AGI Calculator
Enter gross income and deductible items (MPF, charitable donations, self-education, etc.) to compute Adjusted Gross Income (AGI) and the deduction ratio, mapped to Hong Kong's assessable income concept.
Input Data
Results
At a glance:Adjusted Gross Income (AGI) is a US-tax concept: total income minus 'above-the-line' deductions (e.g. retirement contributions, student-loan interest, HSA contributions). AGI drives taxable income and many credit thresholds. Hong Kong has no exact AGI, but the logic is similar — subtract allowable deductions (MPF cap HK$18,000, approved donations, self-education, VHIS, QDAP, etc.) from total income to reach an amount close to 'assessable income'; after allowances you get the net chargeable income for progressive rates. This calculator subtracts your deductions from gross income to show the adjusted income and deduction ratio.
Formula
AGI = Gross income − Σ deductions
Total deductions = MPF + donations + self-education + others
Deduction ratio = Total deductions ÷ Gross income × 100%
$$\text{AGI} = \text{Gross Income} - \sum_i D_i$$$$\text{Deduction Rate} = \dfrac{\sum_i D_i}{\text{Gross Income}}\times 100\%$$How to Use
- Enter total annual gross income.
- Enter each deduction: MPF, charitable donation, self-education, others.
- The tool totals deductions and subtracts from gross income to give AGI.
- View the deduction ratio to see how much deductible items lower taxable income.
At a fixed HK$50,000 deduction, adjusted income and deduction ratio at different gross incomes
| Gross income (HK$) | Deductions (HK$) | Adjusted income (HK$) | Deduction ratio |
|---|---|---|---|
| 400,000 | 50,000 | 350,000.00 | 12.50% |
| 600,000 | 50,000 | 550,000.00 | 8.33% |
| 800,000 | 50,000 | 750,000.00 | 6.25% |
| 1,200,000 | 50,000 | 1,150,000.00 | 4.17% |
The same HK$50,000 deduction has a higher ratio for lower incomes, but higher-income taxpayers at a 17% marginal rate save more in absolute tax.
Case Studies
Case 1: Lower taxable income via deductions
Mr Lee: gross income HK$600,000; deductions MPF HK$18,000, donation HK$20,000, self-education HK$10,000 = HK$48,000.
AGI = 600,000 − 48,000 = HK$552,000, deduction ratio 8.00%.
This HK$552,000 is the starting point for allowances and progressive rates. Keep donation receipts and education invoices to legally lower taxable income.
Case 2: Same deduction, different income
Ms Chan and Mr Wong both have HK$50,000 deductions. Ms Chan gross HK$400,000 → ratio 12.50%; Mr Wong gross HK$1,200,000 → ratio 4.17%.
Ms Chan's 'ratio effect' looks bigger, but Mr Wong's marginal rate is higher (17%), so HK$50,000 saves about HK$8,500 tax; Ms Chan saves less.
Conclusion: value deductions by actual tax saved at your marginal rate, not by the ratio to income.
FAQ
Does Hong Kong have an 'AGI' concept?
Hong Kong tax has no formal AGI term, but the logic is similar: subtract allowable deductions from total income to reach an amount close to 'assessable income'; after personal allowances you get net chargeable income for the progressive rates. This calculator illustrates that intermediate step using the AGI concept.
What common deductions are available in Hong Kong?
Common ones: mandatory MPF (cap HK$18,000), TVC and QDAP (combined cap HK$60,000), VHIS premiums, approved charitable donations (cap 35% of assessable income), self-education expenses (cap HK$100,000), home loan interest, and elderly residential care expenses.
What is the difference between deductions and allowances?
Deductions (MPF, donations, education) are subtracted from total income first to get net assessable income; allowances (basic, married, child) are then subtracted to get net chargeable income for the tax brackets. Both lower tax but at different steps.
Can deductions be claimed without limit?
No. Most have caps: MPF HK$18,000, self-education HK$100,000, TVC+QDAP HK$60,000, donations up to 35% of assessable income. This calculator does not auto-apply caps — enter qualifying amounts per IRD rules.
Why compute adjusted income first?
Tax is not on gross income but on income after deductions (then allowances). Computing adjusted income shows the true tax base and helps you plan which deductions to use to legally lower it.
Related Tools
References
This calculator's content is reviewed by our Licensed Tax Advisory team. Results are for reference only; please refer to the relevant authorities for the official figures.