It won't be quite that much - at income of $200K your tax bill for the year is only HK$5040 anyway!
The tax treatment of housing allowance is odd. Assume you pay $5K/month on rent and your HR agrees that this can all be defined as Housing Allowance in your contract, then you would be taxed on $154K/year rather than $200K/year, which would be total tax for the year of $1220. So you would save $3820 (for the whole year).
In addition you will need to pay MPF of 5% ($10K/year).
Last edited by PDLM; 20-12-2009 at 01:56 AM.
Not really - as noted above. MPF is at most $10K/year, tax at most $5K.
If you rented at $8K per month and it was all defined as Housing Allowance then you wouldn't pay any tax, only MPF. So you would still have almost $8K per month to live off, which should be doable.
On reflection, MPF maybe lower than that - I'm not sure that it's charged on Housing Allowance, so if your package was 8K HA, 8.66K salary then you might only be paying $433/month in MPF.
Last edited by PDLM; 20-12-2009 at 01:59 AM.
It really doesn't need to be that much. Basic internet and the free TV channels is less than $200/month. If you avoid international SMS and make only a few IDD calls to low cost places (US, UK fixed, Aus fixed, etc) then your mobile phone + IDD bill shouldn't be more than $150/month. If your employer needs you to have a blackberry type thing then they will pay for it.
Thanks PDLM, that was really helpful!
About the housing reimbursement scheme, from what the HR said it sounds like I can redeem some tax money to pay for rents.. so I am not sure if that entitles me to have less taxible income...
I wonder if it is possible to find a studio for less than 7k(utilities inclusive) in kowloon, within 30 mins commute to Central and neighbourhood safe enough for a single girl. The place can be tiny but the interior has to be relatively new or at least recently refurbished, and furnished. Too bad when it comes to accommodation, I am a bit picky... not on luxury but on "cleanliness" and can't appear "old"... otherwise it drives me crazy...
For TV, how much more expensive is it to go cable and get a couple foreign channels? My company will likely provide me a blackberry, will they also cover the bill to some extend? For long distance call I am using Skype phone which is fairly affordable. I hope this service is available in HK too.
Also, the company provides medical benefits but HR didn't explain in detail. To what extend will I get covered on medical expenses in case I need to see a doctor for minor ailments? I heard the public hospital system isn't very efficient (long waiting time) and private doctors and medicines are very expensive...
Much thanks!
Last edited by serendipity99; 20-12-2009 at 04:19 AM.
If the money can get me an average living in HK (i.e. after paying off all the basic things, I don't have to be thrify when it comes to occational eating out and entertainment) I really want to come because it is a good opportunity and will open door to other future opportunities.
I think you should discuss with your HR what is exactly inluded in your deal. Like you said before, your company has transfered Manu foreigners to Hk so they should know all the details. Find out exactly what they are paying for.
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it sounds like your 'housing allowance' is similar to mine, in that a percentage of your salary is earmarked as housing allowance for tax purposes...you entire salary is paid to you and MPF is calculated on the entire amount...at tax time, your proportion of housing allowance is claimed and reduces your taxable income...you won't actually get any money back, it's just a re-working of numbers in your favor
at least that is my understanding, based solely on my situation