Links Onboard – Latest APAC Tax, Payroll & Labour Law Updates
Below is the latest issue of Onboard, a quarterly update by Links. Our legislation update covers major tax, labour law, payroll and visa developments across Asia. It is designed to get you updated at-a-glance.
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Want a more in-depth look the legislation by each location? Check out our location legislation summary page for more!
- Hong Kong
- South Korea
- New Zealand
Five-day Statutory Paternity Leave
This January, an amendment was made to the Hong Kong Employment Ordinance 2018 increasing statutory paternity leave for male employees from 3 days to 5 days.
Employees looking to take the leave will need to notify his employer:
- at least 3 months prior to the expected dates of delivery; and
- Intended date of his leave
Updates on Statutory Minimum Wage
Starting from 1 May 2019, the Statutory Minimum Wage was raised to $37.5 per hour.
The monetary cap is also raised to $15,300 per month. For employees receiving lower than $15,300 per month, employers will be required to record the total number of hours worked said employee.
Tax Deductible Voluntary Contributions (TVC)
As of 1 April 2019, legislation was passed to provide tax incentives for scheme members to make tax deductible voluntary contributions as a way to encourage the public to save in advance for retirement.
Voluntary Health Insurance Scheme
From 1 April 2019, people who purchase eligible health insurance products for themselves or their specified relatives under the Voluntary Health Insurance Scheme (VHIS) will be eligible for tax deduction.
Special Salaries Tax Exemption Allowance
Anyone aged over 65 or above or with permanent disability level of 60% or above working part-time or full-time, the exemption allowance is adjusted to MOP$198,000.
Blue Card Holders to Receive 50% Reduction Applicable to Manufacturing Industry
According to the Macau Social Security Fund department, blue card holders who are in the ‘manufacturing’ industry may receive a 50% reduction on the employment fee.
This means MOP100 per month for each non-resident worker for employers engaged in processing and manufacturing industries, instead of the MOP200. Employment fee is to be paid fully by the employer.
Tax Residency in Mainland China
Amendments were made to the PRC Individual Income Tax Law. Taking effect from 1st January 2019, it does not affect the 183-rule.
Amendments are made specifically regarding the classification of individuals, introducing the concept of PRC tax resident, providing guidance and conditions for non-domiciled individuals.
China Unveils Special Individual Income Tax Deductions
Special individual income tax deductions was announced late last year by the State Council, lowering the tax burden for those with certain expenditures.
The expenditures covers six areas including children’s education, continuing education, health treatment for serious diseases, housing loan interests, rent and elderly care.
Special individual tax deductions took effect alongside the amended personal individual income tax law on 1 January 2019.
Increase on Monthly Basic Wage & Ordinary Insurance
Taking effect on the 1st January, 2019, the monthly basic was adjusted from NT$22,000 to NT$23,100. The premium rate of Ordinary Insurance under the Labor Insurance system for the individuals insured through occupational unions or fishermen’s associations is adjusted from 0.5% to 10%.
Adjustments were also made to the “Labor Insurance – Table of Grades of Insurance Salary”, those whose insurance salary is lower than the Grade 1 insurance salary of the “Labor Insurance – Table of Grades of Insurance Salary”, the Bureau of Labor Insurance will proactively adjust the amount to NT$23,100
Monthly Contribution Wages Classification of Labour Pension
The “Monthly Contribution Wages Classification of Labor Pension” was amended according to the increase in the monthly basic wage. Monthly contributions that are currently lower than the amount of NT$23,100 will progressively be increased by the Bureau of Labour Insurance.
Extension on Core Provisions
Previously, core provisions had a monthly basic salary threshold of $4,500 for manager and executives. As of 1st April, 2019, this threshold in core provisions was removed covering all employees.
This amendment will not include seafarers, domestic workers, and public servants, who will be covered under a separate coverage by other Acts and regulations.
The salary threshold for non-workmen to qualify as Part IV employees will also be raised from $2,500 to $2,600.
Singapore 2019 Tax Change Overview
The Minister of Finance announced various tax changes in his Budget Statement for the Financial Year 2019. These changes were made for different areas including for: Individuals; all businesses; goods and services; property; financial sector.
Here are some of the key changes:
Tax Changes for Individuals- Bicentennial Bonus
A Personal Income Tax Rebate of 50% of tax payable will be granted to all tax resident individuals for 2019 Year of Assessment as part of the Bicentennial Bonus. The maximum rebates is capped at $200 per taxpayer.
Tax Changes for Businesses
Lapse in Designated Unit Trust scheme
The Designated Unit Trust(“DUT”) scheme will lapse after 31 March 2019. Tax deferral benefits under the DUT scheme will continue on and after 1 April 2019, for DUTs that meet all the conditions.
Lapse in Approved Unit Trust scheme
The tax incentive of Approved Unit Trust (“AUT”) scheme will lapse after 18 February 2019. For a period of five years, from Year of Assessment 2020 to 2024, existing AUTs will continue to receive the tax concessions under the AUT scheme.
Goods & Services- Tightening of GST Import Relief
There will be a tightening of GST import relief for travellers. Instead of the $150, Travellers spending less than 48 hours outside Singapore will get GST import relief for the first $100 value of goods bought overseas.
For travellers spending at least 48 hours outside of Singapore, the GST import relief was changed from $600 to $500m, effective as of 19 February 2019.
New Regional Minimum Wages in 2019
Starting 1 January, 2019, there has been an increase in the regional minimum wages.
- For enterprises located in region I: VND 4,180,000/month.
- For enterprises located in region II: VND 3,710,000/month.
- For enterprises located in region III: VND 3,250,000/month.
- For enterprises located in region IV: VND 2,920,000/month.
In July, the minimum basic wage will also see an increase from 1,390,000 VND to 1,490,000 VND per month.
Major Amendments to the Labour Protection Act
Passing on December 13, 2018, Thailand’s National Legislative Assembly launched a series of amendments to the Labour Protection Act (LPA). The new act and amendments will take effect 30 days after publication in April 5, 2019- i.e. May 5, 2019.
Major amendments will include changes to the following:
Increase in the Maximum Severance Pay by 33%
Prior to the change, the maximum statutory severance pay was capped, equating to 300 days of wages for employees who have served an uninterrupted period of 10 years or more. With the amendment, the maximum severance pay will have a new calculation for employees with 20+ years of service, capping the severance pay at 400 day of wages (at the employees latest wage rate)
Increase in Maternity Leave
Adding eight days to the maternity leave, pregnant employees are now entitled to a total of 98 days of maternity leave. During this period, the employer must also pay up to 45 days wages.
Mandatory Paid Leave
Updating from the more ambiguous work rules regarding paid leave, the amendment now mandates that employers must grand employees at least three days of paid necessary business leave per year.
Other amendments to the Labour Protection Act includes:
- Workplace relocation notice
- Employer change consent
- Wages payable during business suspension
- Advance notice & pay for payment in lieu
- Equal rates and benefits regardless of gender
Retirement Age to Reach 65
Effective on January 1, 2019, the Indonesia’s official retirement age is now 57 year old. The amendment towards the retirement age is made every three years, increasing by one year until it reaches 65.
Application of Provincial Minimum Wage
Effective as of January 1, 2019, employees with less than 1 year’s service are entitled to the Provincial minimum wage. Employees who have served over 1 year must be paid more than the minimum wage.
Minimum Wage Increase in Jakarta
Jakarta increased their monthly minimum wage from IDR 3.65million to IDR 3.9million. This took effect on January 1, 2019, and is applicable to employees with less than 1 year’s service.
Major Labour Law Updates to Come in 2019
Cambodia is getting a long overdue update to it’s labour laws this 2019. Taking on pro-employee initiatives, the Cambodia’s labour law is seeing the most significant changes its 22-year history.
Major amendments include:
- Seniority Payments
- Severance Payments
- Bimonthly Salary payments
- Pension Scheme for Private Sector
Improved Maternity Leave Arrangements
Maternity leave is increased from 60 or 78 days to 105 days with new amendments.
An additional 15 days of paid maternity leave is granted to solo parents. Eligible employees also have the option to extend their maternity leave by up to 30 days without pay.
Legislation to Increase Annual Leave Uptake
In hopes to combat the overworked culture in Japan, new legislation regarding annual leave uptake is being launched. Made effective in April 2019, employees are required by law to take at least five days of annual leave is they have more than 10 days of unused annual leave. All this is implemented as a way to increase the rate of annual leave taken at 51.1%.
Maximum Limit of Overtime Work
Large employers (corporations with over 50 employees) art tasked to lead to movement towards better work life balance. Starting April 2019, Japan has placed a cap on the maximum hours of overtime work. According to the Basic Limit Rule, working hours exceeding the 8 hours per day or 40 hours per week, cannot be over 45 hours per month (exceptions apply).
New overtime work limit will be enforced for small employers in 2020.
All Employees Under Time Tracking Requirement
Having taken effect on 1 April, 2019, the time tracking requirement now encompasses all employees without exception, different from the previous requirement of tracking working time of only non-exempt employees in Japan as a way to protect each employee.
Blue Collar Visa
Effective since April 1 2019, a new visa category for “Designated Skills” (including blue collar workers) was made available as an effort to support the aging workforce in Japan.
Termination Notice Exemption
Amendments to the Labour Standards Act unified the standard termination notice exemption. Executed after 15 January 2019, employers may be exempt from the termination notice requirement (ie. 30 days’ notice or payment in lieu thereof) where the employee’s continuous service period is shorter than three months.
Family & Domestic Violence Leave
The Fair Work Amendment Act 2018 took effect on the 12 December 2018 and applies to all employees including part-time and casual employees.
The Fair Work Act 2009 now includes an entitlement of 5 days unpaid family and domestic violence leave as part of the National Employment Standards (NES).
Single Touch Payroll Update
Initially launched on the 1 July 2018, applying to employers who have 20 or more employees, starting in 1 July 2019, smaller employers will also have to use the Single Touch Payroll reporting system.
Changes in Employment Relations Amendment Act 2018
Starting 6 may 2019, employer are allowed to set rest and meal breaks. Two 10 minute rest breaks (paid), and one 30 minute meal break (unpaid) must be included in an eight hour work day. For four hour work day, employers must include one 10 minute rest break (paid)
The new Employment Relations Amendment Act also restricts business with less than 20 employees to have 90 day trials, while it is still acceptable for businesses with more than 20 employees to have a probationary period of 90 days.
NZ Now Using Payday Filing
In place since 2018, it is now mandatory for all New Zealand businesses to use the new Payday filing system. Made mandatory on the 1 April 2019, filing of PAYE information with the Inland Revenue needs to be made every payday by New Zealand employers.
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