Self-employed and freelancer tax in Hong Kong 2026

Self-employed people file salaries tax or profits tax depending on whether they have an employment contract; those with both file both. Business-related expenses and mandatory MPF contributions (capped at HK$18,000) are deductible. Even if income is below the allowance or the business makes a loss, you must still file on time.

Key takeaways

Depending on whether they have an employment contract, self-employed people file salaries tax (employed) or profits tax (self-employed); those with both must file both.
Even if income is below the allowance or the business makes a loss, you must still file on time, otherwise it may be treated as a failure to file.
Business-related expenses (rent, equipment, advertising, etc.) and mandatory MPF contributions can be deducted for profits tax.
A tax return must be submitted within one month of receipt; those who have not received a tax return must notify the IRD within four months after the end of the year of assessment.

Who counts as self-employed?

Anyone who sells goods or provides services in their own name for profit, without a fixed employer, is self-employed (a freelancer). Common types include:

Online shop or Instagram shop owners

Selling goods in your own name, online or offline, counts as long as you are not employed by someone else.

Business partner

Running a business together with others (such as a tutoring centre, photography team or nail studio) and receiving a share of income from the partnership business.

Freelancers

No fixed employer; you take on projects and charge fees yourself. Common among designers, copywriters, photographers, illustrators, translators, fitness coaches and similar fields.

Casual part-time work

Short-term jobs such as exhibition staff, event helpers and relief teaching, with no long-term employment relationship.

What tax does a self-employed person need to file?

For self-employed people in Hong Kong, tax filing is divided by employment contract: those with a fixed employer file salaries tax, those who take on projects or run a business file profits tax, and those with both must file both. Even if income is below the allowance, a tax return must still be submitted on time.

Tax filing is based on whether an employment contract exists as the test:

Status	Tax to file
Employed by a company (employment contract, fixed pay, MPF contributions)	Salaries tax
Running your own business or taking on freelance work (no employment contract)	profits tax
Both employment income and self-employment income	Salaries tax + profits tax

Three examples of self-employed tax filing

Alen: A full-time marketing professional who takes on freelance work after hours, with clients paying by direct transfer. → Must file Salaries tax + profits tax

Ken: A freelance photographer with no employment relationship, who finds their own clients and sets their own fees. → Must file profits tax

Zoe: A part-time tutor at a language centre, working two days a week, with no other income. → Must file Salaries tax

Deductions for the self-employed

Business-related expenses

When filing profits tax, you can claim a deduction for any expense you can show is directly related to earning business income. Common items include:

Operating costs required to provide the services
Advertising and marketing expenses
Costs of equipment and apparatus used in the business
Cost of goods purchased and related procurement
Fees for accounting and tax filing advisers
Office rent, utilities and communication costs

Keeping all receipts and payment records is essential. In an IRD check, you will need to provide evidence that the expense is genuinely business-related.

Mandatory MPF contributions

Mandatory contributions that a self-employed person makes to an MPF scheme can be deducted as a business expense in the profits tax return, capped at HK$18,000 per year of assessment.Voluntary contributions Generally not deductible (except tax-deductible voluntary contributions).

Personal allowances and other deductions

Self-employed people are likewise entitled to the personal basic allowance and other deductible items (such as self-education expenses and voluntary health insurance scheme premiums); see Salaries tax calculation and personal allowances: a complete guide.

For the married person's allowance arrangements, see Married person's allowance and joint assessment: a guide.

Tax returns by status

Status	Tax return
Sole proprietorship	BIR60 (Tax Return - Individuals)
Corporation	BIR51
Unincorporated business	BIR52
Business operated by non-Hong Kong residents	BIR54.
Contract worker	IR56M.

How do I file without business registration?

Any profit-making business in Hong Kong must hold a Business Registration Certificate. If you have not yet registered, you must still file a tax return with the IRD. Those who earn income without any employment relationship and without business registration must file under salaries tax.

To learn about the business registration application process, see Guide to applying for a Business Registration Certificate.

How do I file with business registration?

Those with business registration will receive a profits tax return and must report total annual income, total expenses and deductible items, and have invoices, receipts and transfer records ready as the basis for the filing.

Operating through a company requires an accountant to audit

A business operated as a limited company must, regardless of income, submit audited financial statements each year under the Companies Ordinance, with an audit report issued by a licensed accountant, and file a profits tax return. Company filing is more complex than individual filing, involving the balance sheet, profit and loss account and expense details, but offers greater scope for tax planning. For details, see SetupHK accounting and audit services.

Six-step process for self-employed tax filing

Tax filing for the self-employed in Hong Kong takes six steps: receive the tax return, organise income and expense records, calculate deductible items and assessable profits, complete and submit the return, pay the tax (generally in two instalments), and keep up bookkeeping for the next year. The whole process can be done online (eTAX) or on paper.

Step 1: receive the tax return

The IRD generally sends out tax returns, or notices via eTAX, in early May each year. Self-employed people usually receive the Tax Return - Individuals (BIR60); those operating as a company receive the Profits Tax Return (BIR51).

Step 2: organise business income and expense records

Gather all client payments for the previous year of assessment (cash, bank transfers, FPS, etc.) and business-related expenses, and have receipts, invoices and transfer records ready.

Step 3: calculate assessable profits

Total income less operating expenses gives net profit; deducting qualifying deductible items then gives assessable profits, which is the basis for deciding whether tax is payable and how much.

Step 4: complete and submit the tax return

You can submit a paper return by post, or file online through eTAX. If you use paper, mind the posting time: the IRD goes by the date of receipt, not the date of posting, to decide whether the return is on time.

Step 5: Wait for the tax bill and pay your tax

The IRD generally issues the formal tax bill within two months of receiving the tax return; tax is usually paid in two instalments:

Instalment	Usual payment deadline
First instalment	Before mid-January
Second instalment	Before early April

Step 6: keep up bookkeeping to prepare for next year

We suggest keeping regular books and retaining supporting documents throughout the year, rather than scrambling to organise them each filing season. Complete income and expense records not only make filing quicker but also help you keep track of how the business is doing.

Consequences of late or non-filing

Under Hong Kong's section 51 of the Inland Revenue Ordinance, self-employed people are responsible for notifying the IRD of their chargeable income. Not having received a tax return does not remove the obligation to file; failure to file truthfully may lead to recovery of tax and penalties, and wilful tax evasion may lead to criminal prosecution.

Many self-employed people wrongly believe that not receiving a tax return means they need not file. In fact, section 51 of the Inland Revenue Ordinance expressly provides that taxpayers are responsible for notifying the IRD of any chargeable income.

What to do if you have not received a tax return: You must notify the IRD in writing within four months after the end of the basis period of the year of assessment.

Consequences of not filing: If discovered, you must pay the tax for all unreported years plus the corresponding penalties and interest; if deemed wilful tax evasion, the IRD may bring a criminal prosecution, affecting your credit record and future tax filing.

FAQ

If my income is below the allowance, do I still need to file?

Yes. The allowance determines whether you pay tax, while the filing obligation exists independently. As long as you carry on business activities, you must file with the IRD, or it may be treated as a failure to file.

If my company makes a loss, do I still need to file tax?

Yes. A limited company, whether profitable or loss-making, must submit audited financial statements and a profits tax return every year. This is a statutory obligation and is not waived because of a loss.

My part-time employer already reports salaries tax for me. Do I need to file separately for the self-employed part?

Yes. The IRD does not automatically combine the two parts of income; self-employment income must be filed separately under profits tax. Even if you have no self-employment income at all, you must state and confirm this in the tax return to complete the filing.

I found mistakes after submitting my tax return. Can I correct them?

Yes. You can send a written notice of amendment, or log in to the eTAX platform and use the “correct tax return information” function. We suggest acting early, to avoid having to amend after the IRD has already calculated the bill on the wrong information, which is a more cumbersome procedure.

Summary

The core principle of self-employed tax filing: regardless of income or business profit or loss, you must file on time. On that basis, organising business income and expense records properly and making good use of lawful deductions is how you reduce your tax burden while staying compliant.

If you need help organising your accounts or handling your tax filing, find out about SetupHK tax filing services, or contact the SetupHK team directly.