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Hong Kong Salaries Tax - Personal Assessment

What is "Personal Assessment (PA)"?


Under the Inland Revenue Ordinance, there are 3 types of direct taxes, namely, Salaries Tax, Profits Tax and Property Tax. Personal Assessment is not a tax levy. It is a method of computation of tax that may lighten the tax burden of certain taxpayers who are subject to Profits Tax and/or Property Tax and/or Salaries Tax. However, there is no merit for choosing PA if the relevant taxpayer only liable to pay Salaries Tax.


Deductions and allowances under PA


Sole-proprietor or partners of a business and property owners who receive rental income are assessed to Profits Tax and Property Tax respectively at standard rate. By choosing "Personal Assessment", they may claim the following deductions and/or allowances on their income/profits and their tax liabilities will be computed at progressive rates applicable to Salaries Tax:


  1. interest incurred on money borrowed for the purpose of producing property income, (the amount deductible should not exceed the net assessable value of each individual property);
  2. approved charitable donations;
  3. elderly residential care expenses (from year of assessment 1998/99 onwards) ;
  4. home loan interest (from year of assessment 1998/99 onwards);
  5. business losses incurred in the year of assessment;
  6. losses brought forward from previous years under Personal Assessment; and
  7. personal allowances as follows:
    • basic allowance
    • married person's allowance;
    • child allowance;
    • dependent brother/sister allowance;
    • dependent parent/grandparent allowance;
    • single parent allowance;
    • disabled dependant allowance.

If the total of the tax already paid exceeds the tax chargeable under personal assessment, a refund will be made.



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