Hong Kong budget 2024-25: which high earners are going to be forking out more on salaries tax?
- City leader John Lee is the only government official set to contribute extra to public coffers under finance chief’s plan to introduce two-tiered standard rates tax regime
- MTR Corp executives, finance industry leaders and Hong Kong’s former ‘King of Employees’, Canning Fok, will also surpass HK$5 million tax threshold
Hong Kong’s leader, real estate tycoons, university heads and executives at some of the city’s largest companies are in line to pay additional income tax announced as part of the finance chief’s budget speech on Wednesday.
Financial Secretary Paul Chan Mo-po said authorities hoped to introduce a two-tiered standard rates tax regime on salaries, covering some of the city’s wealthiest individuals, in the coming financial year.
Under the new measure, residents will pay a standard rate of 15 per cent for the first HK$5 million (US$638,792) of net income, before going up to 16 per cent for anyone who surpassed that amount.
The tax is currently calculated at a standard rate of 15 per cent or progressive rates ranging between 2 per cent and 17 per cent of a taxpayer’s net income, according to whichever figure is lower.
Chan said the shake-up would affect 0.6 per cent of the city’s taxpayers, or about 12,000 people, and generate an extra HK$910 million each year in public revenue.
A government source said 30,000 Hong Kong residents were currently paying the 15 per cent standard rate, describing the HK$5 million cap as a “reasonable” threshold that balanced the need to expand public coffers while preserving the city’s competitive tax policies.
According to another insider, a taxpayer who had two children, who could contribute to the child allowance, would need to earn at least HK$5.7 million a year before being charged the 16 per cent standard tax rate.
But the city’s new tax rates would still be lower than those in other locations, such as Japan at 55.9 per cent, the United Kingdom at 45 per cent and Singapore at 24 per cent, the source added.