Expand your business into Macau - without an entity
Horizons provides global employment solutions for businesses wanting to hire employees and distribute payroll in Macau. Through our Macau PEO and EOR, we manage your company’s payroll, benefits, and expenses in Macau. Additionally, we oversee HR duties, as well as employment and tax compliance.
Horizons will act as your employees’ Employer of Record, which means you can begin doing business in Macau without a local entity. This not only allows your business to go to market faster, but also has the potential to save your business thousands in expansion costs.
As the only Macau PEO with an in-house recruitment team, Horizons will source, hire, and onboard your Macau workforce. We hire employees in accordance with Macau’s labor regulations and coordinate all expense claims and benefits payments. Although we act as your employees’ Employer of Record, you still maintain full autonomy and control over all employees.
Our Macau PEO simplifies your expansion
Horizons enables your business to expand its operations into Macau – without setting up a legal subsidiary.
Horizons ensures day-to-day guidance to help your business navigate Macau’s labor laws and regulations. We also provide mandatory monthly payroll requirements, and absorb all local employment liabilities. Partnering with our Macau PEO is the quickest and most cost-effective way to enter the Macau market.
Employment & Labor Laws in Macau
📝 Macau employment contract types
In Macau, it is not mandatory for all employment contracts to be drafted in writing. However, contracts must be written if they are executed with non-resident workers. This is because these contracts must contain the identification and signature of each party.
Even when employment contracts are not required to be in writing, best practice dictates that the agreement be clearly written – to establish the roles and responsibilities of both the employer and employee.
Employment contracts with non-resident workers must have a fixed term and be drafted in writing. They are required to contain the following information:
- Complete identification of both parties
- Address of both parties
- The professional category of the worker, or the specific duties the employee will be required to complete
- Place of work
- Normal working hours
- Execution and effective date of the contract
By partnering with our Macau PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.
⏰ Working hours in Macau
In Macau, the standard work day is eight hours. Employees typically work six days per week, meaning that a standard work week is around 48 hours. Depending on the business of an employer, daily work hours can be as much as 12, so long as employees consent to those hours. Macau law requires employers to provide employees with a break of at least 30 minutes, for every continuous five hours worked.
Overtime work in Macau is considered as work required beyond normal working hours. Both parties will typically agree to overtime, although there are some exceptions when the employer may require overtime without the employee’s consent. This could be in the event that an employer confronts an instance of force majeure, in which they are facing a considerable loss. Employee-consented overtime is paid at a rate of 120% of the base pay, while forced overtime is paid at a rate of 150% of the base pay.
Employees in Macau are entitled to one day of paid rest per week. However, parties can agree that the paid rest days occur at different frequencies. Employees may receive a minimum of six day’s paid leave, after one year of service. For contracts longer than three months, employees may take half a day off for every month of service completed.
📅 Holidays in Macau
New Year’s Day
Lunar New Year’s Eve
The second day of the Lunar New Year
The third day of the Lunar New Year
Lunar New Year Holiday
Cheng Ming Festival
Cheng Ming Festival Holiday
The Day before Easter
The first working day after the Day before Easter
Tuen Ng Festival
Day following Chong Chao Festival, National Day Holiday
National Day Holiday
Chung Yeung Festival
Chung Yeung Festival Holiday
All Souls’ Day
Feast of Immaculate Conception
Macao SARE Day
Macao SARE Day (in lieu)
New Year’s Eve
🏦 Income tax
Resident and non-resident workers are subject to tax on income generated whilst working in Macau. This is a progressive tax between 7% and 12%, with higher tax rates for individuals earning more income. A tax-free annual allowance is first deducted form the pay, which is MOP 144,000.
Under Macau’s tax system, there is no tax on global income. This means that taxes are only payable on the wages that a Macau employer has distributed to employees.
Local employees must be registered with the Macau Social Security Fund. Employers pay MOP90 each month and deduct MOP30 from each resident employee’s salary. The employer is then required to pay MOP200 every quarter, for each non-resident employee.
Employers should maintain records regarding employee compensation and also document employees’ names, tax numbers, addresses, and pay periods. Additionally, employers need to file documentation with the Macau Finance Department by February 28 each year. This documentation should include names and tax numbers of all employees who received wages from the employer within the past year.
🏥 Health insurance
Macau has a universal healthcare, single-payer system. Employers and employees share the costs of funding health care insurance, which is approximately 5% of an employee’s earnings. Expats in Macau are also required to make these contributions.
🏖 Vacation leave
Employees in Macau are entitled to a minimum of six working days of paid annual leave during their second year of company service. If the duration of employment is less than a year but over three months, the employee is entitled to half a day’s leave for every month of service. This is to be taken in the second year of company service.
When the number of days left remaining in a period reaches 15, this is counted as half a day towards annual leave. As an example, an employee that has worked five months and 16 days in one year will be entitled to six half days of paid annual leave in the following year.
😷 Sick leave and justified absences
Employees can take 30 consecutive days, or 45 non-consecutive days off due to sickness in a given year. Six days of this sick leave are paid for by the employer. If an employee is absent because of a sickness or injury related to work, they may be entitled to compensation that is equal to two-thirds of their salary, during the period of absence.
Employees in Macau are entitled to three day’s leave from work in the event that a direct relative dies. This rises to 12 day’s leave if there is a need to provide assistance to a family member.
Additionally, employees are entitled to six day’s leave if they are getting married.
Whilst there are additional absences that may be justified, employees need to provide relevant documentation to the employer, in order to qualify for an exemption.
👶 Maternity and paternity leave in Macau
Female employees in Macau are entitled to 70 day’s maternity leave. Through until May 25, 2023, the minimum employer-paid period remains at 56 days. The FSS will pay 100% of base pay to the employee for up to 14 days (subject to the overall combined cap of 70 days). From May 26, 2023, employers will be responsible for the full 70 days of paid leave. To qualify for the government subsidy, eligible employees must have a minimum of one year’s service with their current employer, prior to the start of leave.
Male employees with a year or more of service are entitled to five working days of paternity leave. These days may be taken consecutively or separately – up to 30 days after the birth of the child.
💰 Termination and severance
In Macau, employees can terminate their employment contracts at any time, but they must give at least seven day’s notice before the termination date. Individual employment contracts may specify a longer period of notice. Employees can choose to be paid in-lieu of working during the notice period.
Macau law provides a distinction between dismissal with and without cause. Dismissal without cause requires at least 15 day’s notice, or longer if the employment contract states otherwise. Payment can be made in-lieu of the notice period. Employees who are dismissed without cause are entitled to redundancy payments. This is based on the number of year’s company service, up to MOP 240,000.
In Macau, dismissal with cause is immediate and employees are not entitled to severance pay or other compensation. The employer must specify in writing the reasons for dismissal, within 30 days of there being grounds for dismissal.
Dismissal with cause is limited to the following reasons:
- Willful disobedience
- Repeated failure to fulfill duties
- Chronic tardiness or leaving work early without authorization
- Unjustified absences from work
- False statements regarding the justification of absences
- Acts of physical violence
- Severe harm to the interests of the business
- Continued provocation of disputes with other employees
- Reduced productivity that has been intentionally caused
- Violation of safety rules
If it is found that dismissal with cause did not have sufficient grounds, employees will be entitled to their rightful compensation.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Macau PEO can mitigate risk for foreign companies and provide guidance through this process.
📃 Work permits
Non-residents of Macau must have a work permit that is issued from the Labor Affairs Bureau. Before any work permit is issued, the employer should obtain authorization from the Chinese government to hire non-resident workers. This permission is granted from either the Macau SAR’s Chief Executive, or another delegated government body.
Hiring non-resident workers should be limited to circumstances where local employees are unable to meet work objectives. The employment of non-resident workers should not result in the termination of resident employees, or a decline in working conditions for resident workers.
The process to obtain a work permit often takes three to four months, from the initial request to hire non-resident workers.