Your demand note — the tax bill Hong Kong's Inland Revenue Department (IRD) sends you — includes provisional salaries tax because it is provisional tax for the current assessment year, usually based on the preceding year's income after allowances, charged on the same bill as the final tax for the year just ended. This matters most to salaried employees who pay their own tax, especially anyone whose bill shows both charges together for the first time and now faces a doubled-looking total.

What "provisional" means

The year of assessment — the 12 months from 1 April to 31 March that a bill covers — can only be settled after it ends, so the final tax (the bill for the year just finished) arrives well after the income was earned. Provisional salaries tax bridges that gap: it is a provisional assessment for the current assessment year, usually based on the preceding year's income less allowances. Because Hong Kong employers generally do not withhold salaries tax from each pay packet, you settle the bill yourself rather than through payroll.

Where the two numbers sit on your bill

Page one of the demand note shows the total tax payable and the instalment details — an instalment being one of the scheduled payments you make. The total is normally paid in two instalments, with the amounts and due dates printed on page one. Page two shows the computations: how the final tax and the provisional tax were each worked out.

A worked example (illustrative figures)

Assumptions, all hypothetical round numbers:

  • You are a salaried employee with steady income.
  • Final tax for the preceding assessment year: HK$30,000.
  • Provisional tax already paid for that preceding year: HK$28,000.
  • Current assessment-year provisional tax: HK$30,000. This illustrates an ongoing taxpayer, with prior payments credited.

Steps:

  1. Credit the prior provisional payment: HK$30,000 − HK$28,000 = HK$2,000 final balance.
  2. Add current provisional tax: HK$2,000 + HK$30,000 = HK$32,000 total payable.
  3. Using the IRD specimen arrangement, the first instalment is HK$2,000 + 75% × HK$30,000 = HK$24,500; the second is 25% × HK$30,000 = HK$7,500. Confirm the actual amounts and dates on your demand note.
  4. Reserve for the single total of HK$32,000, counted once, and ensure funds are available before each due date.
  5. When the current assessment year is finally assessed, its provisional tax already paid is credited against that year’s final liability; any balance and a fresh provisional assessment are shown on the later note.

Common mistakes

Mistake 1 — "Provisional tax is a fine or an extra tax forever." It is provisional tax for the current assessment year, usually based on the preceding year's income less allowances. When that year is finally assessed, the computation on page two settles what remains.

Mistake 2 — "My employer already withheld this from my salary." Hong Kong salaries tax is generally paid by you according to the demand note, not withheld from every pay packet — so the bill arriving is the normal process, not a double charge by your payroll.

Mistake 3 — "The two instalments are two separate taxes." They are one total — final tax plus provisional tax — normally split into two payments. Page one shows the total and the dates; page two shows which part is which.

Mistake 4 — "The provisional amount is exactly what I will owe." It is an estimate from the preceding year. If your income changes, the final figure is worked out later and the difference is settled then.

Checklist

  • Read page one for the total payable and both due dates; read page two for the final-versus-provisional breakdown.
  • If both charges appear for the first time, budget for the combined total as one reserve, counted once.
  • Keep your income records so you can follow each computation.
  • If your income has dropped, you may come across mentions of applying to "hold over" provisional tax. Our sources do not cover that rule, so check the IRD website for the current eligibility conditions and timing before you rely on it.

Sources

Assessment-year dates, the basis of provisional tax, the two-instalment structure and the demand-note layout come from "A guide to Salaries Tax (1)" and "Demand Note for Individuals", both retrieved on 8 October 2026. Every dollar figure above is illustrative and hypothetical, not any real person's assessment. This article is AI-generated and AI-checked. It is general information — not investment, lending or tax advice — and it does not replace the IRD's official guidance.