Salaries tax in Hong Kong and your UK split year

Hong Kong's salaries tax tops out at 17%, and many Brits on decent pay end up handing over less than a tenth of their salary. The two surprises are a first bill that includes next year's tax in advance, and an HMRC that still thinks you live in Croydon unless you tell it otherwise.

The short version

Salaries tax is charged on income from a Hong Kong job for the year of assessment, 1 April to 31 March [3]. Employers don't run PAYE: you pay the IRD directly after you file.
For 2026/27 the basic allowance is HK$145,000 (about £13,700) and the married person's allowance HK$290,000, up from HK$132,000 and HK$264,000 in 2025/26 [4][5].
Rates go from 2% to 17% on bands of HK$50,000, capped by a standard rate of 15% of net income (16% above HK$5 million) [4].
In the UK, split-year treatment can take your Hong Kong salary out of UK tax from the day after you leave, but only if you fit one of the cases in the rules [6][7].
When you leave Hong Kong, your employer must file form IR56G at least a month before you go and hold back your final pay until the tax is settled [8].

Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = HKD 10.5659).

How salaries tax works

Back home, the taxman takes his share every payday through PAYE. In Hong Kong, your employer reports what it paid you to the IRD (on form IR56B each year, IR56E when you start), and you file your own return and pay a bill. It feels strangely grown-up.

You start work. Your employer files form IR56E within three months of your start date [10].
The return arrives. The IRD sends individual tax returns in the spring after the tax year ends. Newcomers who don't receive one must tell the IRD they're chargeable within four months of the end of the basis period [3].
You file, on paper or online through eTAX, declaring all your Hong Kong employment income, including housing and other benefits.
You get an assessment for the year just gone, plus provisional tax for the current year, estimated from your last year's income. It's usually paid in two instalments.
Next year, the provisional tax you paid is set against your final bill, and a new provisional charge is added.

That provisional tax is what catches newcomers. Your first assessment can cover nearly two years of tax at once, so put money aside from your first pay packet. If your income drops, for example because you're leaving or changing jobs, you can apply to hold over some of the provisional tax.

What counts as income

With a Hong Kong employment, all earnings from that job count: salary, bonuses, commission, allowances and most benefits, including a place to live provided by your employer [3]. Housing is not taxed at its full value: it's counted as a "rental value", normally a set percentage of your other income, which is why many expat packages provide a flat rather than a cash allowance. If your job is based outside Hong Kong, only your days here count, and a visitor spending no more than 60 days in a tax year can be exempt [3].

Allowances, deductions and rates for 2026/27

The government raised most allowances from 2026/27; the law passed the Legislative Council on 13 May 2026 [5].

Allowance	2025/26	2026/27
Basic	HK$132,000	HK$145,000 (about £13,700)
Married person's	HK$264,000	HK$290,000 (about £27,400)
Each child (other years)	HK$130,000	HK$140,000 (about £13,250)
Child in its first two years	HK$260,000 in the year of birth	HK$280,000 (about £26,500)
Single parent	HK$132,000	HK$145,000
Dependent parent aged 60+ (not living with you)	HK$50,000	HK$55,000

Source: IRD Budget tax measures and the 2026-27 tax facts summary [5][9].

The main deductions, which come off before allowances [9]:

Deduction	Cap 2025/26 and 2026/27	Roughly in pounds
Mandatory MPF contributions	HK$18,000	£1,700
Voluntary MPF and qualifying annuity premiums (combined)	HK$60,000	£5,680
Voluntary Health Insurance Scheme premiums	HK$8,000 per insured person	£757
Domestic rent	HK$100,000 (HK$120,000 with a child, conditions apply)	£9,460
Home loan interest	HK$100,000 (HK$120,000 with a child, conditions apply)	£9,460
Self-education expenses	HK$100,000	£9,460

Note that the domestic rent deduction is for rent you pay yourself. If your employer already provides the flat, you can't claim it as well.

The rates

Net chargeable income is taxed at 2%, 6%, 10% and 14% on successive bands of HK$50,000, then 17% on the rest. The first HK$200,000 of net chargeable income costs HK$16,000 in tax [4]. You pay the lower of that progressive bill or the standard rate of 15% on your net income before allowances, and 16% on net income above HK$5 million [4]. A single taxpayer only reaches the standard rate zone at about HK$2.13 million a year (about £201,800) in 2026/27 [4].

The government also cut 2025/26 final salaries tax by 100%, up to HK$3,000 (about £284) per case, with no need to apply. It doesn't apply to provisional tax [5].

Your UK split year

The UK and Hong Kong tax years are five days apart (6 April against 1 April), which is handy: if you move in spring, your two "years" line up neatly. If you move in, say, September, the UK still treats a tax year as a single unit unless split-year treatment applies.

Split-year treatment needs two things: you're UK resident for the whole tax year under the Statutory Residence Test, and you fit one of the departure cases [6][7]. The three most common for people moving to Hong Kong:

Case	Who it fits	Key conditions
Case 1	You start full-time work in Hong Kong	Full-time work overseas for the rest of the UK tax year, with UK days and UK working days below limits reduced in proportion to the months left
Case 2	Your partner moves for a Hong Kong job and you go with them	You join them abroad and keep your UK days below the reduced limit
Case 3	You leave and stop having any UK home	No UK home for the rest of the tax year, and you set up home or become resident in Hong Kong within six months

From the day after you leave, the overseas part of the year is treated as non-UK resident, so your Hong Kong salary isn't taxable in the UK. UK income such as rent stays taxable all year. In the following tax year, the third automatic overseas test usually confirms non-residence if you work full-time in Hong Kong, spend fewer than 91 days in the UK and work more than three hours in the UK on fewer than 31 days [6].

What to do:

Tell HMRC with form P85 if you're not in Self Assessment, or claim split-year treatment on the SA109 residence pages of your return. You can't use HMRC's online services to report leaving [2].
Keep evidence: your Hong Kong contract, your flight dates, the tenancy agreement and when you sold or let your UK home.
Count your days in the UK, including Christmas visits.

Our guides to split-year treatment and the P85 and your last tax year go through the detail. If you don't fit a case, both countries can tax the overlap, and the 2010 UK–Hong Kong agreement gives credit for Hong Kong tax against the UK bill [1]. A tax adviser who knows both countries can check your situation.

Leaving Hong Kong: tax clearance

Hong Kong is serious about collecting tax before you go. When you leave for good [8]:

Your employer must file form IR56G no later than one month before your expected departure.
From then, it must hold all money owed to you for a month, or until the IRD issues a letter of release.
You file a departure return, pay the assessment, and get the letter of release. Paying by cash, EPS or cashier order speeds this up.
You give the IRD an overseas address for any later correspondence.

That held-back final pay can be a nuisance when you've a removal van and flights to pay for, so plan for it. On the UK side, your return counts as an arrival, and split-year treatment may apply again; see coming back: tax in your first year home. Members of our community group for Brits in Hong Kong swap notes on the departure paperwork every summer.

Salaries tax in Hong Kong: allowances, the April tax year and splitting your UK year