What are the statutory contributions for employees and employers in Hong Kong?
Employee Income Tax
The Hong Kong tax system applies a progressive tax structure, with rates as follows:
| Taxable Income | Tax Rate |
|---|---|
| HKD 50,000,000 | 2% |
| HKD 50,001.00 – HKD 100,000.00 | 6% |
| HKD 100,000.01 – HKD 150,000,000 | 10% |
| HKD 150,000,001 – HKD 200,000,000 | 14% |
| over HKD 200,000,001 | 17% |
Employer Payroll Contributions
Employers are required to contribute to their employees’ social insurance accounts. The contribution rates vary based on earnings, but the total generally ranges up to 5%.
The social insurance account in Hong Kong is called Workmen’s Compensation Insurance. As per Section 40 of the Employees’ Compensation Ordinance, it is mandatory for all employers to have insurance coverage to protect their employees from work-related injuries. This applies to all employees, regardless of their employment duration, working hours, or job type.
For more details, please refer to the Hong Kong Employees’ Compensation Ordinance.
Employee Payroll Contributions
Employees are required to contribute to their own social insurance accounts, including their MPF contributions. The contribution rates vary based on earnings, but the total generally ranges up to 5%.
| Monthly Relevant Income | Employer’s Mandatory Contribution | Employee’s Mandatory Contribution |
| Less than $7,100 | Relevant income x 5% | No contribution |
| $7,100 to $30,000 | Relevant income x 5% | Relevant income x 5% |
| More than $30,000 | $1,500 | $1,500 |
For complete information on MPF, visit this link.
What is the minimum wage in Hong Kong?
Hong Kong sets a hourly minimum wage of HKD 40.00, starting from May 1st 2023. Refer to the Hong Kong Labour Department guideline for more information.
What is the payroll cycle in Hong Kong?
The standard payroll cycle in Hong Kong is monthly, with pay dates falling on the last day of the month.
It is also customary for employers to pay a 13th month salary during the Lunar New Year or at the end of the year.
How long is the working hours in Hong Kong?
Hong Kong sets a maximum working hours of 48 hours per week. There are no laws on overtime pay, and this usually is stated in either the employment contract or collective bargaining agreements.
How many leaves are employees entitled to?
- Standard paid time off — employees in Hong Kong are entitled to at least 7 days of paid annual leave after completing three months of employment, which accumulates progressively until reaching a maximum amount of 14 days on the 9th year of employment.
| Years of Service | Annual Leave Entitlement |
| 1 | 7 |
| 2 | 7 |
| 3 | 8 |
| 4 | 9 |
| 5 | 10 |
| 6 | 11 |
| 7 | 12 |
| 8 | 13 |
| 9 or above | 14 |
- Compulsory annual public holidays — there are 12 statutory public holidays and 5 general holidays in Hong Kong.
- Minimum paid sick leave — employees in Hong Kong are entitled to 2 days of paid sick leave per month during the first 12 months of employment, which will later increase to four days per month. Employees are allowed to accumulate sick days throughout their entire employment to a maximum of 120 days.
What are the public holidays in Hong Kong?
Here is the list of public holidays in Hong Kong for 2023:
| Date | Name |
| 1 Jan | New Year’s Day |
| 2 Jan | New Year’s Holiday |
| 22 Jan | Lunar New Year’s Day |
| 23 Jan | Second Day of Lunar New Year |
| 24 Jan | Third Day of Lunar New Year |
| 25 Feb | Fourth Day of Lunar New Year |
| 5 Apr | Ching Ming Festival |
| 7 Apr | Good Friday |
| 8 Apr | Good Friday Holiday |
| 10 Apr | Easter Monday |
| 1 May | Labour Day |
| 26 May | Buddha’s Birthday |
| 22 Jun | Dragon Boat Festival |
| 1 Jul | Hong Kong SAR Establishment Day |
| 30 Sep | Day after Mid-Autumn Festival |
| 1 Oct | Chinese National Day |
| 2 Oct | Chinese National Day (in lieu) |
| 23 Oct | Chung Yeung Festival |
| 25 Dec | Christmas Day |
| 26 Dec | First Weekday After Christmas Day |
How long is the maternity and paternity leave in Hong Kong?
- Statutory maternity leave — female employees in Hong Kong are entitled to up to 14 weeks of paid maternity leave with the potential of increasing to 18 weeks with complicated or multiple births, depending on their contract.
- Statutory paternity leave — male employees in Hong Kong are entitled to 5 days of paid paternity leave, depending on their contract.
- Statutory parental leave — there is no mandatory parental leave in Hong Kong.
What rights do employees have upon leaving employment due to certain conditions?
Employers can terminate employees for valid reasons such as poor performance or misconduct, but this must be done according to the Labor Law requirements. When an employee’s service with a company is terminated for certain reasons, they are entitled to certain rights and benefits, including:
- Notice period — employees are entitled to 30 days of notice period, although employers can specify longer notice periods within the employment contract.
- Severance pay — employees are entitled to mandatory severance pay, which varies based on the length of service. The statutory severance pay in Hong Kong is two-thirds of the employee’s regular monthly salary rate or two-thirds of 22,500 HKD, whichever is less, for each year of service, and is subject to a maximum sum of 390,000 HKD.
- Probation period — employees generally have a week to a month of probation period.
What is the type of visa for employees in Hong Kong?
Foreign nationals require a visa to take up employment in Hong Kong, and their employer is required to act as a local sponsor to support the visa application. Under the existing immigration policy, a person seeking to enter Hong Kong for employment should possess a particular skill, knowledge, or value experience which is not readily available in Hong Kong.
Applicants who wish to possess a working visa for Hong Kong will need to be in possession of a graduate degree unless they are considerably experienced in a specialized field or have relevant experience.
Should the employee’s spouse and dependent family also decide to relocate to Hong Kong, they will require dependent visas, which will allow the spouse to take up employment in Hong Kong as well.
Standard VAT Rate
To facilitate the development of the trading industry in Hong Kong, Hong Kong does not impose goods and services tax (GST) or value-added tax (VAT).
Is there a maximum length of contract for employees?
There is no specific maximum length of time for employees to be employed on a contract basis in Hong Kong. The length of a contract varies according to the agreement between the employer and employee.
What is the retirement age in the Hong Kong?
The retirement age in Hong Kong is currently 65 years old. However, early retirement at the age of 60 years has become a standard practice for most employees.