i am a kindergarten teacher in HK and have not been offered a wage increase but instead, been offered a living allowance. I own a property here - what real benefit is this living allowance, i thought it was meant as a tax break if you rented a property here. Do i accept this offer or push for a wage increase
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The tax advantage applies only if you're renting.
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ok. Im confused.
im on 22k and have been offered a 5k living allowance. What does this actually mean? sorry pretty new to HK and a bit confused about the tax implications etc
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Unless you rent, you will simply be taxed on income of $27,000. If you rent, you will be taxed on your base + 10% of your base, so 22+(10% of 22)= $24,200.
The tax rate is never higher than 16% of earnings (can be lower).
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tggb
20 yrs ago
You will be taxed on the whole amount if you live in a property you own. If you sell the property, then you will be taxed only on the base HK$22k plus an extra 10% on top of the HK$22k because this is what inland revenue considers quarters / housing allowance.
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Your tax will go up slightly (about $500 per month) - but you will get the bonus of the repayments (if any) coming out of your employers pocket rather than yours - so in effect it is a $5,000 dollar pay rise per month (minus tax) if they will let you put it toward your mortgage.(if you have one).
If you don't have a mortgage on your property - ask for the same in cash per month - it is the same money to them.
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Aha. Slightly relieved...
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i have a mortgage so does that mean efectively i will get 27k each month - and taxed on that amount.
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