Hong Kong’s financial secretary delivered the 2026/27 Hong Kong budget on 25 February 2026, outlining a series of tax measures aimed at easing taxpayers’ burdens and enhancing Hong Kong’s competitiveness. This article highlights the budget’s salaries tax measures, including changes to allowances, deductions, and one-off reliefs that will impact individual taxpayers.
100% reduction of Salaries Tax and tax under Personal Assessment for the year of assessment 2025/26, subject to an HKD 3,000 cap.
To support families caring for elderly relatives, the deduction ceiling for residential care expenses is proposed to increase from HKD 100,000 to HKD 110,000 starting from year of assessment 2026/27.
Both the standard tax rate and progressive tax rates remain unchanged for 2026/27:
Celestine Yeung
BDO in Hong Kong
Tax Relief
100% reduction of Salaries Tax and tax under Personal Assessment for the year of assessment 2025/26, subject to an HKD 3,000 cap.Increases in Personal Allowances
To help mitigate the rising cost of living and support families, the budget proposes notable increases to various major allowances starting from year of assessment 2026/27:- Basic & married person’s allowances
- Basic allowance: increased from HKD 132,000 to HKD 45,000
- Married person’s allowance: increased from HKD 264,000 to HKD 290,000
- Single parent allowance
- Increased from HKD 132,000 to HKD 145,000
- Child allowances
- Basic child allowance: HKD 130,000 to HKD 140,000 per child
- Additional child allowance: HKD 130,000 to HKD 140,000 per newborn child
- Starting from 2026/27, the additional child allowance for newborns will be claimable for two consecutive years (instead of one).
- Allowances for dependent parents/grandparents
- Aged 55–59 (basic and additional): HKD 25,000 to HKD 27,500
- Aged 60 or above (basic and additional): HKD 50,000 to HKD 55,000
Enhancement of Elderly Residential Care Expenses Deduction
To support families caring for elderly relatives, the deduction ceiling for residential care expenses is proposed to increase from HKD 100,000 to HKD 110,000 starting from year of assessment 2026/27.
No Changes to Salaries Tax Rates
Both the standard tax rate and progressive tax rates remain unchanged for 2026/27:
- Standard Tax Rate (unchanged)
- First HKD 5 million of net income: 15%
- Remainder: 16%
- Progressive Rates (unchanged)
- First HKD 50,000 – 2%
- Next HKD 50,000 – 6%
- Next HKD 50,000 – 10%
- Next HKD 50,000 – 14%
- Remainder – 17%
Celestine Yeung
BDO in Hong Kong