Tax for Training Visa

[PDLM]

They calculate by taking your TOTAL salary income in the tax year - it's not based on monthly amounts as such.

As this document shows: http://www.ird.gov.hk/eng/pdf/pam61e.pdf

Your income chargeable to tax is your total income in the tax year MINUS your allowances & deductions. In the simplest case as a single person with no other deductions your total allowance is HK$100,000.

So in your case for 2008/9:

Total income = $175000
Allowances = $100000
Net chargeable (i.e. taxable) income = 175000-100000=75000.

The first $35000 of taxable income is taxed at 2%, which is $700 of tax.
The next $35000 of taxable income is taxed at 7%, which is $2450.
The next $35000 of taxable income is taxed at 12%, but in your case you only have $5000 of income in this band, so that's $600 more tax.

Total tax bill for the year: $700+$2450+$600 = $3750.

[PDLM]

Also if your employee will MPF for u then it will be less and u will pay hkd 400.00.

If you are on a fixed term contract of 12 months (as in this case) you are exempt from MPF.

[mad-d0g]

Thanks guys...i think I understand it now. Thanks for your detailed explanation as well. I thought they will only tax if the monthly salary is at least HKD35,000. Well, at least that's the case in Spore. If you don't make more than a certain amount monthly in Spore, you are exempted from income tax. Probably that's one reason why I was confused.

Anyhow, I got it now. Thanks!

added: btw, do you think income tax in HK is considered low among other countries?

[Alby]

mad-d0g, You stated that your rent is coming out from the HK$25,000 per month - right? and;

You expect to pay approx. HK$10,000 per month in rent - right?

Now, PDLM and other GEOEXPATERS:
If in his contract / internship agreement, if his employer (the place he is interning) includes a clause something to the effect "HK$25,000 per month including HK$10,000 per month for living allowance."

Doesn't mad-d0g only have to pay tax on the difference - in this case being HK$15,000 per month?

[mad-d0g]

To be exact, there's a clause on tax payment that reads like this:

The bank shall not be liable for social security or payment of taxes in relation to this employment. The aforementioned payment (HKD25,000) will be paid to you without any deductions and you will be personally liable for declaring and paying all taxes relating to this employment.

I guess I'll hv to pay my own rent which I expect it to be in the range of 5k to 10k. Are there any taxes I missed out? (I hope there's none)