Employee Insurance in Hong Kong

Types of Employee Insurance in Hong Kong

Employers in Hong Kong are required to provide various types of insurance to their employees, including:

Employees’ Compensation Insurance: Covers work-related injuries and occupational diseases. It is mandatory for all employers to obtain this insurance.

• Mandatory for Employer to purchase compensation insurance upon employment of employees covering liabilities for work related injuries.
• The Statutory coverage is dependent on the company’s total number of employees.

• ECI Insurance is purchased through brokers or insurance companies.
• Annual premium is based on total company salary, nature of industry, risk of job and previous claim records.
• After purchase, insurance certificate must be displayed along with business registration upon yearly renewal.

Medical Insurance: While not mandatory, many employers offer medical insurance as part of their benefits package to attract and retain talent.

• Companies will offer medical insurance such as clinic visits, hospitalisation and dental as a market practice.
• Medical/Insurance plans can range from local to international plans depending on seniority and company policy.
• Providing additional coverage for spouse and dependents is also a common market practice.
• Benefits: Group coverage is often more competitive to personal.

Life Insurance: Some employers provide life insurance to offer additional security to employees and their families.

Additional Pension Schemes

• Voluntary contribution
• Voluntary scheme is for companies to contribute additional pension to the employee on top of their MPF.  The option is applicable to the employee to match or as well as option for employees.
• The percentage of Voluntary Contribution are based on the company policy and ranges from 2.5% to 15% of employees’ basic salary.  The percentage scale is largely dependent on employees’ years of service, seniority and industry.
• The Benefits of voluntary pension allows employees to retrieve/withdraw set percentage of the employers’ voluntary contribution upon resignation.  This may exclude summary dismissal.
• By market practice, the formula for voluntary calculation is set at ‘Basic Salary x Voluntary Contribution % minus Mandatory Contribution = Voluntary Contribution’
  • Monthly Salary HK$35,000 x 10% = HK$3,500 – HK$1,500 (Capped Mandatory Amount) = HK$2,000

When an employee departs from the company, the employee may only be eligible to retrieve a certain percentage of the employers’ voluntary contribution.  This normally is based on a vesting scheme per employment tenure and can be set up along with the MPF or additional providers.

Rental Reimbursement Programme

The scheme allows the employee to structure the remuneration package to include rental reimbursement to further tax relief.

• Setup:

Employer require to implement a Rental Reimbursement Scheme Policy and application forms to Employee

• Eligibility

1. Employee must be renting an accommodation .
2. Can provide lease agreement with stamp duty and valid rental receipts to the employer.
3. As per company rental reimbursement policy requirement – normal practice is 40% of Basic Salary.

• Rental Value

The total rental value will be calculated from 4% , 8% or 10% (dependent on accommodation type) of the net income (After personal deduction).

There will be various factors where the Rental Reimbursement Scheme may not benefit significant to the employee such as:

• Total income
• Rental amount
• Percentage of deduction amount

Statutory Requirements

Under the Employees’ Compensation Ordinance, employers must:

Obtain Employees’ Compensation Insurance: This insurance must cover all employees, including part-time and temporary workers.

Report Accidents Promptly: Employers must report work-related accidents to the Labour Department within 14 days.

Provide Compensation: Employees who suffer work-related injuries or occupational diseases are entitled to compensation for medical expenses, lost wages, and permanent disability.

Best Practices for Employers

To ensure effective management of employee insurance, employers should:

Select Reputable Insurance Providers: Partner with reliable insurance companies to offer high-quality coverage.

Communicate Benefits Clearly: Inform employees about the insurance benefits available to them and how to utilize these benefits.

Regularly Review and Update Policies: Periodically assess insurance policies to ensure they meet the changing needs of employees and comply with legal requirements.

Importance of Employee Insurance

Providing employee insurance is important for several reasons:

Employee Well-being: Insurance coverage helps employees manage health risks and medical expenses, leading to improved well-being and job satisfaction.

Attracting and Retaining Talent: Comprehensive insurance benefits are a key factor in attracting and retaining skilled employees.

Legal Compliance: Adhering to statutory insurance requirements helps employers avoid legal issues and penalties.

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of Hong Kong employment laws and regulations, please visit the official governmental websites.

Updated on: September 2025