Tranche 2 of Hong Kong’s Employment Support Scheme (ESS)
The first tranche of wage subsidies ends in August 2020, and application for the second tranche will open from the 31st August 2020 till the 13th September 2020.
A total of 168,799 applications were received for the first tranche, and 88% of applications (148,500) were approved. For the 11% of rejected applications, the reason was mainly based on:
- Without Eligible MPF Accounts – Accounts set up on or after 1st April 2020 or terminated before 31st March 2020
- Zero Wage Subsidy – Employers made no MPF contributions for employees in the “specified month”
- Incomplete or Inaccurate Information
To help businesses through the application process and reduce the risk of rejection, we have compiled a summary of the information you need to know for the 2nd tranche of the ESS.
Important Information for the 2nd Tranche
The Hong Kong Government announced the eligibility, application procedures, timeline, and the calculation method of the second tranche on the 19th August 2020:
- has been making MPF (Mandatory Provident Fund) mandatory contributions for employees aged between 18 and 64,
- has been participating MPF Scheme in respect of employees aged 65 or above, or
- has set up an ORSO scheme (occupational retirement scheme) for its employees
Note: Does not include employers who are part of the Hong Kong Government or statutory bodies or subvented organisations.
The 2nd tranche subsidy covers from September to November 2020 (3 months of subsidy).
Payment of the Subsidy
The subsidy will be paid to an eligible employer within three to four weeks after the employer applies. You will receive emails directly from the government, similar to the 1st tranche application process.
Eligible employers applying for the 2nd tranche of the subsidy can select any month between December 2019 and March 2020 as the ‘specified month’. The government will use the number of employees and their respective relevant income for MPF or Voluntary Contribution in the ‘specified month’ to determine the amount of subsidy payable to the company.
- For employees aged between 18 and 64, the amount of the subsidy will be based on 50% of the actual relevant income for MPF Contribution of the employee in a ‘specified month’, capped at HK$18,000. The maximum amount of subsidy is therefore HK$9000 per month per employee.
- For employees age 65 or above are also eligible, the requirement and amount of the subsidy will be based on the below.
- If information of the age 65 or above employee is shown on the employer’s MPF record certificate, the amount of wage subsidies will be calculated based on 50% of the wages actually paid to the relevant employees in the “specified month”, wage capped at $18,000 per month per employee. The maximum wage subsidy per employee is $9,000 per month.
- If the employee (but not their wages nor MPF contributions made for them by the employers) is shown on the employer’s MPF record certificate, the amount of wage subsidies will be calculated based on the number of such employees aged 65 or above engaged in the “specified month”, with a subsidy of $5,000 per employee per month.
- Actual Voluntary contribution times 10, capped at HK$9000 per month per employee.
- If the amount of wage subsidy for any of the employees aged 65 or above calculated based wages or voluntary contributions on the employer’s MPF record certificate is below $5,000 per month, the employers may receive a wage subsidy of $5,000 for each of such employees per month.
- For eligible employers who have made MPF contributions and voluntary contributions for both employees aged between 18 and 64 and employees aged 65 or above, they must choose the same ‘specified month’ for calculating the subsidy.
An HKSARG portal (www.ess.gov.hk/en/) will be set up for online application for 2nd tranche ESS which will be in operation from 31 August 2020 to 13 September 2020. Please submit the ESS application form via the HKSARG portal during the said application period.
- For those who applied ESS in 1st tranche:
- Application number, password & contact person mobile number in 1st tranche are applicable to logon for 2nd tranche application. All 1st tranche information will be shown after login.
- If the chosen “specified month” is the same as the 1st tranche, the employer does not need to input the MPF scheme related information or upload the documents again.
- If the chosen “specified month” is different from 1st tranche, the employer should follow the instructions in the online application form to upload documents and/or update the information
- Bank account information is not allowed to change in 2nd tranche. If the employer needs to amend the information of the bank account information due to special circumstances, they should login to the ESS Portal according to the instructions in the online application form, and upload the relevant bank statement or other related supporting documents for verification and follow up.
Information and Supporting Document
Your company Business Registration information, MPF scheme information and latest company bank statement (Must contain Company Name and Bank Account Number)
|2nd Tranche (Portion)||Key dates|
|MPF accounts set up:||On or before 31 March 2020|
|Application opens:||31 August 2020 to 13 September 2020|
|Specified month:||Any one month from December 2019 to March 2020|
|Reference month of headcount check:||31 March 2020|
|Payment date:||October or after (Depends on Government’s release)|
Employer Commitments & Obligations
An eligible employer who applies for and receives the subsidy will be required to give two commitments:
- not to make any redundancies during the period of the subsidy, and
- to spend all the subsidy received on paying wages to its employees. The employer may not use the subsidy for any other purpose, including paying non-cash benefits to employees.
- The government will claw back the unspent balance of the subsidy if the employer fails to use all the subsidy received for a particular month to pay wages for that month.
Furthermore, if the number of employees on the payroll in any one month of the subsidy period is less than the number of paid or unpaid employees in March 2020, the employer will have to pay a penalty to the government.
Also, if the employer fails to use all subsidies received for a particular month to pay the wages, the Government will claw back the unspent balance of the subsidy for that month, the details are as following
Note: For those who applied ESS in 1st tranche but failed to use all subsidy received towards employees’ wages/number of employees in a particular month less than Mar 2020 may be subject to penalty directly from the 2nd tranche subsidy.
*Reminder that all employers who have applied for the first tranche of wage subsidies (whether the application is successful or not) must submit a new application.
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