[PhilE]

Lots of very helpful advice here - thanks also from me.

One additional question which might be harder to answer since I don't suppose many ex-expats browse here...

How do you get your overpayments back when you leave the HK SAR? e.g. if you paid your advance tax payments for the year 07/08 in Jan/Apr 2008, but then returned to the UK in Jun 2008, how easy is it to get the c. 10 months of overpayment back?

[PDLM]

You will never be in that situation... the money that you pay in Jan/Apr 2008 relates to the period Apr 2007 - Mar 2008. When you leave in June 2008 you will owe taxes for 2-3 months and your employer should hold back your last paycheque until they have clearance from IRD that you have settled the bill.

[PhilE]

Sorry PDLM, had a blonde moment there Seems like I'm onto a good thing (cash flow wise at least) by starting work in February.

[penguinsix]

FWIW, be careful of an emergency recall to the US by your employer. Should you go home, your tax bill will be due immediately before you leave Hong Kong. Shouldn't be a problem if you are withholding a certain amount to savings, but can take you by surprise as you are packing your things to leave.

[ravi]

Originally Posted by PDLM

No - that's not how it works. If your company gives you a housing allowance (and has the proper controls in place to check that you do actually spend in on housing) then the amount of the housing allowance will not be taxed. Instead the provision of housing is deemed to be worth 10% of the remainder of your salary and you are taxed at the normal rate on that.

So if, for example, you get a salary of HK$100,000 per month and a housing allowance of HK$20,000 per month AND you spend at least HK$20,000 per month on rental then you will be taxed as if you earned HK$110,000 per months. It doesn't actually matter how much the housing allowance is provided that you do actually spend it on housing - even if the allowance was HK$50,000 you would still pay tax on HK$110,000.

Slightly bizarre perhaps, but that's the way it is.

Very useful information. What does the company need to do from thier side? Would they need to change contracts to specify a portion of salary is towards Housing? And would they need to do any additional paperwork or hire new staff to maintain and report this information? I ask because I know thats the first reaction usually from my accounts manager...

[PDLM]

My understanding (from my experience on the "receiving end", not as an HR/payroll specialist) is that your company must:
a) specify in your contract the amount of your package that is a housing allowance
b) have sight of the originals and make copies for their records of your tenancy agreement and rental receipts
c) report the allowance and the rentals actually paid on the tax returns that they make to the Inland Revenue
d) be able to produce the necessary document copies if tax audited

[Meerkat]

PDLM, thanks for persevering with this explanation, the penny has finally dropped.

Very much appreciated

[PDLM]

One other point to bear in mind... if you get a bonus that is a significant part of your total package, and that bonus is defined as a percentage of your base salary then the tax savings from converting part of your base salary into housing allowance may not be sufficient to offset the fact that the absolute size of your bonus may drop because your base salary on which it is based has dropped. Unless of course you get the percentage of your bonus increased to compensate. It would be dangerous to define a bonus based on the amount including the housing allowance - I could imagine IRD not liking that at all.

[freeier]

and also for the computation of the housing allowance of 10% of base pay, the bonus count towards part of your base pay. i.e. if your actual rental is like 15% of your monthly pay, but you are getting 1 full year of bonus, then it is more costly to use the housing allowance provision.

[wongjc]

Can anyone help me to find out the dental cost in Hong Kong for the following ??

simple extraction
filling
x-ray
cleaning

Many thanks in advance