Laws and Policies in Hong Kong

Employment Contracts in Hong Kong

Employment is governed by the Employment Ordinance (EO), one of the most employer-friendly yet structured frameworks in Asia.

Contract Requirements

Hong Kong does not require contracts to be in writing, but written contracts are strongly recommended. A contract typically includes:

• Employer and employee details
• Job title and responsibilities
• Place of work
• Salary in HKD and payment frequency
• Working hours and rest days
• MPF pension contributions
• Overtime and holiday work terms
• Probation period (if applicable)
• Termination notice requirements

Types of Contracts

• Continuous contracts (employee works ≥18 hours per week for ≥4 weeks)
• Fixed-term contracts
• Part-time and casual agreements

Probation

Commonly 1–3 months.
Probation periods may have shorter notice periods if clearly stated.

An EOR ensures all contracts comply with Hong Kong’s Employment Ordinance.

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Working Hours in Hong Kong

Hong Kong has no statutory maximum working hours, but market norms apply.

Typical patterns:

• 40–48 hours per week
• 5 or 5.5-day workweek, depending on industry

Overtime

• Overtime is not mandated unless specified in the contract
• Many companies offer overtime pay or time off in lieu as a policy
• Senior and professional roles often include expected extra hours

Rest Requirements

• Employees are entitled to at least one rest day per week (24 consecutive hours).

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Employee Leave in Hong Kong

Annual Leave

Entitlement increases with years of service under a continuous contract:

• Year 1: 7 days
• Year 2: 7 days
• Year 3: 8 days
• Year 4: 9 days
• Year 5: 10 days
• Year 6: 11 days
• Year 7: 12 days
• Year 8+: 14 days

Statutory Holidays

Hong Kong provides 13 statutory holidays (with an increasing number being phased in).
Most employers also provide additional general holidays.

Sick Leave

Employees accrue paid sick leave as they work:

• 2 days per completed month during first 12 months
• 4 days per month thereafter
  Unused sick leave is cumulative up to 120 days.

Maternity Leave

• 14 weeks of maternity leave
• Payment: 80% of average wages, subject to eligibility
• Additional leave for medical complications or premature birth

Paternity Leave

• 5 days of statutory paternity leave
• Paid at 80% of regular wages, subject to requirements

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Employee Benefits in Hong Kong

Mandatory Provident Fund (MPF)

All employees aged 18–64 must be enrolled in the MPF pension scheme.

Contributions:

• Employer: 5% of monthly salary
• Employee: 5% of monthly salary
• Contributions are capped after a specific threshold

Additional Common Employer Benefits

To compete for top talent, companies typically offer:

• Private medical insurance (hospital, outpatient, dental)
• Life and accident insurance
• Transport allowances
• Performance bonuses
• Education or certification support
• Work-from-home or hybrid benefits

An EOR helps design compliant and competitive benefits programs tailored to the Hong Kong market.

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Payroll & Tax in Hong Kong

Payroll Currency

• Salaries are usually paid in HKD
• Some expatriate contracts may involve multi-currency arrangements

Payroll Cycle

• Monthly, paid at month-end

Individual Income Tax (Salaries Tax)

Hong Kong uses a progressive tax system with low tax rates and numerous deductions.

Employers must:

• Withhold taxes where required
• File annual employer tax returns
• Issue income statements to employees
• Report new hires and terminated employees to authorities

Employer Payroll Duties

• Enroll employees in MPF
• Calculate contributions and payroll deductions
• File annual returns and reporting
• Maintain compliant payroll records

An EOR ensures complete payroll accuracy and full compliance with Hong Kong’s Inland Revenue Department (IRD) rules.

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Employment Laws & Compliance in Hong Kong

Key obligations include:

• Providing statutory benefits under the Employment Ordinance
• Granting rest days, holidays, and leave entitlements
• Ensuring MPF enrollment for all eligible employees
• Providing proper termination notice and final payments
• Maintaining records of attendance, wages, and leave

Termination & Severance

Termination must follow statutory rules:
Employees may be entitled to:

• Notice or pay in lieu
• Severance payment (for at least 24 months’ service if redundancy applies)
• Long-service payment (for ≥5 years’ service under certain conditions)
• Payment of all outstanding wages, untaken annual leave, and MPF contributions

Non-Discrimination

Employers must avoid discrimination based on:

Age (covered under general equality principles)

Sex

Pregnancy

Disability

Family status

Race