SALARY PAYMENT IN Hong Kong Dollars (HKD, $)
CONTRACT LANGUAGES Chinese & English
PAYROLL TAX 5% + 1,500 HKD
PAYROLL CYCLE Monthly
TIME TO HIRE 12 hours
Hire and pay talents
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Horizons assists companies to quickly expand into Hong Kong, without the burden of establishing their own local entities. Employees are hired through our Hong Kong PEO, which ensures compliance with relevant Hong Kong labor regulations. As the exclusive Hong Kong Employer of Record, we take on legal liabilities as the official employer. This enables you to focus on the day-to-day operations of your business, while maintaining control over your workforce.
Hire in Hong Kong, and pay employees through our platform or app.
Our Hong Kong PEO solution is the most affordable on the market.
Fast onboarding in Hong Kong, hire in as little as 12 hours.
We draft labor contracts compliant with Hong Kong labor law.
We administer all mandatory benefits and contributions in Hong Kong.
It doesn’t stop with Hong Kong — we are an international PEO
|Probationary period||6 months|
|Termination notice period||7 days minimum, 30 days standard|
|Severance||2/3 monthly salary per year of service if contract not renewed or if terminated early|
|Probationary period||6 months|
|Termination notice period||7 days minimum, 30 days standard|
|Severance||2/3 monthly salary per year of service|
Although employment contracts in Hong Kong can be oral or written, it is best practice for both employers and employees to utilize written contracts for all work arrangements. Written contracts should be drafted – either in English or Mandarin – and clearly state the terms of employment. These terms should include the employee’s job description, their responsibilities, and the compensation and benefits attached to the role.
In Hong Kong, an offer letter and employment contract should always outline compensation amounts in Hong Kong dollars (HKD). Horizons can assist you you to draft employment contracts, either through our Hong Kong PEO or your own local entity.
When you engage our Hong Kong PEO solution, Horizons will hire and onboard your staff in Hong Kong, and facilitate all employment contracts in compliance with Hong Kong legislation.
In Hong Kong, there is no set legislation that governs working hours per week. However, there is a requirement that employees be granted one rest day every seven days.
Quick, compliant hiring in 12 hours—no subsidiary required.
Hong Kong has a range of national public holidays that are celebrated annually. In 2023 these holidays are:
|1 Jan Sunday||New Year’s Day|
|2 Jan Monday||New Year’s Day observed|
|22 Jan Sunday||Lunar New Year’s Day|
|23 Jan Monday||Second Day of Lunar New Year|
|24 Jan Tuesday||Third Day of Lunar New Year|
|25 Jan Wednesday||Fourth Day of Lunar New Year|
|5 Apr Wednesday||Tomb Sweeping Day|
|7 Apr Friday||Good Friday|
|8 Apr Saturday||Holy Saturday|
|10 Apr Monday||Easter Monday|
|1 May Monday||Labour Day|
|26 May Friday||Buddha’s Birthday|
|22 Jun Thursday||Dragon Boat Festival|
|1 Jul Saturday||Hong Kong Special Administrative Region Establishment Day|
|30 Sep Saturday||Day after Mid-Autumn Festival|
|1 Oct Sunday||National Day of the People’s Republic of China|
|2 Oct Monday||National Day of the People’s Republic of China observed|
|23 Oct Monday||Chung Yeung Festival|
|25 Dec Monday||Christmas Day|
|26 Dec Tuesday||First Weekday After Christmas Day|
Employers and employees working in Hong Kong are legally required to contribute monthly amounts to the employee’s Mandatory Provident Fund (MPF). The Hong Kong government requires a minimum contribution of 5%, with additional supplementary benefits being negotiated during the initial employment contract agreement.
In Hong Kong, there are two modes of tax calculation: The standard tax rate and the progressive rate. Annual taxation is calculated in one of these two rates and the employee pays the lesser of the two amounts. In practice, there are different deductible allowances (not only MPF) as well as a tax rebate.
Any clause (non-disclosure clause, training fee clause, etc.) can be included in the employment agreement. However, any fixed commission structure, bonus incentives, or KPI driven-clauses need to be provided in a separate addendum.
Hong Kong employment contracts are required to state the employees’ responsibilities, compensation details, benefits, grievance procedures, and requirements for termination. All offer letters, compensation details, and documents that refer to an employee’s income should be stated in Hong Kong Dollars.
Horizons’ Hong Kong Employer of Record will ensure that your operations are compliant with local labor laws.
In Hong Kong, employees are permitted to take seven vacation days, after serving an initial period of 12 month’s employment. This rises to a maximum of 14 vacation days, after 9 years of service with the one company. Most employers in Hong Kong offer a minimum of 14 day’s vacation to employees within ‘white collar’ professions. Additionally, senior executives may be granted between three and four weeks vacation per year. Employment legislation in Hong Kong allows employees to take part of their vacation entitlement, when exceeding 10 days. As an example, an employee that is entitled to 15 day’s annual vacation can take 10 day’s vacation, and accept the equivalent payment for the remaining five day’s vacation. Employers are are not allowed to place a cap on the number of days that are carried over. Furthermore, there is no statutory limit. Employers can request employees to take vacations, as long as 14 day’s notice is given.
Employees in Hong Kong are generally granted sick leave allowance, if they have taken at least four consecutive day’s off work. They also need to have a medical certificate and have the required number of paid sick day’s owing.
Paid sick days are normally accumulated at a rate of two days per month of employment for the first year. It is then calculated at a rate of four days per month for each subsequent year. In Hong Kong, no greater than 120 paid sick days can be accumulated.
Sick pay is distributed at a rate that is equivalent to 80% of the average daily wages that have been earned by the employee in the preceding 12 months. If the employee has been with the company for less than a year, this rate is calculated based on the average daily amount that has been earned since commencing employment.
In Hong Kong, it is unlawful for employees to be terminated while on sick leave. The only exceptions are in cases of gross misconduct.
Female employees in Hong Kong receive 14 weeks of paid maternity leave if they meet the following requirements:
The employee must have been with the company for more than 40 weeks before the expected date of delivery, submitted a medical certificate that confirms her pregnancy, and given appropriate notice of her timeline for taking maternity leave. Employees not meeting this criteria are allowed to take up to 10 weeks of maternity leave without pay.
The payment rate for maternity pay is equal to 80% of the employee’s average daily wages over the preceding 12 months.
Fathers are guaranteed five days of paid paternity leave, so long as they provide official documentation of their relationship to the mother and expected child. The father may take this at any time during the period from 4 weeks before the expected date of delivery, up to 14 weeks after the date of birth. The leave may be take in one go, or on separate days.
The common practice in Hong Kong is to grant all employees with a 13th month salary or similar annual bonus. However, this bonus is not mandated by law. During times when the Hong Kong economy is performing well, it is common for the annual bonus to be in the amount of 2-3 months’ salary.
By partnering with our Hong Kong PEO, you can gain insight into the recommended practice for incentivizing workers with monthly and annual bonuses.
Both employers and employees in Hong Kong are expected to provide one month’s notice for impending termination or resignation. During a probationary period, there is no required notice to be given – from either party – within the first month. In subsequent months following the initial month of probation, a 7-day notice period is mandatory.
Severance payments are dispersed to terminated employees if they have been with the company for between two and five years; and their contract was terminated due to redundancy, layoff, or a fixed-term contract not being renewed in the case of redundancy.
These payments are two-thirds of the employee’s average monthly salary, for every year they have worked for the company. Severance packages have a maximum payment limit of HK $390,000. If necessary, employers have the ability to offset these costs by contributing to the employee’s pension fund, rather than paying out money to the terminated employee.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Hong Kong PEO can mitigate risk for foreign companies and provide guidance through this process.
In Hong Kong, compensation laws will generally be determined by your employee’s category. Regulations do not make a distinction between full-time and part-time employees or independent contractors. However, employees that have worked with an organization for more than four weeks are classified within a ‘continuous’ employment category. As such, these employees are subject to separate laws.
In Hong Kong, employee compensation is due at the close of the final day of every wage period. Employers must pay employees either on or before that due date – or no more than seven days past this date.
While not mandatory, it is generally best practice for employers to offer a 13th-month bonus that coincides with the Chinese New Year. There is also the option for employers to include commissions, bonuses, and awards as a component of employment contracts.
In Hong Kong, all employees are able to access the public health care system. Employees do not need to have insurance to access this system and there are no pay deductions. While the public health system provides an excellent level of care, there are often long wait times and few English-speaking health care providers. As such, many employers offer additional health benefits and life insurance. Employers in Hong Kong are advised to budget approximately 20% for supplemental benefits, on top of an employee’s gross salary.
Employees in Hong Kong are assured of seven vacation days per year, when they have worked for an organization for more than one year. Employees are then given an additional day’s vacation every year. However, this stops increasing once an employee has reached 14 day’s vacation, after nine years of service. Employees can elect to receive payment rather than vacation, but only for periods after 10 day’s vacation.
Hong Kong benefit management is crucial for both employees and employers. It enables employees to receive what they are entitled to and ensures that employers maintain compliance with local regulations.
Employers must have a comprehensive understanding of the rules and regulations that govern employment in Hong Kong. As the employer, it is their responsibility to provide employees with guaranteed benefits and supplemental benefits that may be applicable.
Employers need to recognize that Hong Kong benefit management will involve substantial time and costs. There is a need to sign contracts pertaining to supplemental benefits, which often involves significant back-and-fourth travel to Hong Kong. As an alternative, employers can elect to work with a Hong Kong benefit outsourcing company. This will simplify the process, as the outsourcing company will select and manage benefits for your employees.
For foreign employers, it is essential they recognize employment legislation, as it relates to the Hong Kong market. Businesses must comply with standard benefits and compensation restrictions that include minimum wage, working hours, and annual vacation time.
Horizons will help your business to stay compliant with Hong Kong employment regulations. This ensures that all employees receive their entitled benefits and compensation.
For local employees, the on-boarding process can be accomplished within days. Once the client company confirms the employment conditions for staff in Hong Kong, Horizons will prepare the employment contract accordingly.
Upon approval, we arrange for the labor contract to be signed by the employee. This enables employees to commence working as soon as possible.
For international employees, it typically takes around one month to receive approval from the immigration authorities to begin work. The official commencement date will be the date when the visa (sponsored by the new employer) is activated. The contract, with an estimated length, is to be submitted to the immigration bureau.
Upon completion of the immigration process and reception of the authorities approval, on-boarding will be executed in around 7-10 days for the international employee.
With Horizons, you get quick service, transparent pricing, and expert support.
A Hong Kong PEO and a Hong Kong EOR are two types of companies which specialize in providing human resources services to businesses in Hong Kong.
The main difference between a Hong Kong PEO and a Hong Kong EOR is in the scope of their services.
Hong Kong PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a Hong Kong PEO is essentially outsourcing your HR duties in Hong Kong.
Hong Kong EORs actually take over as the legal employer of your employees based abroad. Hong Kong EORs become responsible for labor compliance for your employees in Hong Kong.
At Horizons, we offer both PEO and EOR services in Hong Kong. Get in touch now and let us know what service you are seeking.
A PEO in Hong Kong can feasibly hire both local and foreign nationals to work in Hong Kong.
However, the ability of Horizons to sponsor your foreign national employee in Hong Kong may be limited due to visa quotas practiced in many countries.
Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.
In most cases, Horizons’ Hong Kong PEO can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Hong Kong.
It is possible to get a work visa in Hong Kong. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Hong Kong are limited, however—get started today to secure your employees’ visa spot.