Employer of Record Hong Kong: 6 Providers Compared
Hiring in Hong Kong through an employer of record: the MPF cap, severance after the end of offsetting, typhoon rules, and six providers compared.
Employer of Record Hong Kong: 6 Providers Compared
Why Hong Kong’s statutory employer cost stops growing at HK$30,000 a month, what the end of MPF offsetting did to severance, what the Employment Ordinance settles before any vendor is involved, and six employer of record providers compared on published pricing
The first Hong Kong offer I priced, I braced for the wrong thing. I had just worked through two Asian markets where the employer load ran into double digits, so I padded the budget, ran the arithmetic, and found almost nothing on top of the salary. I assumed I had missed a form.
I had not. Hong Kong charges an employer one recurring statutory contribution, and it stops at HK$1,500 a month per person no matter what you pay someone. The money that does matter is somewhere else entirely: a severance entitlement that accrues silently and, since May 2025, can no longer be paid for out of the retirement contributions you were already making. An employer of record takes the whole apparatus off your desk by employing the person through its own Hong Kong entity.
What a provider cannot do is change the arithmetic underneath. This guide covers what Hong Kong law requires before any vendor is involved, what a hire costs on top of gross salary, and six providers compared on the prices they actually publish. Every legal and contribution figure below was checked against Hong Kong government sources in September 2026.
How an employer of record works in Hong Kong
An employer of record employs your Hong Kong hire through a Hong Kong entity it already holds, so you can put someone on a compliant local payroll without incorporating in Hong Kong. You choose the person and the pay. The provider signs the contract and takes on the employer obligations.
The Hong Kong mechanics have one feature US buyers consistently get backwards. There is no payroll withholding here. An employer does not deduct salaries tax from a paycheck and remit it; the employee is assessed directly and pays the Inland Revenue Department themselves. What the employer owes the tax authority is paperwork filed on time, which is a different obligation with a different failure mode.
| Function | The provider | You |
|---|---|---|
| Employment contract | Drafts and signs it under the Employment Ordinance | Agree the role, the seniority, and the package |
| MPF enrollment | Enrolls the person within 60 days and contributes every month | Return signed paperwork before the start date |
| Employees’ compensation insurance | Holds the policy the law requires for every employee | Confirm the work is office based, if it is |
| Salaries tax reporting | Files the commencement, annual, and cessation forms with the Inland Revenue Department | Nothing, because the employee is assessed directly |
| Payroll | Calculates, pays in Hong Kong dollars, and issues the payslip | Approve the run |
| Severance and long service accrual | Tracks it and pays it when a statutory trigger is met | Decide whether to provision for it monthly |
| Statutory leave | Grants annual leave, statutory holidays, rest days, and sickness allowance | Decide anything above the minimum |
| Adverse weather arrangements | Applies whatever the contract and the staff handbook say | Write the typhoon policy before the first typhoon |
| Day-to-day management | Nothing | Objectives, direction, performance, and promotion |
| Termination | Executes it on Employment Ordinance notice and payment rules | Make the decision and build the record early |
The right-hand column is the part vendors underplay. A provider removes administration and legal exposure, not judgment. You still recruit, still decide, and still own whatever onboarding experience the person actually gets in their first month.
Do you actually need one for Hong Kong?
Only if the person is genuinely an employee and you have no Hong Kong entity. Those are two separate questions, and the second one deserves harder thought in Hong Kong than anywhere else in the region, because incorporating here is cheap and the payroll underneath is simple.
The classification question is the expensive one. If the honest answer is freelancer, the right purchase is a contractor management product at $5 to $49 per person per month rather than an employment arrangement at many times the price. If the honest answer is employee, and you are setting hours and directing the work, an employer of record is the arrangement that fits. Guessing in your own favor is how a misclassification problem starts.
The MPF and the rest of what an employer pays
A Hong Kong employer makes one recurring statutory contribution: 5 percent of relevant income into a mandatory provident fund scheme, charged between a floor of HK$7,100 and a ceiling of HK$30,000 of monthly income. That caps the line at HK$1,500 a month per person, and no other statutory levy in Hong Kong is charged as a percentage of payroll.
| Item | Rate or basis | Who pays | Cap or floor |
|---|---|---|---|
| MPF mandatory contribution | 5% of relevant income | The employer, with the employee contributing a separate 5% | Floor HK$7,100 a month, ceiling HK$30,000 a month |
| Maximum MPF per person | HK$1,500 a month | The employer | Reached at a salary of HK$30,000 |
| Employee MPF | 5% of relevant income | The employee, by deduction | No employee contribution in the first 30 days |
| Employees’ compensation insurance | A commercial premium quoted on payroll | The employer | Cover of at least HK$100 million per event for teams of up to 200 |
| Severance or long service payment | Two thirds of a month’s wages per year of service | The employer, when a statutory trigger is met | Wages counted to HK$22,500, so HK$15,000 a year |
| Salaries tax | Assessed on the employee directly | The employee | The employer files forms rather than withholding |
| Health or unemployment levy | Does not exist | Nobody | No employer-side equivalent |
Relevant income is broader than base salary, which is the detail that makes a quote look wrong in a bonus month. It covers wages, salary, leave pay, fees, commissions, bonuses, gratuities, perquisites, and allowances, so a bonus counts toward the contribution base like any other payment. On a salary already above the ceiling this changes nothing. On a HK$25,000 salary with a month of commission it does.
Enrollment is the deadline to watch rather than the rate. Anyone aged 18 to 64 employed for a continuous period of 60 days or more has to be enrolled within 60 days of their first day, and the employer contribution runs from day one even though the employee gets a 30-day grace period. Failing to enroll or contribute is an offense carrying a maximum fine of HK$350,000 and three years of imprisonment, which is a heavier penalty than most US founders expect from a retirement scheme.
Work injury cover is bought rather than levied. Under the Employees’ Compensation Ordinance every employer must hold a policy covering its liability for all employees, with cover of at least HK$100 million per event for an employer of no more than 200 people. Failing to insure carries a maximum fine of HK$100,000 and two years of imprisonment. Because it is a commercial premium, the number sits in your provider’s quote rather than in any statute, and it is worth asking whether it is billed through or absorbed.
The tax side is the part that genuinely surprises people. Hong Kong employers do not withhold salaries tax; they report. The Inland Revenue Department requires an IR56E within three months of an employee starting, an IR56B each year with the employer’s return, an IR56F no later than a month before employment ends, and an IR56G no later than a month before an employee leaves Hong Kong, together with an obligation to withhold money for tax clearance in that last case. Failure carries a fine of HK$10,000.
Severance, long service payment, and the end of offsetting
Severance and long service payment share one formula and two different triggers: severance after 24 months of continuous service where the dismissal is by reason of redundancy, and long service payment after five years on most other exits. Both pay two thirds of a month’s wages for each year of service, capped at HK$15,000 a year and HK$390,000 in total.
No employee receives both for the same period of employment. Long service payment also covers a fixed-term contract expiring without renewal, resignation certified on medical grounds, resignation at the age of 65 or above, and the death of the employee, which makes it the broader of the two in practice even though it takes longer to qualify for.
One rule change reshaped this line, and it is why older guidance now misleads. Until 1 May 2025 an employer could offset severance and long service payment against the accrued benefits derived from its own MPF contributions, which meant the retirement scheme you were already funding largely paid the exit bill. The Mandatory Provident Fund Schemes Authority describes the position after the abolition of the offsetting arrangement: for service from the transition date onward, employer mandatory contributions can no longer be used that way.
| Obligation | Hong Kong position | What it means for a US buyer |
|---|---|---|
| Severance payment | Two thirds of a month’s wages per year, on redundancy after 24 months | Model it from the first hire, not at the exit |
| Long service payment | The same formula after five years, on most other exits | Year five is when a quiet liability turns into a real one |
| Wage cap in the formula | Wages counted only to HK$22,500 a month, so HK$15,000 a year of service | The line stops growing on senior salaries |
| Overall maximum | HK$390,000 across the pre- and post-transition portions combined | A ceiling a small-business hire rarely reaches |
| MPF offsetting | Abolished for service from 1 May 2025 onward | Employer MPF no longer pays the exit bill for you |
| Payment timing | Long service payment within seven days; severance within two months of a written claim | Faster than most US separation timelines |
Anyone you hire today starts on the far side of that transition, so the pre-transition arithmetic is irrelevant to you and the offsetting stories in older guides are worse than useless. Your hire accrues an unoffsettable entitlement of up to HK$15,000 for every year they stay, payable if the role is later made redundant or if they reach five years and are then dismissed for anything short of serious misconduct, see out a fixed term, resign on certified medical grounds, or resign at 65 or above.
The deadlines are short and the penalties are not symmetric. Long service payment falls due within seven days of the contract ending, and a willful failure to pay it carries a fine of HK$350,000 and up to three years of imprisonment. Severance is due within two months of receiving a written claim, which the employee must serve within three months of the dismissal, and failing to pay it carries a fine of HK$50,000.
What a Hong Kong hire costs on top of gross
One employee on HK$60,000 a month costs about HK$2,750 a month in employer contributions and accrual, or roughly 4.6 percent on top of gross, before insurance and the platform fee. That is HK$720,000 of salary and about HK$33,000 of employer cost across a full year.
| Cost line | Basis | Monthly | Annual |
|---|---|---|---|
| Gross salary | Agreed with the candidate | HK$60,000 | HK$720,000 |
| MPF mandatory contribution | 5% of relevant income, capped at HK$30,000 a month | HK$1,500 | HK$18,000 |
| Severance and long service accrual | Up to HK$15,000 for each year of service | HK$1,250 | HK$15,000 |
| Employees’ compensation insurance | A commercial premium, quoted rather than set by statute | By quotation | By quotation |
| Employer subtotal | About 4.6% on top of gross, before insurance | HK$2,750 | HK$33,000 |
| Platform fee | $599 per employee monthly | $599 | $7,188 |
The accrual line is the one to argue about. It is an entitlement that crystallizes only on redundancy or at the five-year mark rather than a contribution you remit every month, so a provider quoting cash cost will leave it out entirely and be technically right. Leaving it out of your own model is how a HK$75,000 exit payment arrives as a surprise in year five.
Now the part that makes Hong Kong unusual. Both real lines are capped in absolute dollars rather than as percentages, so the employer load does not merely flatten as pay rises, it collapses. The same package that costs 10.6 percent on a junior salary costs 2.8 percent on a senior one.
| Monthly salary | MPF a month | Severance accrual a year | Combined, as a share of salary |
|---|---|---|---|
| HK$20,000 | HK$1,000 | HK$13,333 | 10.6% |
| HK$30,000 | HK$1,500 | HK$15,000 | 9.2% |
| HK$60,000 | HK$1,500 | HK$15,000 | 4.6% |
| HK$100,000 | HK$1,500 | HK$15,000 | 2.8% |
Read the middle rows together. MPF reaches its ceiling at HK$30,000 of monthly income and the severance formula reaches its own at HK$22,500 of monthly wages, so by the time a salary passes HK$30,000 every statutory line is fixed in cash terms. Every raise after that point adds exactly nothing to your employer cost, which is the opposite of the pattern most US founders carry in their heads.
The practical consequence is a comparison most vendors would rather you did not run. At HK$100,000 a month, a $599 platform fee costs roughly HK$4,700 a month against HK$2,750 of employer cost, so the provider is the larger line by a wide margin. The true cost of employing someone in Hong Kong is set less by the government than by whichever vendor you choose.
Currency is the one place Hong Kong is kinder than its neighbors. The Hong Kong Monetary Authority runs the Linked Exchange Rate System with convertibility undertakings at 7.75 and 7.85 to the US dollar, so a Hong Kong dollar payroll billed in dollars moves inside a band of well under two percent rather than drifting with a floating rate. The markup your provider charges on the conversion is still worth asking about, because that is a commercial decision rather than a market one.
The wage floor and the continuous contract test
Hong Kong’s statutory minimum wage is HK$43.1 an hour from 1 May 2026, applied territory-wide with no district variation and no exemption for small employers. The same revision raised the monthly monetary cap on the duty to record hours worked from HK$17,200 to HK$17,600.
The Labour Department puts the new rate at HK$43.1 and the recording cap at HK$17,600, both effective on the same day. For the roles US companies usually hire in Hong Kong neither figure binds, and the recording cap is the more interesting of the two: below it, an employer has to keep a record of the total hours each employee works in every wage period.
The bigger change for a small employer took effect on 18 January 2026. The Employment Ordinance gates almost every statutory entitlement behind a continuous contract, and the test for one has been rewritten. The Labour Department describes the revised requirement as four or more weeks with the same employer plus either 17 hours in each week or 68 hours or more across any four-week period, replacing the old rule of 18 hours in each of four consecutive weeks.
That matters if you are hiring part-time. Under the old test a person who worked 20 hours in three weeks and 12 in the fourth fell outside a continuous contract and lost paid annual leave, statutory holiday pay, sickness allowance, severance, and long service payment along with it. Under the aggregate test the same pattern qualifies. A provider still quoting the 18-hour rule is working from a stale playbook, and the difference is entitlements rather than pennies.
Hours, leave, typhoons, and ending employment in Hong Kong
The Employment Ordinance sets no general cap on working hours for adult employees and requires no overtime premium, which makes the contract itself do more work here than in most markets. What it does fix is one rest day in every seven, paid annual leave rising with tenure, statutory holidays, sickness allowance, and the notice required to end a contract.
The Government has said as much directly: on the premise of not contravening the Employment Ordinance and the Minimum Wage Ordinance, employers and employees may draw up the terms of employment including working hours and compensation arrangements for overtime work. In practice that means your contract is the working time policy, and a US template that says nothing about hours says nothing in Hong Kong either.
| Term | Hong Kong position | What a US employer usually expects |
|---|---|---|
| Standard week | No statutory cap on hours for adult employees | 40 hours a week |
| Overtime premium | Nothing required by statute, so it is purely a contract term | Time and a half above 40 hours |
| Rest days | At least one in every period of seven days | Set by company policy |
| Paid annual leave | 7 days at one and two years of service, then a day more each year to 14 at nine | 10 to 15 days of paid time off |
| Statutory holidays | 15 days, rising to 16 from 2028 and 17 from 2030 | No federal requirement to give paid holidays |
| Paid sickness days | Two a month in the first year, four a month after, capped at 120 | Set by company policy or state law |
| Sickness allowance | Four fifths of average daily wages, once four consecutive days are taken | Usually full pay, by policy |
| Maternity leave | 14 weeks, paid at four fifths of average daily wages | 12 unpaid weeks under federal law, if eligible |
| Paternity leave | 5 days, paid at four fifths of average daily wages | No federal paid equivalent |
| Notice of dismissal | One month by default, or at least seven days if the contract says so | 2 weeks as a courtesy |
| At-will employment | Does not exist, though the protected grounds are narrow | The default in almost every state |
Leave is thinner than the regional average and grows slowly. The Labour Department’s guide sets paid annual leave at seven days after a year of service, holding there through the second year, then climbing a day a year to a maximum of 14 at nine years, alongside the statutory holidays and the rest day in every seven. Matching that ladder exactly is legal and will read as ungenerous to a Hong Kong candidate comparing your offer with a local one, so price the allowance against what the person already has.
Statutory holidays are on a legislated climb. Easter Monday became one from the start of 2026, taking the count to 15, with Good Friday joining from 2028 and the day after Good Friday from 2030, at which point statutory holidays finally match the 17 general holidays that banks and schools already observe. Two more days are still to come, so a contract written today will need revisiting twice.
The weather rules reach further than pay. Under the Employees’ Compensation Ordinance an employer is liable for injury or death on a direct route between home and work within four hours before or after working hours when signal number 8 or above, a red or black rainstorm warning, or an extreme conditions announcement is in force. A manager who asks someone to come in during a typhoon is extending your liability window, not just being demanding.
The other clause worth reading before you sign anything is the bonus. An end of year payment, which covers double pay and thirteenth month arrangements, is a contractual entitlement rather than a statutory one, but for contracts made after 27 June 1997 an annual bonus is presumed not to be gratuitous or discretionary unless a written term says otherwise. Inherit a provider template with a loose bonus clause and you may have promised something enforceable.
Ending employment is where Hong Kong is genuinely easier than its neighbors and still not easy. The default notice is one month, or at least seven days where the contract specifies a period, with nothing required in the first month of probation, and wages in lieu are calculated on average wages over the preceding 12 months. The hard limits are the situations where dismissal is barred outright: while an employee is on paid sick leave, after a pregnancy has been notified, for giving evidence to the authorities, for trade union activity, and before a work injury claim is settled. Dismissing in any of those circumstances is an offense carrying a fine of HK$100,000.
Employer of record providers for Hong Kong compared
Six providers, compared on the fees they publish rather than the fees a salesperson mentions. All six publish an employment rate, all six publish a contractor rate, and none of them names the Hong Kong entity that would employ your hire.
| Provider | Published employment fee | Contractor fee | Notes |
|---|---|---|---|
| Deel | $599 per employee monthly | $49 per contractor monthly | Publishes a full rate card, including contractor of record at $325 and US co-employment at $125 |
| Remote | $699 per employee monthly | $29 per contractor monthly | States that it directly owns all of its legal entities |
| Papaya Global | From $499 per employee monthly | From $5, or from $199 as contractor of record | Prices payroll separately, from $29 per employee monthly |
| Atlas HXM | From $599 per employee monthly | $199 per agent of record monthly | Volume pricing offered, plus a published rate of $399 for eligible nonprofits |
| Oyster | $699 per employee monthly | Free for 30 days, then $29 per contractor | Annual discounts offered; advisory time metered at $300 an hour |
| RemoFirst | From $199 per employee monthly | Free, or $25 on the premium tier | States that no setup, onboarding, or termination fees apply |
The published band runs from $199 to $699 per employee monthly, a spread of about $6,000 a year on a single Hong Kong hire. Price matters more here than in most markets precisely because the statutory load is so small: on a senior salary the vendor decision moves your all-in cost by a larger amount than the Hong Kong government does.
The six providers reviewed
Deel publishes every rate on one page, which in this category is still not universal, and at $599 per employee monthly it sits at the market anchor rather than the top of it. For a US company making a first Hong Kong hire, the practical draw is that employment and contractor management live in one account, so the common shape of one employee in Hong Kong and three contractors elsewhere does not need two vendors.
Press on Hong Kong specifically. The vendor claims employment in more than 130 countries without naming the entities, and the answer for Hong Kong decides who is accountable if an MPF enrollment misses the 60-day deadline or an IR56G goes in late. Ask for the Hong Kong contract template as well, read the end of year payment clause and the intellectual property assignment, and ask how the post-transition severance accrual is tracked and reported.
Remote states on its pricing page that it directly owns all of its legal entities and never relies on third parties to employ workers. That is the vendor’s own claim rather than a verified fact, but if it holds for Hong Kong it buys something specific: one named party to run the MPF enrollment, hold the employees’ compensation policy, and answer to the Labour Department.
The exit argument carries more weight in Hong Kong than anywhere else on this page. Payroll on its own costs $29 per employee monthly for companies that already hold the local entity, and because a Hong Kong company is quick and cheap to register, the day you outgrow the arrangement arrives early. The trade is price: at $699 per employee monthly it sits at the top of the published range, roughly $1,200 a year above the anchor on a single hire.
Papaya Global publishes a starting rate of $499 per employee monthly, below the $599 anchor, and prices employment, contractor of record, contractor payments, and managed payroll separately so you buy the piece you need. The platform is built around payments and reporting rather than employment alone.
In Hong Kong that reporting bias is useful for an unusual reason. There are barely any statutory lines to break out, so the value is not in splitting a complicated contribution bill; it is in showing the severance and long service accrual as a number that grows every month while the cash invoice stays flat. Ask whether the reporting actually does that before you pay for it, and remember that a starting rate is not a Hong Kong quote.
Atlas HXM publishes a starting rate of $599 per employee monthly and describes its entities as owned and operated rather than partner-based, which puts it in the same conversation as the option above it at a lower published price. It also publishes a separate rate of $399 per employee monthly for eligible nonprofits, which is rare enough in this category to mention.
What to establish is whether the owned model extends to Hong Kong. Providers commonly own entities in their largest markets and lean on partners elsewhere, and Hong Kong is a regional hub, so ownership is plausible but not safe to assume. Ask for the name of the employing entity and its business registration number, and ask who signs the MPF enrollment for your hire. Its pricing page also compares rival rates, which is worth reading as marketing rather than as data.
Oyster publishes its rate, gives contractors a free first 30 days before charging $29, and states that setup, onboarding, and offboarding are included in the subscription rather than billed separately. That suits a founder who wants one Hong Kong employee and no standing relationship to manage, and the buying flow is the most straightforward in this group.
The hourly advisory rate is the tell about the model. People partner services are metered at $300 an hour, so guidance is a product rather than an included service. In Hong Kong that lands badly in two specific moments: the first typhoon season, when someone needs an arrangement written down, and the first departure, when the severance and long service calculation has to be right the first time.
RemoFirst publishes the lowest fee in this group by a wide margin, starting at $199 per employee monthly, and states that no setup, onboarding, or termination fees apply, with no minimum contract term and no minimum headcount. On one Hong Kong hire that gap is roughly $4,800 a year against the anchor and $6,000 against the top tier, which decides the business case at seed stage.
The words in front of the number are doing the work, and Hong Kong is a market where the fee is the main variable. Ask for the Hong Kong figure in writing, ask who holds the entity, ask what the deposit is, and ask how the severance accrual is handled at termination. A low monthly fee paired with a large deposit is not a low-cost arrangement, it is a cash-flow arrangement.
A provider or your own Hong Kong company
Use a provider for the first hire, and model your own company earlier than you would anywhere else in Asia. The crossover often arrives at two or three employees rather than three or four, because a Hong Kong company is quick to register and the payroll it has to run afterward is genuinely simple.
| Route | What it takes to start | What it costs to run | When it wins |
|---|---|---|---|
| Employer of record | A contract and a deposit; the provider already holds the entity | $199 to $699 published per employee monthly, plus the capped Hong Kong employer load | The first one or two people in Hong Kong |
| Your own Hong Kong company | Incorporation in Hong Kong, an MPF scheme, an employees’ compensation policy, and an employer’s file with the Inland Revenue Department | Company administration, payroll administration, the Inland Revenue filings, and tax on profit | Two or three people onward, or any sustained presence |
| Independent freelancers | A contract, if the relationship is genuinely independent | Contractor platform fees of $5 to $49 per person monthly | Genuinely project-based work only |
The third row is a warning rather than a recommendation. Engaging someone in Hong Kong as a freelancer while setting their hours and directing their methods is the fastest route to a relationship being treated as employment after the fact, with MPF contributions and statutory entitlements calculated backward across the whole engagement. The product you buy does not decide the classification. The relationship does.
There is also a question for your tax adviser that has nothing to do with which provider you choose: whether the way your Hong Kong person works could create a taxable presence for your US company regardless of who employs them. Signing authority and customer-facing sales are the usual concerns, engineering rarely is, and the question belongs in the file before it belongs in an audit. If you later move the person onto your own payroll, treat it as a change of employer rather than a data migration, because continuity of service and the severance accrual both travel with it.
What to ask before you sign
Before you choose
FirstHR is not an employer of record. We hold no entity in Hong Kong, employ nobody on your behalf, and take on no employer liability, so if you need someone on a Hong Kong payroll next month, the providers above are the category to shortlist. FirstHR is an onboarding and HR platform, not a payroll provider.
This section exists because the provider decision and the HR decision are separate, and people conflate them. A provider handles the legal employment. It does not run the first week, own the signed documents, deliver the training the role requires, or keep employee records in a state where you can find them a year later. In Hong Kong that last point carries weight, because continuity of service drives the severance calculation and the record of it is yours to produce.
That layer stays yours whichever route you take, and it is what we built FirstHR for: onboarding with e-signature, document management, training with completion tracking, and an employee record that holds together for a small business without a dedicated HR person, at a flat $98 to $198 per month regardless of headcount.
Frequently Asked Questions
What is an employer of record in Hong Kong?
The company named as employer on the Hong Kong contract, the payslip, and the MPF enrollment, while the person works for you in every practical sense. It already holds a Hong Kong entity, enrolls the new hire in a provident fund scheme, carries the compulsory work injury policy, files the Inland Revenue forms, pays in local currency, and holds the legal exposure that a US company with no Hong Kong presence cannot hold itself.
How much does an employer of record cost in Hong Kong?
Published fees among the six providers here span $199 to $699 per employee monthly, and in Hong Kong that fee usually costs more than everything the government charges rather than being a rounding error beside it. Add the capped MPF contribution, an employees’ compensation insurance premium, the accruing severance entitlement, any refundable deposit, and a currency markup on the conversion into Hong Kong dollars.
What does an employer pay in Hong Kong on top of salary?
An MPF contribution of 5 percent of relevant income, charged between HK$7,100 and HK$30,000 a month so it never exceeds HK$1,500; a commercial premium for employees’ compensation insurance; and an accruing severance or long service entitlement worth up to HK$15,000 a year of service. No other statutory levy is charged as a percentage of payroll, and no salaries tax is withheld at source.
Is the MPF contribution mandatory in Hong Kong?
Yes, for anyone aged 18 to 64 employed for a continuous period of 60 days or more. The employer contributes from the first day of employment while the employee gets a 30-day grace period at the start, and both sides pay 5 percent of relevant income. Missing the 60-day enrollment deadline is an offense carrying a maximum fine of HK$350,000 and three years of imprisonment.
How does severance pay work in Hong Kong?
Redundancy after two years of service triggers a severance payment, and five years of service triggers a long service payment on most other exits, with nobody receiving both for the same period. The formula is two thirds of a month’s wages for each year, counting wages only to HK$22,500, so each year of service is worth HK$15,000 and the total cannot exceed HK$390,000.
What is the minimum wage in Hong Kong?
HK$43.1 an hour, up from HK$42.1, with a single rate covering the whole territory and no district or small-employer variation. Professional salaries clear it easily, so its practical relevance is to part-time offers and to the parallel threshold of HK$17,600 a month, below which an employer has to record the total hours each employee works.
How much notice do I have to give an employee in Hong Kong?
A month where the contract is silent, at least seven days where the contract sets its own period, and nothing at all during the first month of probation. Wages in lieu of notice are calculated on average wages over the preceding 12 months. The constraint that bites is not the length but the list of situations where dismissal is barred, such as paid sick leave or a notified pregnancy.
Should I use an employer of record or set up a Hong Kong company?
A provider first, then your own company, with the switch arriving at a lower headcount here than almost anywhere else. Registration is quick, the payroll carries one contribution, and there is no withholding to administer, so the fixed cost of a company is low against a fee that scales with every head. Run the crossover at two or three employees, and expect ongoing administration either way.