What is salary?
In Hong Kong, salary refers to basic pay and fixed allowances paid to your employees as work performed under a contract of service.
It does not include:
Pension or retrenchment benefits
Reimbursements for food or housing expenses
Other work-related expenses incurred by the employee
When should salary be paid?
Under Hong Kong’s Employment Ordinance, salaries must be paid at least once a month. Employers may also choose to pay at shorter intervals if preferred.
Salaries are to be paid within 7 days after the end of the salary period. Failure to do so is considered an offence and may result in penalties.
Mandatory Provident Fund (MPF)
The MPF is a mandatory retirement savings scheme in Hong Kong designed to provide financial security for employees after retirement.
As an employer, you’re required to enroll new employees to the MPF scheme they are participating in and make mandatory contributions on their behalf.
Key requirements:
MPF contributions apply to employees aged 18 to 64 in Hong Kong earning more than $7100 per month
Contributions are 5% of the employee’s monthly relevant income, subject to min. and max. income levels
Employers must pay both employer and employee share on the 10th day of each month
The employee’s share is deducted from their wages
New employees are exempted from contributions for the first 30 days of employment
Employers can claim tax deduction for the mandatory and voluntary contributions made for an employee, capped at 15% of the employee’s total emoluments.
For full details on eligibility and exemptions, visit the MPF website
Monthly pay records
Employers are required to provide each employee with a monthly pay-record within 7 working days of making MPF contributions.
Information to be included:
The employee’s relevant income
The amount of mandatory contributions made respectively by the employer and the employee
The amount of voluntary contributions (if any) made respectively by the employer and the employee
The date on which the contributions were paid
For more details, visit the the MPF website
Employee Tax Filing
Employers in Hong Kong must report employee income details to the Inland Revenue Department (IRD) annually.
Required forms:
Form BIR56A: Employer’s Return (covers all businesses, whether they have employees or not).
Form IR56B: Reports employee’s remuneration for the previous tax year (submitted annually with BIR56A).
Form IR56E: For new employees, to be submitted within 3 months of their employment start date.
Submission methods:
Electronic filing
Employers can submit forms via eTAX or the IRD’s Employer’s Return e-Filing Services.
Hardcopy submission
Employers to provide a hard copy of Form IR56B to employees for their tax filing.
For foreign employees leaving Hong Kong, employers must file Form IR56G to IRD at least one month before the employee’s expected date of departure.
For official forms and detailed filing guidelines, visit the IRD website
Payroll records requirements
Under the Employment Ordinance, employers must maintain detailed employment records for each employee for at least 12 months, and retain them for an additional 6 months after the employee leaves the company.
What to record:
Employee records
Employee full name
Identify Card or Passport Number
Date of starting and ending employment
Working hours, including duration of meals and breaks
Dates and details of public holidays and leave taken
Salary records
Employee & employer name
Payment date & salary period
Basic salary and allowances
Additional payments (eg. bonuses, overtime)
Deductions (eg. MPF contribution, no-pay leave)
Total net salary paid
For more details, visit the Labour Department website
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