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Employment and Payroll Guide for Hong Kong

Hong Kong is a dynamic business hub with specific employment and payroll regulations. Understanding these rules is crucial for companies looking to operate efficiently and compliantly.

Employer Contributions

Employers in Hong Kong are required to contribute 5% of an employee's salary to the Mandatory Provident Fund (MPF) on salaries up to HK$30,000 per month. Additionally, employment insurance contributions may vary by industry.

Employee Contributions and Taxes

Employees also contribute 5% to the MPF for salaries between HK$7,000 and HK$30,000 monthly. The income tax rates are progressive, ranging from 2% to 17%, depending on the annual income.

Minimum Wage and Payroll Cycle

The minimum hourly wage is HK$40. The payroll cycle is monthly, with payments typically made on the last working day of the month. It is customary to pay a 13th-month salary either before the Chinese Lunar New Year or at the end of the year.

Working Hours and Overtime

Standard working hours are from 9 am to 6 pm, Monday to Friday. There are no legal maximum working hours except for young workers in industrial settings. Overtime policies are generally specified in employment contracts or collective agreements.

Leave Entitlements

  • Annual Leave: Employees are entitled to 7 days of paid annual leave after 12 months of employment, increasing by one day per year up to a maximum of 14 days.

  • Public Holidays: There are currently 13 statutory holidays, which will increase to 17 by 2030.

  • Sick Leave: Employees accrue 2 paid sick days per month during the first year, increasing to 4 days per month thereafter, up to a maximum of 120 days. Sick pay is calculated at 80% of average daily earnings.

Termination and Severance

Employers must provide notice or payment in lieu of notice for termination. Severance pay is due if an employee is dismissed for redundancy and has at least 2 years of service.


Can Woodburn help you?

 

Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.


Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.

 

Talk to an expert


Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.

Topics we can advise on include:

  • Company Registration

  • Cloud Accounting & Financial Reporting

  • Cloud Payroll Services

  • Tax & Audit Services

  • Recruitment

  • Employer-of-Record

  • Visa Application

  • Trademark Registration

  • Switch to Woodburn

  • Partner with Woodburn (cross referral) 

Our calls are automatically scheduled via Zoom - or via Teams, WeChat or WhatsApp upon direct request. 

Our advisory calls are available from Monday-Friday from 8am to 5pm CEST and Wednesday until 9pm CEST.

 



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Woodburn Accountants & Advisors is one of China and Hong Kong’s
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