Can I Claim Training and Staff Development as a Business Expense in Hong Kong?
Yes. Staff training and development costs are fully deductible. Director self-education expenses are deductible if directly related to existing skills required by the current trade.
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What Inland Revenue Department (IRD) says
Section 16 allows deduction of training costs incurred wholly and exclusively to improve the skills of employees engaged in the trade. The IRD accepts external course fees, training materials, and professional development costs for staff and directors as deductible expenses. Director self-education is treated under both Profits Tax (as a business expense) and as a Salaries Tax deduction for the individual, with the latter capped at HKD 100,000 per year. For an employee, the Salaries Tax self-education deduction covers fees for approved courses directly related to the current job, up to HKD 100,000 a year. The company deduction and the employee's deduction are separate, and if the company pays the fee, the employee cannot also claim it. The employee's course must be at a recognised institution or a course on the approved lists.
When you can claim
- External training courses and workshops for employees (e.g., professional certification courses)
- Professional development conferences and seminars directly relevant to the business
- Technical training for software or equipment used in the business
- Online learning subscriptions used by employees for job-related skills (Coursera, LinkedIn Learning, etc.)
- Director study for a qualification directly required by the current role
- Fees for a professional body annual membership relevant to the business
When you cannot claim
- Education courses for skills unrelated to the current trade or profession (e.g., a tech company funding a director's art degree)
- Initial qualifications that are a precondition for entering a new profession (capital in nature)
- Personal development courses with no clear link to the current business activity
- Language or hobby courses for staff that are unrelated to their duties
Good to know
Pro tip: Employees can also claim a Salaries Tax deduction for their own self-education expenses up to HKD 100,000 per year. This applies to courses directly related to their current employment. Keep enrollment confirmation, receipts, and evidence of how the course relates to the employee's job role in case of IRD review.
Important: Training for the director in a skill that the business already uses is a normal business cost, while a degree that qualifies the person for a different profession is capital in nature. A written training record showing the course content and the link to the job protects the claim.
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