Frequently Asked Questions

In Hong Kong, a salary is your base wage—it’s guaranteed and forms part of your statutory minimum. An allowance (like transport or meal allowance) is additional pay but may not count toward severance or long service leave calculations unless it’s a regular part of your employment contract. Understanding this matters because it affects how much you owe in MPF contributions and statutory entitlements.

Not everyone. Employees under 18 or over 65 are exempt, as are those earning less than HK$30,000 per month (as of 2024). If you have a workforce with casual or part-time staff, you’ll need to check each person’s eligibility separately—it’s a common area where employers slip up.

MPF is straightforward—it’s 5% of eligible salary (capped at HK$30,000 per month), split between you and your employee. Tax is trickier because it depends on their total annual income and deductible allowances. That’s why many employers use payroll software or get professional help. Getting it wrong costs you penalties and puts your staff in an awkward position come tax season.

Unused statutory leave (annual leave, sick leave) must be paid out when they go, but the amount depends on their contract and how long they worked for you. If they’re entitled to long service leave after 10 years, that gets paid too—often a significant payout that catches employers off guard. The Employment Ordinance is strict on this, so it’s worth tracking leave carefully from day one.

Keep payroll records, timesheets, leave records, and MPF contribution statements for at least 7 years. The Inland Revenue Department can ask for these during an audit, and the Labour Department inspects them too. Poor record-keeping is one of the fastest ways to rack up fines—we’ve seen employers penalized thousands just for missing documentation.

It varies. Full-time staff, part-time, casual, and probationary employees all have different leave entitlements and statutory rights. Directors and foreign nationals have special rules too. That’s why a one-size-fits-all approach fails—you need a system that flags these differences so you don’t accidentally short-change someone or overpay.