Case scenario

Examples of salary tax computation resulting from MPF Mandatory Contributions (MC) and Tax Deductible Voluntary Contributions (TVC).

  A B C
  Single, monthly salary HK$30,000 Single, monthly salary HK$60,000 Married, 1 child (4 years old), monthly salary HK$60,000, spouse not working
Total income 360,000 720,000 720,000
  MC1 only MC + TVC2 MC1 only MC + TVC3 MC1 only MC + TVC3
Less: MC deduction 18,000 18,000 18,000 18,000 18,000 18,000
Less: TVC deduction N/A 18,000 N/A 60,000 N/A 60,000
Net income 342,000 324,000 702,000 642,000 702,000 642,000
Less: allowance 132,000 132,000 264,000
120,000
Net chargeable income 210,000 192,000 570,000 510,000 318,000 258,000
Tax payable 17,700 14,880 78,900 68,700 36,060 25,860
Tax savings from TVC N/A 2,820 N/A 10,200 N/A 10,200
Single, monthly salary HK$30,000
Total income: 360,000
  MC1 only MC + TVC2
Less: MC deduction 18,000 18,000
Less: TVC deduction N/A 18,000
Net income 342,000 324,000
Less: allowance 132,000
Net chargeable income 210,000 192,000
Tax payable 17,700 14,880
Tax savings from TVC N/A 2,820
Single, monthly salary HK$60,000
Total income: 720,000
  MC1 only MC + TVC3
Less: MC deduction 18,000 18,000
Less: TVC deduction N/A 60,000
Net income 702,000 642,000
Less: allowance 132,000
Net chargeable income 570,000 510,000
Tax payable 78,900 68,700
Tax savings from TVC N/A 10,200
Married, 1 child (4 years old), monthly salary HK$60,000, spouse not working
Total income: 360,000
  MC1 only MC + TVC3
Less: MC deduction 18,000 18,000
Less: TVC deduction N/A 18,000
Net income 342,000 324,000
Less: allowance 264,000
120,000
Net chargeable income 318,000 258,000
Tax payable 36,060 25,860
Tax savings from TVC N/A 10,200

Source: Inland Revenue and MPF Schemes Legislation (Tax Deductions for Annuity Premiums and MPF Voluntary Contributions) (Amendment) Bill 2018 gazetted - File Ref: INS/2/18C

Note: all figures in the above example are calculated in HK dollars. Example is for reference only and does not constitute any form of advice.
Investment involves risk. You should consider your own risk tolerance level and financial circumstances before making any investment choices.

1. For ease of calculation, the employee MPF MC is taken to be 5% of the employee’s monthly income, with a monthly maximum contribution limit set at HK$1,500.

2. For ease of calculation, TVC is taken to be 5% of the employee’s monthly income, with a monthly maximum contribution limit set at HK$1,500.

3. To enjoy maximum tax concession of HK$10,200, TVC is taken to be maximum tax-deductible limit of HK$60,000.