Hong Kong Salaries Tax – Place of Residence Provided to an Employee

If an Assessor of the Inland Revenue Department accepts that your employer has provided you with a place of residence, Rental Value (“RV”) should be computed and assessed to salaries tax. If it is not accepted, then the benefit provided by your employer must be assessed as a perquisite at its cash value, which means taxable in full.

Examples of perquisites are:

• rental allowance;
• refunds of mortgage payments; and
• subsidies on mortgage interest payments.

The RV will be calculated at a certain percentage (depending on the type of accommodation provided to you) of your total net income after deducting outgoings and expenses (excluding expenses of self-education).


If the place of residence provided is a residential property, you may elect to include the “rateable value” of the property instead of the RV, if that will reduce the amount of tax to be paid. Further, if you partly paid the rent to the landlord or your employer, your payment can be deducted in calculating the RV.

Rent Paid By Employee Refunded by Employer

When your employer has established clear guidelines for control and has exercised proper supervision over the reimbursement of either all or part of the rent that you pay as tenant to the landlord, the Assessor will accept the arrangement as if the employer directly provides a place of residence to the employee. The same with the above, RV will be calculated and included in your assessable income and the rental reimbursements will not be treated as income.

However, if your employer does not control how you spend the money or does not exercise proper control over the expenditure, the Assessor will regard the reimbursements as a cash allowance and include the full amount in your assessable income.

For details, please refer to the following examples show how an employee’s assessable income will be computed when his/her employer refunds all or part of the rent to him/her as below.

Example 1
Apart from paying salary of $50,000 every month, Ms W’s employer also granted her a full refund of the rent of $10,000 she paid for her flat upon inspection of the rental receipts. Ms W’s assessable income would be computed as follows.


Example 2
If Ms. W was only granted a partial refund of rent of HK$8,000 per month, Ms W’s assessable income would be computed as follows.


When filing your tax return, you do not need to attach your tenancy agreement, rental receipts or other documents that provide evidence of rental payment. Such documents, however, should be retained so that they can be provided upon request of the Assessor for review.

Sources：Hong Kong Inland Revenue Department’s websites

- https://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/residence.htm