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.
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.
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
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
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.
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