Yes, the Salaries Tax demand note for you would consist of two components:

2004/05 Salaries Tax
2005/06 Provisional Salaries Tax
Total Salaries Tax payable
$280
$14,800
$15,080

Calculation of "PST" (the short form for "Provisional Salaries Tax") for 2005/06 is based on the income for 2004/05, but grossed up to 12 months, as follows:

Year of Assessment 2005/06 (i.e. 1/4/2005 ¡V 31/3/2006)
HK$

Income ($20,000 x 12)
240,000

Less: MPF contributions ($1,000 x 12)
(12,000)

Net Total Income:
228,000

Less: Basic allowance
(100,000)

Net Chargeable Income:
128,000

PST at progressive rate on $128,000

¡V First $30,000 x 2%
600

¡V next $30,000 x 8%
2400

¡V next $30,000 x 14%
4,200

¡V Balance $38,000 x 20%
7,600

14,800

PST at standard rate $228,000 x 16%
36,480

PST payable (the smaller amount)
14,800

My total tax bill is $15,080 ($280 + $14,800). When do I pay? Do I pay by two installments?

Normally you would be asked to pay the sum of $15,080 ($280 + $14,800) by 2 installments as follows:

Amount payable
Due date

1st installment $11,380 ($280 + $14,800 x 75%)
around Jan. 2006

2nd installment $3,700 ($14,800 x 25%)
around April 2006

By 1 January 2006 you would have earned income for 9 months from 1 April 2005 to 31 December 2005 (75% of annual income). By 1 April 2006 you would have earned income for the 12 months to 31 March 2006. Assuming that there is no change on your monthly income on year 2005/06 (comparing with the previous year), paying provisional tax is actually not paying tax in advance, nor paying tax on future income.