What do I need to do as an employer with regards to my tax obligations?
A. Keep comprehensive payroll records for every employee, for at least 7 years.
B. Report the remuneration paid to each employee, including: housing allowance, travel
expense, training reimbursements, etc.
For further details, please refer to the Inland Revenue Department.
Is there statutory reporting of submission required for all new employees?
Yes, there is. You must file one copy of IR56E within 3 months of the commencement of employment, if you anticipate that the employee is likely to be charged salaries tax. The threshold for this is currently an annual income of $120,000.
What is the statutory reporting of submission required for a terminated employee?
You must file one copy of IR56F one month before the date of termination of their employment. Or, file one copy of IR56G in the case of an employee leaving Hong Kong with no plans to return.
For further details, please refer to the Inland Revenue Department.
Can you tell me what MPF is?
The Mandatory Provident Fund (MPF) is a compulsory pension fund designed by the Hong Kong government as means of income protection for retired residents. Most employees and their employers are required to make monthly contributions.
What are the mandatory MPF contribution amounts that I must pay?
Employees and employers are both required to make regular mandatory contributions at a rate of 5% of the employee’s income. This amount is subject to the minimum and maximum relevant income levels. For an employee who is paid on a monthly basis, the minimum is $7,100 and the maximum is $30,000.
Should the monthly income be less than $7,100, then only the employer needs to make a 5% contribution. For monthly income in excess of $30,000, the contribution paid by both the employee and employer, will be fixed at $1,500 regardless of the amount.
For further details, please refer to the Mandatory Provident Fund Schemes Authority.
