What is the income tax rate in Hong Kong?

Hong Kong offers a very attractive income tax system with a maximum effective rate of just 15%. This means that on a $75,000 salary, your effective income tax rate would be approximately 13.2%, which is significantly lower than most developed nations. The tax system uses a progressive scale for net assessable income, which is your income after deductions and allowances. The first HKD 50,000 is taxed at 2%, the next HKD 50,000 at 6%, the next HKD 50,000 at 10%, and the next HKD 50,000 at 14%. Any income above HKD 200,000 is then taxed at 17%. However, a "cap" is applied, ensuring your total tax paid does not exceed 15% of your total gross income, without any deductions. For example, if you earn HKD 585,000 (roughly $75,000 USD), after standard deductions and allowances, your taxable income might be around HKD 300,000. Applying the progressive rates, your tax would be approximately HKD 78,000. But because of the 15% cap, your tax would be limited to HKD 585,000 * 0.15 = HKD 87,750. In this case, the progressive calculation is lower, so you'd pay HKD 78,000, making your effective rate 13.3%. This low effective tax rate is a major draw for expats and professionals considering a move to Hong Kong. Just remember to factor in other costs of living, which can be high.