Salary Tax

The about answer may not 100% right.

The basic logic is whether the given of traffic allowance is to compensate the staff expense in travelling while assuming duty in the course of employment. If the traffic expense is incurred for the purpose of performing duty, it is non-taxable. The most common case is air-ticket. The case is easlier to explain to IRD in case the travelling allowance is on actual expense claim basis. In case the allowance is not in cash but in provision of vehicle, it should be clear tha no tax should be charged.

If the traffic allowance is paid on fixed amount monthly basis, IRD is used to charged to charge you first. Nevertheless you may still still argue to claim for tax free if you are engage in a job that require very frequent travel and it is very difficult for you to claim travelling expense on actual basis. For example you are a General Manager of a property managment responsible for a hundred site throughout the territorry, the company may then pay your travelling expense on a monthly basis on a fixed amount to simplified the administration. This is exactly the case of my company. Yet you may required to present some supporting or an estimation of travelling expense to claim for tax free.

local travelling is not subject to Hong Kong Salaries tax whereas the holiday passage allowance is subject to Hong Kong Salaries tax!

According to the tax law, all the allowance provided by company are taxable.