Payroll Outsourcing Hong Kong

Q: How does payroll work in Hong Kong?

Hong Kong employers must contribute to the Mandatory Provident Fund (MPF), which is regulated by the Hong Kong Government. Employees and Employers contribute into the MPF, subject to earnings. Employers must contribute 5% of their monthly gross salary (to a maximum contribution of HKD 1,500) per month. Employees must also contribute 5% on earnings higher than HKD 7,100 per month, up to a maximum contribution of HKD 1,500.

Q: What are the general employment rules?

Employees become eligible for paid annual leave on completing a full year of service. At this point, they become eligible for 7 days entitlement. The entitlement remains the same in their second year but increases by 1 day per year thereafter up to a maximum of 14 days at 9 years of service. Maternity Leave of 14 weeks is due if the employee has been employed for at least 40 weeks before the planned Maternity Leave start date. Maternity Pay currently sits at 80% of the average earnings from the 12 months prior.

Q: What about dismissing an employee?

The appropriate procedure must be taken in order to dismiss an employee correctly. This includes providing the appropriate notice and ensuring the employee does not fall within a select number of scenarios. Please consult one of our Employment Law Specialists prior to commencing a contract termination.

Hong Kong Payroll Providers

Currency

Hong Kong Dollar (HKD)

Population

7,500,700

Capital

Hong Kong

Official language(s)

Cantonese, English

Date format

dd/mm/yyyy

Fiscal year

1 April – 31 March

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Hong Kong Payroll

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Employing in Hong Kong

From the 1^st May 2025, the Statutory Minimum Wage (SMW) in Hong Kong is HKD 42.10.

Individual income tax rates for the 2024/25 period vary depending on an employee’s salary. An employee is taxed on a progressive scale starting at 2% and increasing to 17%.

In Hong Kong, both the employee and employer contribute 5% of the employee’s monthly income to the Mandatory Provident Fund (MPF).

There is a minimum and maximum monthly threshold of HKD 7,100 and HKD 30,000 respectively.

There is no statutory limit on working hours for adults in Hong Kong, however, the Standard Working Hours Committee has suggested a 44-hour work week, with the average currently being anywhere between 40 and 48 hours.

Many businesses operate a 5-day working week, although some companies may require employees to work Saturdays.

Overtime payments are not mandatory, but an agreement can be reached between the employer and employee as to remuneration for any overtime worked.

Employee’s leave consists of several types:

Statutory time off or paid leave, which varies between 7 and 14 days depending on their length of service
Statutory holidays (there are currently 14 statutory holidays per year in Hong Kong, this will increase to 15 from 2026)
Maternity and Paternity leave
Sick leave

In Hong Kong, a contract of employment can be terminated by notice or payment in lieu of notice. The length of notice or payment required varies depending on the employee’s length of service.

An employer can terminate the employment contract without notice or payment in lieu of notice as a result of summary dismissal on various grounds, but this is a serious disciplinary action and only applies where an employee has committed a very serious misconduct, for example.

There are also some statutory restrictions on termination of an employment contract whereby an employer cannot dismiss an employee under the following circumstances:

Maternity protection
Paid sick leave
Giving evidence or information to the authorities
Trade union activities
Injury at work

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Frequently Asked Questions

Hong Kong employers must contribute to the Mandatory Provident Fund (MPF), which is regulated by the Hong Kong Government. Employees and Employers contribute into the MPF, subject to earnings. Employers must contribute 5% of their monthly gross salary (to a maximum contribution of HKD 1,500) per month. Employees must also contribute 5% on earnings higher than HKD 7,100 per month, up to a maximum contribution of HKD 1,500.

Employees become eligible for paid annual leave on completing a full year of service. At this point, they become eligible for 7 days entitlement. The entitlement remains the same in their second year but increases by 1 day per year thereafter up to a maximum of 14 days at 9 years of service.

Maternity Leave of 14 weeks is due if the employee has been employed for at least 40 weeks before the planned Maternity Leave start date. Maternity Pay currently sits at 80% of the average earnings from the 12 months prior.

The appropriate procedure must be taken in order to dismiss an employee correctly. This includes providing the appropriate notice and ensuring the employee does not fall within a select number of scenarios. Please consult one of our Employment Law Specialists prior to commencing a contract termination.

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