VHIS is more than tax deductions, be mindful of the calculation and get insured wisely

HONG KONG SAR - Media OutReach - 13 March 2023 - Voluntary Health Insurance Scheme (VHIS) policyholders are eligible to claim up to HK$8,000 for tax deduction. If we use a tax rate of 17% for calculation, the total tax deduction exceeds HK$1,300. However, many policyholders focus on saving the most tax, but neglecting the actual premium paid, and end up saving less money.

VHIS Tax Deduction Claimable Limit & Calculation

Each policyholder and taxpayer can claim up to HK$8,000 of VHIS premium for tax deduction. If the annual VHIS premium exceeds this amount, only HK$8,000 can be claimed.

The tax deduction amount is calculated as below -

VHIS premium paid during the assessment year
X Tax Rate
= Actual Tax Deduction Amount
(Tax Deduction Claimable Limit )
X 17%
(Assuming the Tax Rate is 17%*)
= HK$1,360
*The tax rate varies between policyholders, depending on the salary.

Many may think choosing a VHIS with higher premium allows them to enjoy higher tax deduction, and save more money. However, it is not the case.

Instead of saving tax, you spend more for a more expensive VHIS plan with similar Protection

Formula shows policyholders could enjoy higher tax deduction with more expensive plans.

However, Bowtie's calculations show that the most cost-effective way is to purchase a Voluntary Health Insurance Scheme (VHIS) Policy with a lower premium but adequate protection.

Case 1: Purchase a more expensive VHIS plan^ Case 2: Purchase a more affordable VHIS plan^
Tax Deduction Claimable Limit
Tax Deduction Amount
Assuming the Tax Rate is 17%*
HK$8,000 x 17%
= HK$1,360
HK$3,372 x 17%
= HK$607
Yearly Expenses
Actual Paid Premium - Tax Deduction Amount
HK$8,000 – HK$1,360
= HK$6,640
HK$3,372 – HK$607
*The tax rate varies between policyholders, depending on the salary.
^ VHIS with similar protection

From the yearly expenses, we could see case 2 saved two times more money than case 1.

Most money is saved when the family member with the highest income applies for the tax deduction as the Policyholder

Higher the income, higher the tax rate. If the family member with the highest income purchases VHIS for the whole family, and applies for tax deduction, most money will be saved.

Bowtie will demonstrate the internal calculations with an example from Case 2.

Case 2
Case 2 - Family Member a
Case 2 - Family Member b
Case 2 - Family Member c
Tax Deduction Claimable Limit
Tax Deduction Amount
Assuming the Tax Rate is 17%*
HK$3,372 x 17%
= HK$607
HK$4,476 x 17%
= HK$761
HK$1,920 x 17%
= HK$326
HK$2,196 x 17%
= HK$373
Yearly Expenses
Actual Paid Premium - Tax Deduction Amount
HK$3,372 - HK$607
= HK$2,765
HK$4,476 - HK$761
= HK$3,715
HK$1,920 - HK$326
= HK$1,594
HK$2,196 - HK$373
= HK$1,823
*The tax rate varies between policyholders, depending on the salary.

From the above demonstration, we could see that if one member of the family purchased VHIS for the other three members, they could save HK$1,460 more tax than before (versus saving only HK$607 for one member).

Last Tip - The most "money-saving" way is to...

The family member with the highest salary should purchase VHIS for the entire family and claim for tax deduction. Then, when choosing a plan, choose a plan with similar protection but a lower premium.

Hashtag: #Bowtie #vhis #insurance

The issuer is solely responsible for the content of this announcement.
About Bowtie
About Bowtie
The Bowtie Life Insurance Company Limited is an authorised life insurance company and Hong Kong's very first virtual insurer approved under the Fast Track pilot scheme. Through the use of modern technology and medical expertise, Bowtie offers a commission-free convenient online platform for customers to quote, apply and claim for health insurance plans certified by the Health Bureau under the Voluntary Health Insurance Scheme (VHIS).

In addition, Bowtie has also gone into everyday life by creating the One-stop Primary Care Centre and the Asian Health Hub . Bowtie is backed by Sun Life Financial, Mitsui & Co., Ltd and supported by leading international reinsurers.

Stay up to date at .

Bowtie Life Insurance Company Limited




13 Mar 2023

Past Press Releases


Talk to Media OutReach Newswire today