over 12 months, which actually minimizes the financial pressure for you"
    I'm not sure of the legal implications of this, I'll let someone else chip in. All things being equal, It's not a large sum of money so I guess it's up to you what arrangement you want to use. Personally I'd want to be in full control of my own money (for better or worse).
    Last edited by jmbf; 06-03-2015 at 09:38 AM.

  4. #14

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    Your employer is not permitted to deduct from your salary in this manner.

    The only deductions that can be made are listed here:

    http://www.labour.gov.hk/eng/public/...seGuide/03.pdf

    Scroll to the section 'Deductions from Wages'


  5. #15

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    Quote Originally Posted by willcol1:
    I see... Well I will raise this tomorrow and find out why they're doing it this way. Although I suppose it needs to be paid either way, saves me putting aside for the end of year.

    thanks for advice by the way. I guess the only thing I'll do is wait to see what Citibank come back with...
    If you are worried about putting it aside until the end of the year you can purchase the tax reserve certificates each month which is what i do.
    HK_Katherine likes this.

  6. #16

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    Quote Originally Posted by willcol1:
    just FYI... The reason from my employer is and I quote:

    "Yes this is the general practice for all HK employees. However, the downside is they will have to pay out a lump sum of income taxes when they come due. We have stretched it out over 12 months, which actually minimizes the financial pressure for you"
    Nearly 30 years in Hong Kong, and several employers, I've not seen it before. Don't know anyone else who has had this 'deduction'.

    An employer who deducts 'tax'. An employer who doesn't give payslips. What else does this employer do outside the norm?
    Fiona in HKG and HK_Katherine like this.

  7. #17

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    Original Post Deleted
    To be honest I do find this system rather strange but I do trust my employer and that won't get screwed over. I think they're just trying to help in their own way. I quote again:

    "Don’t worry, as these withheld taxes will all contribute to your final income tax payments. Every April, we file our tax returns, and we receive our final tax bills around Sept. We will reconcile with these withheld taxes with your final tax bill. Any amount above the withheld taxes, you will pay to the HK government; any amount below, we will refund it back to you"

  8. #18

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    Quote Originally Posted by Claire ex-ax:
    Nearly 30 years in Hong Kong, and several employers, I've not seen it before. Don't know anyone else who has had this 'deduction'.

    An employer who deducts 'tax'. An employer who doesn't give payslips. What else does this employer do outside the norm?
    Re the payslips I get a monthly printed summary of my salary breakdown - which I suppose constitutes as their version of a payslip. It details their deductions towards my annual tax and net figure after that. Like I said - it's not like they're withholding a significant amount so it doesn't concern/affect me too much..

    But the payslip is like nothing I have received previously, although that was in UK and this is my first HK employer so I wouldn't know otherwise.

    The accounts dept here are very good and efficient which is why I haven't questioned any of this.

  9. #19

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    Quote Originally Posted by willcol1:
    To be honest I do find this system rather strange but I do trust my employer and that won't get screwed over. I think they're just trying to help in their own way. I quote again:

    "Don’t worry, as these withheld taxes will all contribute to your final income tax payments. Every April, we file our tax returns, and we receive our final tax bills around Sept. We will reconcile with these withheld taxes with your final tax bill. Any amount above the withheld taxes, you will pay to the HK government; any amount below, we will refund it back to you"
    Don't be naive, that's the company's way of withholding (or I should say delaying paying) approx 60K of your wages from you. Added up with the other irregularities you mentioned, I would be very careful.

    That's money that you could put to some use. If you don't trust yourself to save it, you can go with the tax reserve certificates that Trebor recommended.

  10. #20

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    Quote Originally Posted by willcol1:
    To be honest I do find this system rather strange but I do trust my employer and that won't get screwed over. I think they're just trying to help in their own way. I quote again:

    "Don’t worry, as these withheld taxes will all contribute to your final income tax payments. Every April, we file our tax returns, and we receive our final tax bills around Sept. We will reconcile with these withheld taxes with your final tax bill. Any amount above the withheld taxes, you will pay to the HK government; any amount below, we will refund it back to you"
    The point is, they are illegally deducting your salary and quite honestly I'm surprised any employer will do this at the risk of being fined. That money is yours and it is not their decision how you spend it until the tax is due.