Employer of Record in Hong Kong SAR

Basic information

Currency：Hong Kong Dollar (HKD)

Official Language：Chinese and English

Salary cycle：Monthly

Localized benefits for employees

• Mandatory Provident Fund
• Employees’ Compensation Insurance
• Private Healthcare – Unisure (optional)
• Private Healthcare – Allianz (optional)

Pay&Tax

1. Minimum Wage Requirements

The minimum wage is HKD 6,300 per month.

2. Individual Income Tax

The individual income tax ranges from 0% to 17%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.

Gross Annual Income	Tax Rate (%)
Up to HKD – 50,000	2%
Up to HKD – 100,000	6%
Up to HKD – 150,000	10%
Up to HKD – 200,000	14%
Over HKD – 200,000	17%

3. Payroll Cost

The employer cost is generally estimated at 5% of the employee salary.

• Mandatory Provident Fund (MPF) – 5%

4. Overtime Pay & Maximum Hours

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.

Overtime payment is not mandatory. Overtime can be agreed upon between an employer and employee in an employment agreement.

Leave policy

1. Maternity Leave

Maternity leave in Hong Kong is complex. Pregnant employees who have been under a continuous contract for not less than 40 weeks immediately before the commencement of scheduled maternity leave, she are entitled to 14 weeks of paid leave. 2 weeks must be taken before the child’s birth.

The employee will receive 80% of their average monthly salary from the last 12 months and the employer will be responsible for this pay.

2. Paternity Leave

Employees who have worked for 40 consecutive weeks are entitled to 5 days of paid paternity leave. The leave can be divided however the employee sees fit.

The employee will receive 80% of their average monthly salary from the last 12 months and the employer will be responsible for this pay.

3. Parental Leave

In Hong Kong, no law covers parental leave. However, employees may be entitled to maternity leave and paternity leave.

4. Sick Leave

According to the employment ordinance – sickness allowance, employees are entitled to paid sick leave for up to 120 days if accrued and meet the eligibility for sick leave allowance.

Entitlement to sick leave is accrued at the rate of 2 paid days for each month of service during the first year of employment and at the rate of 4 paid sickness days for each month thereafter, up to a maximum of 120 paid sickness days.

Termination

1. Termination RequirementsTerminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Hong Kong can be complex. There is no at-will termination in Hong Kong for employers and termination must be done for just cause.

  Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • probation period
  • objective grounds
  • disciplinary dismissal
  • performance due to unsuitability for the job
• By the expiration of the contract

2. Notice Period  The minimum notice period is 7 days and will be increased according to the employment contract.
   • 7 days if the length of service is greater than 1 month and during the probation period
   • 30 days if the outside of the probation period
3. Severance for Employees

In Hong Kong, all employees who are terminated due to redundancy are entitled to severance pay, provided they have 2 years of continuous service.

Severance pay is calculated as the sum should not exceed two-thirds of the employee’s monthly wage or two-thirds of HK $22,500 (i.e. HK$15,000), whichever is less, for each year of service. The total statutory severance payment is capped at HK $390,000.

Statutory time off

1. Paid Time Off

Both full-time and part-time employees are entitled to 8-16 working days of paid time off (PTO) a year. PTO and accrual rate varies depending on the length of services. During the first year of employment, an employee is not allowed to take more than the number of days they have accrued while working.

Years of Service	PTO per Year	Accrual Rate of PTO per Month
1 – 2 years	7	0.58
3 years	8	0.67
4 years	9	0.75
5 years	10	0.83
6 years	11	0.92
7 years	12	1
8 years	13	1.08
Over 9 years	14	1.16

2. Public Holidays  Hong Kong celebrates 16 national holidays.  National public holidays include:
   • Lunar New Year’s Day
   • The second day of Lunar New Year
   • The third day of Lunar New Year
   • The fourth day of Lunar New Year
   • Ching Ming Festival
   • Good Friday
   • The day following Good Friday
   • Easter Monday
   • The day following Labour Day
   • The day following the Birthday of the Buddha
   • Tuen Ng Festival
   • Hong Kong Special Administrative Region Establishment Day
   • The second day following the Chinese Mid-Autumn Festival
   • National Day
   • Chung Yeung Festival
   • The first weekday after Christmas Day
   • The second weekday after Christmas Day

Onboarding

1. Onboarding

Onboarding takes 2 business days after the client signs the SOW.

Additional info

1. Employment Contract Details  Contracts must be in English and can be bilingual. A contract must include:
   • Name
   • Start date
   • Length of the employment
   • Job description
   • Termination conditions
2. Probation Period  Probation periods are not mandatory. There are no minimums or maximums. However, standard practice is 90 days.