Simple HK tax question

Closed Thread
  1. #1

    Simple HK tax question

    Hello forummers, I've a simple HK tax question for you. What are all the components of taxes in HK that I am liable for? I know that there's a 15% income tax and a min. 5% social insurance tax (mandatory provident fund) so this means that I am out of pocket for 20%? is that correct, and is that any tax components that I am not aware of?

    Can I opt out of the 5% social insurance in any way? I read that a foreigner who has social insurance back home can opt out of the scheme. In my home country, I used to make mandatory contributions to social insurance but obviously since I will be working in Hong Kong, I will no longer be contributing to my social insurance fund back home. Would that still qualify me for exemption from the HK MPF contribution?

    Last edited by FlyingCarpet; 18-02-2010 at 03:01 AM.

  2. #2

    Join Date
    Aug 2009
    Posts
    2,718

    not sure whether you can opt out or not, but please note that the 5% is capped at HKD 1000 per month. So as soon as you earn more than 20k/month, the cap applies.

    Also you can get all this money back once you leave the country.


  3. #3

    Join Date
    Feb 2009
    Location
    Gulf Region, ex Mid-Levels
    Posts
    1,933

    I think that in your first year you don't have to pay into the MPF scheme either.


  4. #4

    Join Date
    Mar 2007
    Location
    Gold Coast Marina
    Posts
    17,934

    Besides - MPF seems to be the one thing that gets taken out by employers so you might find you are already paying it!


  5. #5

    Join Date
    Jun 2005
    Location
    Hong Kong
    Posts
    23,205

    The good thing about the $1000/month MPF is that it must be matched by your employer, so it's free money. If you opt out then you're down $1,000/month.


  6. #6

    Join Date
    Feb 2009
    Posts
    8,341

    I wouldn't call the MPF a "social insurance tax". To me, a tax implies something you pay to the government and wont see again.

    MPF is more of a "forced investment". You pay $1000 a month and your employer pays $1000 a month. You also have a fair bit of control with what happens with this money. You can choose how it is invested and get monthly or quarterly statements to see it grow or shrink.

    I know with my MPF, I added $12,000 over the last year but it has grown about $50,000.

    So I wouldnt really call it a tax at all.