Payroll and Benefits Guide Hong Kong
Last updated: May 09, 2023
Employer Payroll Contributions
Mandatory Provident Fund (MPF) (The maximum level of monthly income for contribution purposes is HK$ 30,000; mandatory contributions are capped at HK$ 1,500 for employees earning above HK$ 30,000).
Up to 2.00%
Employment Insurance – the rate varies depending on the industry.
Total Employment Cost
Employee Payroll Contributions
Provident Fund (MPF) (The maximum level of monthly income for contribution purposes is HK$ 7,000.00 to 30,000; mandatory contributions are capped at HK$ 1,500 for employees earning above HK$ 30,000).
Total Employee Cost
Employee Income Tax
Up to 50,000.00 HKD
50,001.00 HKD – 100,000.00 HKD
100,001.00 HKD – 150,000.00 HKD
150,00.00 HKD – 200,000.00 HKD
200,001.00 HKD and over
The hourly minimum wage is 40 HKD.
MINIMUM WAGE (PER MONTH)
The payroll cycle in Hong Kong is monthly, with payments usually being made on the last working day of the month.
In Hong Kong, it is customary to pay a 13th salary during the Lunar New Year or at the end of the year.
Working hours are typically 9 am to 6 pm Monday to Friday, however, there are no legislative requirements or limits on the maximum working hours except for a young person (age 15 to 18) in industrial settings who is limited to an 8 hour working day between the hours of 7 am to 7 pm with a maximum of 48 hours per week.
Overtime regulations are not set out in law; the company policy is usually stated in either the employment contract or Collective Bargaining Agreement.
Paid Time Off
Employees who have been employed for at least 12 months are entitled to 7 days of paid annual leave. This increases by one day per additional year of employment until the total annual leave entitlement of 14 days is reached in the 9th year of employment.
Public holidays that fall on a Sunday are moved to a weekday as a day off in lieu. Public holidays that fall on a Saturday are usually lost.
The number of statutory holidays under the employment ordinance will increase from 12 days to 17 days by 2030, with one additional statutory holiday added every 2 years.
The 4 new statutory holidays will be:
- The first weekday after Christmas Day (starting from 1 January 2024)
- Easter Monday (starting from 1 January 2026)
- Good Friday (starting from 1 January 2028)
- The day following Good Friday (starting from 1 January 2030).
During the first 12 months of employment employees accrue 2 paid sick days per month, increasing to 4 paid sick days per month after reaching one year of service, up to a maximum of 120 paid sickness days.
Sick pay is calculated at 80% of the average daily earnings earnt in the preceding 12-month period, prior to the first day of sickness. For employees with less than 12 months service, the calculation is based on the average earnings received since the employment start date.
A medical certiﬁcate must be issued by a medical practitioner or registered dentist as proof of any sickness day the worker is claiming.
A pregnant employee who has been employed under a continuous contract for at least 40 weeks immediately before the commencement of scheduled maternity leave is entitled to 14 weeks of paid maternity leave. An additional 14 week so leave might be available for cases of complicated or multiple births . Maternity leave should commence between two to four weeks before the due date.
The employer pays the maternity leave period based on a calculation of four-fifths of their average daily wages earned in the 12-month period preceding the first day of the maternity leave (for those with less than 12 months service the shorter calculation period will be used). The 11 t0 14 weeks of maternity leave is capped at 80,000 HKD and the employer can apply to the Government for reimbursement of these 4 weeks.
Male employees are entitled to 5 days of paternity leave providing they have been employed under a continuous contract for no less than 40 weeks before the first day of Paternity leave. Leave may be taken in one go or on separate days, within the period of four weeks prior to the expected date of delivery and 10 weeks following the actual birth of the child.
Paternity pay is at a rate of four-fifths of the average daily wages earned in the 12-month period preceding the first day of paternity leave (for those with less than 12 months service the shorter calculation period will be used).
Advance notice must be given before taking paternity leave. Where at least 3 months notice before the expected date of delivery has been given the father may take paternity leave immediately after informing his employer of the actual leave dates. However, if 3 months advance notice was not given, the employee must notify the employer of his dates of paternity leave at least 5 days before taking leave.
There is no additional statutory parental leave in Hong Kong.
There is no additional statutory other leave e.g. Marriage or Bereavement in Hong Kong, though some companies choose to create their own policy.
Under the Employment Ordinance, a list of valid termination reasons are provided including the conduct of the employee, the capability or qualifications of the employee to perform their job, redundancy and any other reason of substance which in the opinion of the court or the Labour Tribunal would be sufficient cause to warrant the dismissal of the employee or a variation to the terms of that contract of employment.
Notice periods within Hong Kong are generally 30 days, although employers can specify longer notice periods within the employment contract.
During the probation period, no notice needs to be given by the employer or worker in order to terminate.
Statutory severance payment is payable to redundant employees with continuous service for 2 years or more. Calculated using a base amount per year of service or 2/3 of the employee’s last full month’s wages (being the monthly average of the wages earned by the employee during the previous 12 months – or a shorter period where the employee has been employed for less than 12 months – or 2/3 of HKD22,500, whichever is less). Total severance payment is capped at HKD 390,000.
Employers are entitled to offset liability to pay a severance payment, any gratuity, or retirement scheme payment that has been made to the employee in respect to any years of service for which the severance payment is payable.
For the purposes of a severance payment, there is a statutory presumption that the termination arose by reason of redundancy. This presumption may only be rebutted by an employer who proves that the employment was terminated for reasons wholly unrelated to redundancy.
From May 2025, The Employment & Retirement Schemes Legislation (Offsetting Arrangement) will come into force, which seeks to abolish the arrangement that allows employers to offset Severance Payment/Long Service Payment against the employer’s mandatory Mandatory Provident Fund (MPF) contributions. Employers will still be able to offset these payments against the employer’s voluntary MPF contributions and gratuities. The arrangements under this bill will also apply to other occupational retirement schemes.
The probation period in Hong Kong for permanent employees is generally set between 1 week to 1 month. The exact length must be stipulated in the Employment Contract.
Foreign nationals normally require a visa before entering Hong Kong to take up employment. A local sponsor, usually the employing company, is required to support the employment visa application.
Under the existing immigration policy, a person seeking to enter Hong Kong for employment should possess a particular skill, knowledge, or value experience, which is not readily available in Hong Kong.
Applicants who wish to possess a working visa for Hong Kong need a graduate degree unless they are considerably experienced in a specialized field or have relevant experience in the position they are applying for.
If the person’s spouse and dependent family also decide to relocate to Hong Kong, they will require dependent visas. A spouse entering Hong Kong on a dependent visa can now take up employment in Hong Kong and no longer requires a separate employment visa if they wish to work in Hong Kong.
The standard rate of VAT in Hong Kong is 0%.
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Questions & Answers
Payroll and Benefits Guide
in Hong Kong
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
Public Holidays Calendar
|Sunday||Jan-1||New Year’s Day|
|Monday||Jan-2||New Year Holiday|
|Sunday||Jan-22||Lunar New Year||Any holidays that fall on a Sunday will be replaced the following Monday.|
|Monday||Jan-23||The Second Day of Lunar New Year||Any holidays that fall on a Sunday will be replaced the following Monday.|
|Tuesday||Jan-24||The Third Day of Lunar New Year|
|Wednesday||Jan-25||The Fourth Day of Lunar New Year|
|Wednesday||Apr-5||Ching Ming Festival|
|Friday||May-26||Birth of Buddha|
|Thursday||Jun-22||Tuen Ng Festival|
|Saturday||Jul-1||HKSAR Establishment Day||Any holidays that fall on a Sunday will be replaced the following Monday.|
|Saturday||Sep-30||The Day Following Mid-Autumn|
|Monday||Oct-2||National Day Holiday||Any holidays that fall on a Sunday will be replaced the following Monday.|
|Monday||Oct-23||Chung Yeung Festival|