Posted by
solomani
18 yrs ago
Hi all,
What is the tax year in HK from-to?
Also, on another thread which I have lost track of someone said you could claim your rent as a tax break. Looking at the HKIRS site it doesn’t look very straightforward or even beneficial. Can someone with experience or an understanding of how this works explain it a bit more for me? The options I am seeing are:
1. Company pays for all your rent.
2. Company pays for some of your rent.
3. Company pays rent out of your wage pre-tax.
4. You pay for all the rent post tax.
If the company is paying for your rent in some way as part of your package then it makes sense to claim that component on tax. However if you fall into option 3 and 4 it doesn’t seem to make sense to claim it back on tax since it seems to effectively increase your salary. So it either works out as a wash or slightly detrimental. The HKIRS website lists lots of variables so it’s hard to pin-point the exact situation to perform some calculations on. Figured someone here has probably done 1 or all of these options and maybe able to shed some light.
Thanks in advance.
Please support our advertisers:
Excellent. Thanks for the clarification.
Please support our advertisers:
So the math is:
Wage: $100,000
Total rent paid: $40,000
Difference: $60,000
then add 10% back of your wage in: $10,000
Total assessable income: $70,000
?
Please support our advertisers:
sxc
18 yrs ago
Correct, except for the 10% calculation. The 10% is on the "pre-rent" amount, so your taxable income is $60,000 x 1.10 = $66,000.
Note that on your annual income statement, the employer will state income of $60,000. They also note on the statement that you personally paid rent of $40,000 (ie the lease is not in the company name), and the company reimbursed you for this.
If the lease is in the company name, they will still state the rent amount, and put it into a different box on the form. Tax effect is the same.
The tax department will then add on the 10% when they issue your tax demand note (ie tax assessment) - you do not add on the 10% yourself.
Please support our advertisers:
So, it should look like...
Wage: $100,000
Total rent paid: $40,000
Difference: $60,000
then add 10% back of your Difference(10% * $60,000): $6,000
Total assessable income: $66,000/month
Thanks!
Please support our advertisers:
sxc
18 yrs ago
Yes that's correct. Also note that if your rent to income ratio is low, then you shouldn't do this arrangement. For example:
Wage: $100,000
Rent: $5,000
Difference: $95,000
Assessable income = $104,500
Please support our advertisers:
Generous tax office, thanks again.
Please support our advertisers:
You must be logged in to be able to reply.
Login now
Copy Link
Facebook
Gmail
Mail