Simple tax question

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  1. #1

    Simple tax question

    I earn $38k.

    I pay $7500 in rent. I have had my rent contract rubber-stamped too, so it's all official.

    how much should I save for tax each month?

    yes, i did ask my HR person at work, but got a very uncommitted response.


    thanks

    Shannon


  2. #2

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    Your taxes are calculated and paid annually. If you need to get an idea on how much to save, I suggest you go to this site...

    http://www.ird.gov.hk/eng/welcome.htm


  3. #3

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    http://www.ird.gov.hk/eng/ese/st_com..._06/stcfrm.htm

    Should tell you the amount you owe

  4. #4

    Join Date
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    Ballpark estimate, about a months' rent.

    Hey if tell us what company your at, your job title, and your experience, then I know at least on poster on these boards will be very happy!


  5. #5

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    If u pay 7500 a month on rent, ask your employer to put it as a housing allowance in your salary.
    You will then be taxed on 10% of that amount only.
    So if 7500x12=90000 of housing allowance, you will be taxed on 9000 only, so you'll save the tax you would have had to pay on the remaining 81000 HKD.


  6. #6

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    Quote Originally Posted by kristof:
    If u pay 7500 a month on rent, ask your employer to put it as a housing allowance in your salary.
    You will then be taxed on 10% of that amount only.
    So if 7500x12=90000 of housing allowance, you will be taxed on 9000 only, so you'll save the tax you would have had to pay on the remaining 81000 HKD.
    Er, no, that's not how it works at all. If the contract was changed to be HK$30.5K per month salary plus $7500 "housing allowance" then the taxable value of the housing allowance would be 10% of $30.5K = $3.05K per month and you would be taxed on $33.55K per month instead of $38K per month.

    But note that your employer must have "established clear guidelines to control and has exercised proper supervision over the reimbursements of either the whole or a part of the rent paid by the employee as tenant to the landlord" to ensure that you do actually spend your housing allowance on rent. Unless they do it already for other people they may not consider it worth the hassle of doing this.

    See this document for full details, specifically pages 4 & 5 for examples:
    http://www.ird.gov.hk/eng/pdf/pam44e.pdf

    And yes this does mean that the tax you pay is independent of the value of the housing allowance or property provided for you by your employer. Bizarre, but that's the way it is.

  7. #7

    thanks for the info guys, especially PDLM.

    all makes sense now I understand it.

    somehow the answers on this forum always exceed the info I get on the 'other' forum.....


  8. #8

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    Quote Originally Posted by shannon66:
    somehow the answers on this forum always exceed the info I get on the 'other' forum.....
    I tend to answer wherever I see the question first But there is more dross to wade through in the Other Place.