Payroll and Benefits Guide Hong Kong

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

General

The hourly minimum wage is 40 HKD.

Payroll Cycle

The payroll cycle in Hong Kong is monthly, with payments usually being made on the last working day of the month.

13th Salary

In Hong Kong, it is customary to pay a 13th salary during the Lunar New Year or at the end of the year.

General

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

Overtime regulations are not set out in law; the company policy is usually stated in either the employment contract or Collective Bargaining Agreement.

Working Week

Monday–Saturday

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

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).

Sick Days

Termination Process

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 Period

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.

Severance Pay

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.

Probation Period

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.

VISA

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.

General

The standard rate of VAT in Hong Kong is 0%.