The following table provides an example of the potential annual tax savings for individuals with different incomes and tax brackets. Assuming the taxpayer is only entitled to basic allowance, married person's allowance, child allowance and tax deductions from MPF mandatory contributions, the tax savings per year are (note):
| Single Person | Single Person | Single Person | Single Person | Married person, 1 child, spouse not working | |
|---|---|---|---|---|---|
| Monthly income | $15,000 (annual income: $180,000) |
$20,000 (annual income: $240,000) |
$30,000 (annual income: $360,000) |
$60,000 (annual income: $720,000) |
$60,000 (annual income: $720,000) |
| Original tax payable | $780 | $3,760 | $17,700 | $78,900 | $36,060 |
| Amount of QDAP premiums and/or of TVC | $9,000* | $12,000* | $18,000* | $60,000 | $60,000 |
| New tax payable | $600 | $3,040 | $14,880 | $68,700 | $25,860 |
| Annual tax savings | $180 | $720 | $2,820 | $10,200 | $10,200 |
You can calculate your tax liability by using the Tax Calculator developed by the Inland Revenue Department.
Note: The example is only for illustration and reference. While the relevant tax deductions can help the taxpayer save up to $10,200 per year, it does not mean that any taxpayer who uses up to the deduction cap of $60,000 can enjoy $10,200 in tax savings. Tax savings depends on a number of factors, including personal income level, entitled tax allowances and deductions as well as the amount of qualifying deferred annuity premiums or TVC, etc. The above example takes 20 March 2019 as the date of calculation.
* For the 3 scenarios, it is assumed that the taxpayer will not make $60,000 of tax deductible savings given his/her relatively low income, and hence will not make claims with the full tax deductible amount for qualifying deferred annuity premiums and TVCs.
20 March 2019
