Hong Kong Tax?

[CookiemonsterII]

Let's say I make 500,000 a year, of which 20,000 a month is rental reimbursment.

My questions is simple, how much do I pay in tax for that year? Could someone please help me here?

As I understand, I can deduct the rental reimbursment from my salary. Then my yearly income becomes 500,000 - 12*20,000 = 260,000. Is this right, and how do I calculate my tax from that?

I am single, no kids. Basically I don't think I can make any further deductions, there aren't that many anyway.

Thanks a million!

[larac]

The whole tax thing gets kind of complicated and a bit confusing. Basically if you save 15% then you'll be ok. You get your first 100,000 per year tax free, then you get taxed at 2% for the next 30,000, 8% for the next 30,000, 14% on the next 30,000 and then 16% on the rest. But they have a couple of different options for calculating the whole thing and the rental reimbursement, this is just one way, but the good thing is you only get charged the lowest. Then next year the rates change to 2%, 7% and 13%. But when you get your first bill it is usually after you have been here a year depending on the time of year that you start so they charge you for what you have to pay for the past year plus the next year and you pay in 2 installments. To give you an idea the tax on my gross income only worked out at 2% yet my fiance's worked out at 12% due to the different incomes we earn, length of time we've been working here and the amount of our rental reimbursement. Save 15% then you don't have to worry and if your bill comes in less you have some money in the bank to celebrate with.

[CookiemonsterII]

Perfect, just the info I wanted! Thanks a lot!

[freeier]

on the rental thing.
first u deduct the 20k per month from the rental, so basic = 260k
add 10% to it and u are taxed at 260 + 26 = 286k income.

while that sounds good. u also have to make sure your actual rental is 20k p/m. so u have to keep the rental contract etc to provide your HR for them to submit your pay as 286k inclv rental.
i doubt someone that makes 500k p/a wld be willing to spend half of that on rental. so the savings might be lesser.

also note that your bonus wld go into the computation. so if u actually have 500k + 200k in bonus, then yr computation wld become (700k-240k)*1.1 as taxable income (before deductions)

[sp1key]

You get your first 100,000 per year tax free, then you get taxed at 2% for the next 30,000, 8% for the next 30,000, 14% on the next 30,000 and then 16% on the rest.

thanks for the info that certainly clears everything up!!!

[Moving2HK]

The whole tax thing gets kind of complicated and a bit confusing. Basically if you save 15% then you'll be ok. You get your first 100,000 per year tax free, then you get taxed at 2% for the next 30,000, 8% for the next 30,000, 14% on the next 30,000 and then 16% on the rest. But they have a couple of different options for calculating the whole thing and the rental reimbursement, this is just one way, but the good thing is you only get charged the lowest. Then next year the rates change to 2%, 7% and 13%. But when you get your first bill it is usually after you have been here a year depending on the time of year that you start so they charge you for what you have to pay for the past year plus the next year and you pay in 2 installments. To give you an idea the tax on my gross income only worked out at 2% yet my fiance's worked out at 12% due to the different incomes we earn, length of time we've been working here and the amount of our rental reimbursement. Save 15% then you don't have to worry and if your bill comes in less you have some money in the bank to celebrate with.

Larac,
I didn't follow Hong Kong news in the last months but will move to Hong Kong in July. Did they announce cutting the income tax rates to max. 13%?! What about the GST? Did they decide to introduce it?

Thanks!

[larac]

I'm pretty sure the GST idea died and the tax rates I gave you are just what was on my tax form - if the law has changed to 13% then I don't know but great if it has.