Guide to Hiring in Hong Kong

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Guide to Hiring in Hong Kong

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Voted the world’s freest economy for consecutive years, Hong Kong is where ‘East meets West’ and is a great place to start a business in the Asia-Pacific region for numerous reasons – including tax benefits, ease of expansion, free market and business friendly law and policies.

Looking to expand or start a new venture in Hong Kong? Links International has compiled a guide for you that includes employment laws and best practices you are required to follow when operating a business in Hong Kong.

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.

Labour Law – Basics

What are the basic requirements for employers in Hong Kong?

  • Statutory Requirement
    • Compensation Insurance
      • It is mandatory for employer to purchase compensation insurance upon employment of employees covering liabilities for work-related injuries.
      • The Statutory coverage is dependent on the total number of employees a company has.
No. of employeesAmount of Insurance Cover per Event
Not more than 200Not less than HK$100 million
More than 200Not less than HK$200 million
      • The Employees’ Compensation Insurance (ECI) is usually purchased through brokers or insurance companies.
      • The annual premium is based on the total company salary, nature of industry, risk of job and previous claim records.
      • After purchase, insurance certificates will require to be displayed along with business registration upon yearly renewal.

 

    • Mandatory Provident Fund (MPF)
      • From December 1 2000, the Mandatory Provident Fund Plan (MPF) was established for companies to provide mandatory pension to employees including self-employed businesses.
      • There are 15 MPF providers in Hong Kong serviced by banks or insurance companies.
      • Employer MPF usually requires a 1-month timeline to set up.
      • Every company is required to enroll a full or part-time employee from age 18 – 65 within the first 60 days of employment to the MPF plan.
      • As of 1 May 2025, Hong Kong will abolish the Mandatory Provident Fund offsetting mechanism. Under this new provision, employers will no longer be able to deduct severance or long service payments from employees’ portion of MPF contributions. However, any accrued benefits derived from employers’ voluntary contributions (ERVC) or gratuities based on length of service can still be used to offset employees’ SP or LSP.
      • To assist employers with the transition, the government will introduce a 25-year subsidy scheme totalling HK$33.2 billion to support severance pay-outs.
      • To reduce the risk of large-scale dismissals before the transition date, a “grandfathering” arrangement will be put in place for the pre-transition portion of SP/LSP of employees who are already in employment before the transition date.
Pre-transition portion (Before 1 May 2025)Post transition portion (On or after 1 May 2025)
Offset from MPF employer portionYesNo
Subsidy from GovernmentNot ApplicableApplicable (Note: subsidy calculation will be
based on the Employer ratio confirmed by the Government)

 

    • Salaries Tax Filing and Period
      • Every company is required to register for Employer File Number with the Hong Kong Inland Revenue (IRD) for the purpose of regulatory tax filing.
      • Registration will require 1-2 months.
      • Financial Year End and Salaries Tax Rate
      • The Hong Kong Financial Year covers April 1st – March 31st.
      • The Personal Salary Tax Rate is between 2% – 17% (dependent on multiple personal factors).
      • Personal tax reporting is responsible by each respective individual.
      • This Salaries Tax Computation helps calculate the income tax estimation.
      • Regulatory tax filing and submission includes:
        • 56E – New Joiner
        • 56F – Departure from Company
        • 56G – Departure from Hong Kong. Special process involves withholding of final payment and IRD tax clearance with letter of release to the employer.
        • 56A/B – Annual Tax Filing of employees total renumeration

What are the different work permits and visas in Hong Kong?

Hong Kong is a FinTech hub, popular for professionals looking to grow their careers. Applicants who have an impressive educational background and carries skills, knowledge and experience of value usually stand out. The process time for each of these visas range from between 4 weeks – 6 weeks from the date of submission of application. Upon approval, the applicant has the right to abode in Hong Kong and will be required to then apply for a resident Hong Kong Identity card to live and work in the city.

General Employment Policy (GEP) / Admission Scheme for Mainland Talents and Professionals (ASMTP) / Change of Sponsorship:

Person is required to be admitted to or working in a valid managerial, executive, or specialized position qualifying the lack of local talent in Hong Kong.

  • Required Documents:
    • Applicants should complete application form ID 990A. The employing companies should complete application form ID 990B.
    • Other supporting documents required upon application can be found on the official governmental websites.

Top Tier Visa:

Person carrying total taxable income of HK$2M yearly receives approval for 6-year visa with continuation from a 2-year employment visa.

Dependent Visa:

Legally married spouse or unmarried children under the age of 18 of eligible visa holders or permanent residents of Hong Kong are entitled to a dependent visa.

  • Required Documents:
    • Applicant should complete Part A of application form ID 997, while Part B of the form should be completed by the sponsor.
    • Other supporting documents required upon application can be found on the official governmental websites.

Training Visa:

Designed for people required to enter Hong Kong for training in skills related to their field of work.

  • Required Documents:
    • Applicants should complete application form ID 992A. The sponsoring company should complete application form ID 992B.
    • Other supporting documents required upon application can be found on the official governmental websites.

Top Talent Pass Scheme:

Person who has graduated from the world’s top universities and high-income talent earners are eligible for the TTPS. They can enter Hong Kong without securing an offer of employment upon application.

  • Required Documents:
    • Other supporting documents required upon application can be found on the official governmental websites.
  • Effective June 2023, all applicants applying for the Top Talent Pass Scheme must declare their criminal records in their online application.
  • In the Hong Kong Policy Address 2023, Chief Executive, John Lee Ka-chiu announced that eight more educational institutions from Mainland China and overseas will be included in the roster of qualified universities, bringing the total number of institutions to 184.

 

Considerations for visa approval for each applicant include:

  • Good security clearance and no known record of serious crime
  • Good education background with proven professional capabilities and/or relevant experience
  • There is a genuine job vacancy (not required for the Top Talent Pass Scheme)
  • Confirmed offer of employment for a relevant job vacancy that is not easily filled by the local workforce (not required for the Top Talent Pass Scheme)
  • Reasonable remuneration package including income, accommodation, medical and other fringe benefits, in line with prevailing market level

 

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What to note for existing employees?

  • Benefits In Kind
    • Employers are not obligated to provide employees with medical insurance. However, in Hong Kong, it is common practice for companies to provide medical or private health insurance as a part of their employee package.
  • Share Options
    • Employees must pay salaries tax on any benefits associated with stock-based awards arising from your office or employment.
    • Both employees and their employer must observe the reporting requirements in the returns. Failure to do so may result in heavy penalties.

 

What to remember when hiring new employees?

Upon hiring new employee(s), the employer must report the personal details of the new employee(s), date of commencement and the terms of employment to the Inland Revenue Department (IRD) by filing form I.R.56E “Notice of Employee Commencement Form” within 3 months of the commencement date.

 

What are the different discrimination laws in Hong Kong?

The Hong Kong Bill of Rights Ordinance generally stipulates that all persons are equal before the law and the law shall prohibit any discrimination on any ground. This principle is materialized through the enactment of the following four ordinances:

      • Sex Discrimination Ordinance
      • Disability Discrimination Ordinance
      • Family Status Discrimination Ordinance
      • Race Discrimination Ordinance

 

What are the working hours in Hong Kong?

There are no legislative requirements on maximum working hours except in the case of a young person (over 15 but under 18 years of age) in industrial undertakings. Common practice involves 8 hours per day.

As highlighted in the Hong Kong Policy Address 2023, the Labour Advisory Board (LAB) intends to update the Continuous Contract (or “418”) requirement by shifting the calculation basis to the aggregate working hours over a four-week period, and this adjustment will subsequently be reflected in the Employment Ordinance.

 

What is the legal probation period in Hong Kong?

No provision in Hong Kong specifies a probation period, however, standard practice is to have a 1-3 month period.

 

What are the minimum wage requirements in Hong Kong?

Effective 1 May 2023, minimum wages in Hong Kong stand at HK$40 per hour. If an employee earns HK$16,300 or less per month, employers will need to keep records of the total number of hours worked by employees.

    • Record Keeping Required Includes:
      • Name and identity card number of the employee
      • Wage period and working hours
      • Wage paid in respect of each wage period
      • Periods of annual leave, sick leave, maternity leave, paternity leave and holidays entitled and taken, together with details of payments made in respect of such periods

 

  • Average Daily Wage:
    • The employment (Amendment) Ordinance 2007 – The purpose of this ordinance requires employer to calculate statutory entitlements below based on their 12-month Average Daily Wage (ADW).
      • The relevant statutory entitlements include payments for:
        • Statutory Holiday Pay
        • Annual Leave Pay
        • Sickness Allowance
        • Maternity Leave Pay
        • Paternity Leave Pay
        • End of Year Payment
        • Payment in Lieu of Notice

 

    • Average Daily Wage and Daily Wage Formula:

Example:

Total Annual Wages = HK$300,000*

Total Annual No Pay Deduction = HK$5,000

Total Annual of No Pay Leave = 4 days

Average Daily Wage = HK$300,000 – HK$5,000

365 days – 4 days

Average Daily Wage = HK$817.17

 

Read More: Top 5 Questions to Calculating Minimum Wage in Hong Kong

 

Termination of Employment – MPF, Tax, Severance Payment & Long Service Payment

Employment law in Hong Kong is employer friendly and termination of employment contracts is relatively straight forward.  During probation, no notice is required for termination of employment contract within the first month, and at least seven days’ notice thereafter unless the contract specifies more than this. If the employer contract does not specify notice, either party must give at least one month’s notice for termination.

Upon the termination of employment, the employer must report the personal particulars of the employee, expected date of termination and remuneration paid/deemed paid in the termination year to the IRD by filing form I.R.56F one month before the date of termination of employment.

In the case of an employee terminating employment to depart from Hong Kong,  employers have to file two copies of IR56G or via Electronic Filing of Employer’s Return one month before the expected date of departure.

From the date of filing IR56G and until such time the employee has made tax clearance and can produce to you a ”letter of release” issued by the IRD, you should withhold all amounts due to be paid to him (including salaries, commission, bonus, reimbursement of rent/expense, money or money’s worth included).

  • Departure of employee whether resignation or termination:
    • Record for Government:
      • MPF termination form
      • Inland Revenue (56F or 56G) form

 

  • Every employee’s Final Payment Calculation should include:
    • Salaries and applicable pay/deduction items
    • Unused Leave balance
    • Notice in Lieu if required
    • If company do not require employee to serve notice, notice payment is required
    • If employees do not serve their notice, notice deduction is required.

 

  • Market Practice:
    • Companies usually set their notice period from 1 – 3 months of notice period depending on seniority and position.

 

  • If the employee has worked for the company for over 2 years or 5 years, the employee is required to receive either payment:
    • 2 years but less than 5 years = Severance Payment (SP)
      • Redundancy/Lay Off
    • 5-year employment or more = Long Service Payment (LSP)
      • Completion of fixed term employment contract
      • Resigned due to ill health.
      • The employee, aged 65 or above, resigns on ground of old age.
    • Misconduct or Summary Dismissal will not be applicable to SP or LSP (Exclude Vaccination Dismissal)
    • Severance and Long severance Calculation
      • Last month wage x 2/3 (Capped at 15,000) x Years of Service
      • Maximum payment of SS and LSP is HK$390,000.
      • Either amount are non-taxable to the employee
    • MPF Offset
      • Employer can offset the payment from MPF Employer portion (Mandatory and Voluntary)
      • Can only offset the amount calculated by HK employment ordinance formula.

 

  • Market Practice:
    • Some employers may choose not to offset the severance amount from employees.

 

What is the retirement age in Hong Kong?

In Hong Kong, it is common practice to retire at the age of 65 years old. Since 2000, Hong Kong made it compulsory for employers and employees to contribute to the Mandatory Provident Fund (MPD) which applies to all jobs, including part-time. The MPF allows for full withdrawal upon reaching the retirement age of 65.

 

Employment dispute channels

Labour Relations Division offices.

 

Is employment insurance compulsory in Hong Kong?

Yes, the minimum insurance coverage should be no less than HKD$100 million for a company with less than 200 employees. Companies with more than 200 employees should have an insurance coverage with no less than HKD$200 million.

 

Labour Law - Leave

  • Eligibility:
    • Employee has worked for 18 hours per week for 4 consecutive weeks.
    • Employed for not less than 3 months.
    • Employees can take their annual leaves they have accumulated from the current year in the following year.
    • Any untaken annual leave requires encashment upon final payment

 

  • Entitlement as per Hong Kong Labour Ordinance:
    • Annual Leave ranges from 7-14 days dependent on year of services

 

  • Market Practice:
    • Most companies will allow employees to take their current annual leave after 3 months of employment. Typically, we see annual leave being offered from 12-25 days.
  • Eligibility:
    • Employee has worked for 18 hours per week for 4 consecutive weeks.
    • Must take 4 or more consecutive days of sick leave.
    • Must have doctor certificate stating the number of days required.
    • Must have accumulated sufficient entitlement from the “120 days”.

 

  • Entitlement accumulation:
    • Entitled to earn 2 days upon completion of each month service from the date of employment commencement.
    • First year accumulation –
      • 2 days x 12 = 24 days
    • Second and third year accumulation –
      • 4 days x 12 = 48 days each year
    • Maximum accumulation –
      • 120 days (3 years of employment and after)

 

  •  Sickness allowance pay:
    • Every 4 days or more consecutive sick leave is entitled to receive 80% of average daily wages.

 

  • Market Practice:
      • Company policy may range from providing unlimited or a set number of sick leaves for 1-3 days of sick leave, paying at 100% full-pay.
  • Eligibility:
    • Female employees under a continuous employment contract for no less than 40 weeks will be eligible.
    • A medical certificate or evidence supporting can be provided to the employer.
    • Employees must receive 80% of average daily wages from the company.

 

  • Entitlement:
    • Entitled to a maximum of 14 weeks of paid maternity leave.
    • Maternity leave must be taken within 2-4 weeks prior to expected date.

 

  • Maternity Leave Pay:
    • Pay is to be calculated at four-fifths of the daily average of the wages earned by the employee. The Hong Kong government will reimburse employers for the cost of additional 4 week leave which is capped at HK$80,000.

 

  • Reimbursement of Maternity Leave Pay Scheme (RMLPS):
    • Application Timeline:
      • Employees can apply within 3 months from the last day of 14 week’s statutory maternity leave.
      • Applications can be submitted online or in-person.
      • Supporting Documents required upon application:
        • Business Registration (BR) Copy
        • Proof of company bank account
        • Employee’s declaration
        • Payment proof of 14 weeks’ maternity leave pay
        • Birth certificate or Pregnancy proof

Additionally, effective 25 October 2023, parents carrying a permanent resident status in Hong Kong will receive a one-off cash bonus of HK$20,000 from the government for each baby born. This measure is set to be in place until 2026 and will be further reviewed.

  • Under the ordinance, male employees will be able to take their statutory paternity leave within a 14-week period if the child is born on or after 11 December 2020.

 

  • Entitlement:
    • Male employees are entitled to 5 days for each confinement of spouse/partner.
    • The paternity leave must be taken within 4 weeks prior to expected date of delivery or 14 weeks following birth of the child.
    • The leave can be taken separately or consecutively.

 

  • Market Practice:
    • Companies are to pay maternity and paternity at 100% instead of 80% dependent on policy.
  • An employee is entitled to leave after having been employed under a continuous contract for every 12 months.
  • An employee’s paid annual leave entitlement increases progressively from 7 days to a maximum of 14 days according to their length of service.
  • It is also common practice for companies to provide different entitlements depending on the industry or level of seniority of the role, which would be stated in the employment contract.

Employees employed under a continuous contract are entitled to not less than one rest day in every period of seven days.

What are the public holidays in Hong Kong?

Hong Kong Public Holidays 2024

Employees are entitled to public holidays as follows:

HolidayDate
The first day of January1 January
Lunar New Year’s Day10 February
The third day of Lunar New Year12 February
The fourth day of Lunar New Year13 February
Good Friday29 March
The day following Good Friday30 March
Easter Monday1 April
Ching Ming Festival4 April
Labour Day1 May
The Birthday of the Buddha15 May
Tuen Ng Festival10 June
Hong Kong Special Administrative Region Establishment Day1 July
The day following the Chinese Mid-Autumn Festival18 September
National Day1 October
Chung Yeung Festival11 October
Christmas Day25 December
The first weekday after Christmas Day26 December

 

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In the meantime, stay updated on Labour Law updates throughout the year through our APAC Labour Law Updates. For more news and insights into the market, make sure to subscribe to our blog so you don’t miss out on the latest HR news, or contact our team to learn more about the latest changes!

*Please note that all the information listed above 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.

Interested to explore the idea of payroll outsourcing, EOR, or Visa application services?

Links International is a leading payroll outsourcing provider across Asia Pacific and supports payroll in over 17 countries. Please do not hesitate to contact us.

Relevant Links:

  • MPF:
    • 15 MPF Providers in Hong Kong – https://www.mpfa.org.hk/en/info-centre/public-registers/mpf-approved-trustees
  • Salaries Tax Filing and Period:
    • Salaries Tax Computation – https://www.ird.gov.hk/eng/ese/st_comp_2020_21/stcfrm.htm
  • Work Permits and Visas in Hong Kong:
    • General Employment Policy (GEP) – https://www.immd.gov.hk/eng/services/visas/GEP.html
      • Application for Entry for Employment as Professionals in Hong Kong (to be completed by the applicant) – https://www.immd.gov.hk/eng/forms/forms/id990a.html
      • Application for Employing Professionals in Hong Kong (to be completed by the employing company) – https://www.immd.gov.hk/eng/forms/forms/id990b.html
    • Dependants – https://www.immd.gov.hk/eng/services/visas/residence_as_dependant.html
      • Application for Entry for Residence as Dependants in Hong Kong – https://www.immd.gov.hk/eng/forms/forms/id997.html
    • Training – https://www.immd.gov.hk/eng/services/visas/training.html#secondTab
      • Application for Entry for Training in Hong Kong (to be completed by the applicant) – https://www.immd.gov.hk/eng/forms/forms/id992a.html
      • Application for Entry for Training (Sponsor) in Hong Kong (to be completed by the sponsoring company) – https://www.immd.gov.hk/eng/forms/forms/id992b.html
    • Top Talent Pass Scheme – https://www.immd.gov.hk/eng/services/visas/TTPS.html
  • How Share Awards and Share Options are Taxed – https://www.gov.hk/en/residents/taxes/salaries/salariestax/chargeable/options.htm
  • Discrimination Laws in Hong Kong:
    • The Hong Kong Bill of Rights Ordinance – https://www.hklii.org/eng/hk/legis/ord/383/
      • Sex Discrimination Ordinance – https://www.hklii.org/eng/hk/legis/ord/480/
      • Disability Discrimination Ordinance – https://www.hklii.org/eng/hk/legis/ord/487/
      • Family Status Discrimination Ordinance – https://www.hklii.org/eng/hk/legis/ord/527/
      • Race Discrimination Ordinance – https://www.hklii.org/eng/hk/legis/ord/602/
  • Labour Department – Employment Ordinance, Chapter 57 – https://www.labour.gov.hk/eng/legislat/content2.htm
  • Termination of Employment –
    • Electronic Filing of Employer’s Return – https://www.ird.gov.hk/eng/tax/err.htm
  • Retiring in Hong Kong – https://www.mpfa.org.hk/en/mpf-system/withdrawal-of-mpf/withdrawal-of-mpf-upon-retirement
  • Maternity Leave –
    • Reimbursement of Maternity Leave Pay (“RMLP”) Scheme – https://www.rmlps.gov.hk/eng/home