| Key Takeaways |
|---|
| 1. Low progressive income tax ranges from 2% to 17% with no local taxes, making Hong Kong one of Asia's most tax-friendly jurisdictions. |
| 2. Mandatory Provident Fund requires 5% contributions from both employers and employees on income between HKD 7,100 and HKD 30,000 monthly. |
| 3. Hourly minimum wage is HKD 42.10 with monthly payroll cycles and wage payments required within 7 days of the wage period end. |
| 4. Generous leave policies include 14 weeks maternity leave at 80% pay, 5 days paternity leave, and annual leave increasing from 7 to 14 days with tenure. |
| 5. Flexible work arrangements with no statutory standard working hours, overtime regulations, or break period requirements under Hong Kong law. |
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Personal Income Tax
| Taxable Income (HKD) | Progressive Tax Rate (%) |
|---|---|
| Up to 50,000 | 2 |
| 50,001–100,000 | 6 |
| 100,001–150,000 | 10 |
| 150,001–200,000 | 14 |
| Over 200,000 | 17 |
Local Taxes
There are no local taxes on employment income in Hong Kong.
Statutory Contributions
aExpatriates whose employment in Hong Kong is not more than 13 months or are covered by overseas retirement schemes are exempted from making contributions to the Mandatory Provident Fund (MPF). Furthermore, the employee's portion of the contribution to MPF is waived if their income is less than HKD 7,100 per month.
Contributions to the MPF is calculated based on the employee's monthly income of at least HKD 7,100 up to HKD 30,000.
Employer Contributions
| Contribution Rate | |
|---|---|
| Mandatory Provident Fund | 5% |
Employee Contributions
| Contribution Rate | |
|---|---|
| Mandatory Provident Fund | 5% |
Payment of Wages
Wages shall be paid monthly unless otherwise stipulated by the employment contract. In any case, wages shall be paid within 7 days of the last day of the agreed upon wage period.
Minimum Wage
Statutory Bonus
There is no statutory bonus in Hong Kong, though the Employment Ordinance carries a provision for voluntary end-of-year payments.
These payments must be contractual and not be given at the employer's sole discretion, and if no specifics are defined in the contract, it must be paid in accordance with the following rules:
| Stipulations under the Employment Ordinance | |
|---|---|
| Payment Period | A lunar year |
| Time of Payment | Before Lunar New Year's Day |
| Payment Amount | A full month's wage |
Employees who have not been employed for the full payment period, but has been employed for at least 3 months, shall have this bonus prorated. However, any probationary period of up to 3 months is generally excluded from the calculation.
Note: This bonus shall not be paid to employees who are rightfully dismissed without notice or those who resigns voluntarily.
Termination
Either party can unilaterally terminate an employment contract at any time by giving the other party notice, orally or in writing, of their intention to do so. However, unreasonable dismissal will make the employer liable to certain remedial measures.
Notice Period
An employment contract deemed to be a contract renewable from month to month are subject to the following notice period or payment in lieu of notice:
| Notice Period | |
|---|---|
| For contracts with provisions regarding the required length of notice | The agreed period, but not less than 7 days |
| For contracts without provisions regarding the required length of notice | Not less than 1 month |
The notice period for contracts other that the one stipulated above shall be in accordance with the agreed period, but no less than 7 days.
That being said, summary termination of an employment contract can be done if the reasons behind the termination justifies it.
| Reasons for summary dismissal | Reasons for summary resignation |
|---|---|
| The employee willfully disobeys a lawful and reasonable order | The employee reasonably fears physical danger by violence or disease that was not contemplated by their contract |
| The employee misconducts themselves, with such conduct being inconsistent with the due and faithful discharge of their duties | The employee being certified as permanently unfit for the work they are contractually engaged to, provided that they have been employed for at least 5 years |
| The employee is guilty of fraud or dishonesty | The employee is subjected to ill-treatment by the employer |
| The employee is habitually neglectful in their duties | The employer fails to pay wages within a month from its due date |
Severance Pay
Employees may be entitled to either severance payments or long service payments. The determinants of their entitlements are as follows:
| Severance Payment | Long Service Payment | |
|---|---|---|
| Qualifying period of employment | Continuous contract for a period of not less than 24 months | Continuous contract for a period of not less than 5 years |
| Conditions for entitlement | The employee is either dismissed or have their contract not renewed by reason of redundancy, or laid-off. | The employee is either dismissed, resigned due to ill-health or being at least 65 years old, died, or not having an expired employment contract renewed. |
| Conditions for non-entitlement | The employee is summarily dismissed due to their misconduct. Also when the employee unreasonably rejects the employer's offer of contract renewal or re-engagement, provided that the offer is made at least 7 days before the contract's expiry date. | The employee is summarily dismissed due to misconduct or redundancy. |
Both severance pay and long service pay is subject to a maximum of HKD 390,000, and shall be calculated as follows:
| Calculation for entitlements | |
|---|---|
| Monthly-rated employees | For every year of service, the lesser of either 66.67% of the employee's last full month's wage or 66.67% of HKD 22,500 |
| All other employees | For every year of service, the lesser of either any 18 days' wages in the last 30 working days or 66.67% of HKD 22,500 |
Probationary Period
Probationary period usually lasts for 1–3 months, with the actual duration being specified in the individual employment contract.
If the employment contract is terminated within the first month of probation, the terminating party has the right to do so without notice. Otherwise, the terminating party must observe at least a 7-day notice.
Work Time Rules
Standard Working Hours
There are no standard working hours in Hong Kong.
Break Period
There are no statutory break period requirements in Hong Kong.
Overtime
There are no statutory overtime limitations or premiums in Hong Kong.
Weekly Rest Days
Employees under a continuous contract are entitled to at least a rest day per week. Whether these rest days are paid shall be determined by the employee-employer agreement. Furthermore, the exact rest days shall be determined by the employer, provided that if the rest days are not fixed at the same day for every employee, the employer must inform their employees of their rest days before the commencement of each month.
Employees working on their rest days shall be compensated as follows:
| Compensation | Note | |
|---|---|---|
| Compulsory work on rest days | Compensatory rest day within the next 30 days, to be determined by the employer within 48 hours of the work performed | Only allowed if the work is necessary due to a breakdown in machinery or plant, or there are other unforeseen emergencies. |
| Voluntary work on rest days | - | - |
Holiday and Leave Entitlements
Public Holidays
Employees on a continuous contract for at least 3 months are entitled to be paid on public holidays, calculated based on the employee's average daily wages and paid on their regular payday. There are 14 days of public holidays in Hong Kong for 2025.
| Holidays | Date |
|---|---|
| New Year's Day | January 1 |
| Lunar New Year Holiday | January 29–31 |
| Ching Ming Festival | April 4 |
| Good Friday (from 2028)* | April 18 |
| Day After Good Friday (from 2030)* | April 19 |
| Easter Monday (from 2026)* | April 21 |
| Labor Day | May 1 |
| Buddha's Birthday | May 5 |
| Tuen Ng Festival | May 31 |
| Hong Kong SAR Establishment Day | July 1 |
| National Day | October 1 |
| Day after Mid-Autumn Festival | October 7 |
| Chung Yeung Festival | October 29 |
| Christmas Holiday | December 25–26 |
Employees required to work during public holidays must be provided with an alternative holiday arrangement, as follows:
| Alternative Holiday Arrangement | Prior Notice to the Employee |
|---|---|
| Within 60 days before the public holiday | 48 hours' notice before the alternative date |
| Within 60 days after the public holiday | 48 hours' notice before the public holiday |
Annual Leave
Employees under a continuous contract are entitled to paid annual leave for every 12 months of employment. This leave entitlement increases with the employee's length of service, as follows:
| Length of service | Annual leave entitlements |
|---|---|
| 1–2 years | 7 |
| 3 years | 8 |
| 4 years | 9 |
| 5 years | 10 |
| 6 years | 11 |
| 7 years | 12 |
| 8 years | 13 |
| 9 years or above | 14 |
The exact dates of leave shall be determined by the employer in consultation with the relevant employee, with the final decision being made in writing and sent to the employee at least 14 days in advance of the leave.
Generally, annual leave are taken continuously. However, employees may request for the following arrangement:
| For leave entitlements of <10 days | Up to 3 days can be taken separately, while the remaining days shall be taken consecutively |
|---|---|
| For leave entitlements of ≥10 days | At least 7 days must be taken consecutively |
Employees who are entitled to more than 10 days of annual leave may choose to accept payment in lieu of taking their leave in excess of 10 days.
Moreover, if there is any unused leave by the end of the year, the employee may choose to be paid in lieu of the leave not taken or come to an agreement with the employer on the terms for the granting of compensatory paid leave days.
Sick Leave
Paid sick leave can be accumulated throughout the employment period at the following rate of accumulation:
| Rate of paid sick leave accumulation | |
|---|---|
| First year of employment | 2 days per month of employment |
| Subsequent years of employment | 4 days per month of employment |
Sick pay is only given once the employee has taken at least 4 consecutive days off, except for the case of pregnancy-related sickness, and must be fully supported by a medical certificate. The amount of sickness allowance is calculated at 80% of the employee's average daily wage.
In any case, paid sick leave shall not exceed 120 days at any one time. They are distributed as follows:
| Maximum days accumulated | Conditions for entitlement | |
|---|---|---|
| Category I | 36 | Medical Certificate |
| Category II | 84 | Sickness days in Category I has been exhausted |
Maternity Leave
Female employees who are employed under a continuous contract shall be entitled to 14 continuous weeks of maternity leave. While maternity leave commences 4 weeks before the expected date of confinement by default, an employee-employer agreement can be made for employees to take their leave 2–4 weeks before the expected date of confinement.
Maternity pay is only granted to those who are employed under a continuous contract for at least 40 weeks immediately before the commencement of the scheduled leave.
| Conditions for receiving maternity leave pay | Give notice of pregnancy and intention to take maternity leave to the employer after pregnancy have been confirmed by a medical certificate |
|---|---|
| Calculation of maternity leave pay | 80% of the employee's average daily wages for 14 weeks, with the pay for the final 4 weeks of leave being capped at HKD 80,000. |
Note: Employers can make a claim to reimburse the amount paid on the capped portion of their employee's maternity leave pay, provided that it is paid under the Employment Ordinance.
Paternity Leave
Male employees who are employed under a continuous contract immediately before taking the leave shall be entitled to 5 days of paternity leave. This can be taken at any time between the 4 weeks prior to expected date of childbirth and 14 weeks after childbirth.
Employees shall give their employers an advance notice of their intention to take paternity leave 3 months before the expected date of delivery or at least 5 days before intended date of leave.
Those who are employed under a continuous contract for at least 40 weeks immediately before the commencement of scheduled leave are entitled to paternity leave pay at 80% of their average daily wages if they have given their employer the required notice and produce the relevant birth certificate confirming their fatherhood and the date of birth.
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