IR56E

What Is Form IR56E?

If you are a business owner operating in and out of Hong Kong, it is essential that you learn what Form IR56E is, and why it must be filed. The Inland Revenue Department (IRD) requires that all incorporated businesses prepare and submit a Form IR56E anytime they hire a new employee to join their company or firm.
Form IR56E is an employer-obligated form that must be completed and submitted within a particular time frame to avoid penalty. The Inland Revenue Ordinance requires that employers complete and submit their Form IR56E for all employees, or face legal litigation or penalties in accordance with section 80(1) of the IRO.

IR56EWhat You Will Learn:

  • What Is Included On A Form IR56E?
  • When Must I Submit Form IR56E?
  • Do I Need To Complete Form IR56E For Freelancers & Contractors?
  • What If I Have Changes To Make For Form IR56E?
  • Helpful Links Regarding Form IR56E For Hong Kong Employers
  • Let Fastlane Help You With Your Form IR56E Needs
1. What Is Included On A Form IR56E?
The standard Form IR56E will include a variety of data on a new hire, including: 
  • Employer’s File Number
  • EmployeeName
  • HKIC No.
  • Sex
  • Marital Status
  • Date of Commencement of Employment
  • Monthly Rate of Fixed Income
  • Place of Residence Indicator
  • Non-Hong Kong Income Indicator
Ensuring that you have an accurate and complete way to collect and submit this information with a standardized form and system will be vital to help you keep accurate records of all employees when they begin. 
Click here to view the form in PDF format.
Click here to see an example of a completed IR56E form for reference.
 
2. When Must I Submit Form IR56E?
Form IR56E must be completed and submitted to the IRD within the first three months of a new employee’s hiring. 
 
It is important to note if the employee will be charged under the Salaries Tax as part of their employment, as this will require you to complete and file Form IR56E for that staff member.
 
Form IR56E is a required form for the commencement year.
 
3. Do I Need To Complete Form IR56E For Freelancers & Contractors?
A common question regarding Form IR56E is whether or not employers must file one for contracted workers or freelancers. 
 
The IRD has a separate form – Form IR56M – that tracks data on non-employee paid individuals. For those who are not employees that are charged under the Salaries Tax, the company will not be required to file and submit a Form IR56E.
 
4. What If I Have Changes To Make For Form IR56E?
If you find that you need to make changes or amendments to any information reported on a Form IR56E, you can create and submit a replacement form. Include in the replacement form the updated or corrected information, along with the date that the new information is being submitted. This will ensure that all documentation with Form IR56E is accurately completed.
 
5. Helpful Links Regarding Form IR56E For Hong Kong Employers
The IRD maintains plenty of helpful information to help employers learn more about the Form IR56E and filing process. To learn more about Form IR56E, click any of the links below to visit the IRD HK website:
 
6. Let Fastlane Help You With Your Form IR56E Needs
Ensuring that you are completing all Form IR56E information for current and new employees is a vital step in helping your Hong Kong business flourish. Failing to file the accurate information on time can leave you with outdated information and potentially costly fees and penalties.
If you are looking for help in preparing your Form IR56E and other Hong Kong business forms, Fastlane is ready to help your business bring together the necessary information to track all of your employees with an innovative financial payroll service. Our team will work closely with your business to collect all necessary information and documentation and prepare all files to be submitted to the IRD for proper accounting.
Contact Fastlane today to learn more about how to prepare all of your necessary documentation – including Form IR56E – today! Click here to check out the other forms FastLane can help you with!
713 Ordinance

What Is The 713 Ordinance In Hong Kong?

Implemented on July 13, 2007, the Employment (Amendment) Ordinance is a set of legal guidelines that determine a specific employee’s statutory entitlements in Hong Kong. The name 713 Ordinance comes from the date the ordinance came into effect – July 13, 2007. The ordinance covers eight key statutory entitlements for employees that ensure they are compensated properly for their work across a variety of circumstances.
In this article, we will break down the 713 Ordinance, and how you can ensure that your Hong Kong company stays compliant with the help of a professional team.  

713 OrdinanceWhat You Will Learn:

  • What Are The 8 Key Statutory Entitlements?
  • How To Calculate 12-Month Average Wage
  • Are There Exceptions To 713 Ordinance Wages?
  • What Are The Penalties Of Not Holding To The 713 Ordinance?
  • Stay Compliant With The 713 Ordinance With Fastlane
1. What Are The 8 Key Statutory Entitlements?
The 713 Ordinance ensure that Hong Kong employees receive eight key statutory entitlements:
  • Holiday pay
  • Annual leave pay
  • Sickness allowance
  • Maternity leave pay
  • Paternity leave pay
  • End of year payment
  • Payment in lieu of notice
  • Amounts for non-compliance with an order of reinstatement due to unreasonable and unlawful dismissal
The amounts due to employees based on these statutory entitlements can vary depending on one’s wages. With various employees making different wages, it can be easy to find yourself with incorrect statutory entitlement calculations for employees. 
2. How To Calculate 12-Month Average Wage?
To ensure that your HK business is following the 713 Ordinance entitlements, it is important to properly calculate your employee’s 12-month average wage. The Average Daily Wage (ADW) can then be used to calculate statutory entitlements.
To calculate ADW:
((Total wages earned in a 12-month period) – (Total earnings for days with less than full wages))

_________________________________________________________________

 (Days in the 12-month period) – (Days with less than full wage)
By calculating this amount for every employee, and then taking into account the eight statutory entitlements for each, you can ensure that you are paying and providing for each employee in such a way that you are compliant with the 713 Ordinance.
3. Are There Exceptions To 713 Ordinance Wages?
There are exceptions to what can be considered wages – and therefore fall under 713 Ordinance entitlement:
  • Retirement scheme contributions
  • Discretionary bonuses
  • Directly reimbursable travel expenses
  • Employer-provided accommodation, education, food, or medical care
4. What Are The Penalties Of Not Holding To The 713 Ordinance?
Hong Kong companies that do not follow the guidelines set forth in the 713 Ordinance can face legal scrutiny, public embarrassment, and potential litigation.
Stay Compliant With The 713 Ordinance With Fastlane
The process of staying compliant with the 713 Ordinance is incredibly important for Hong Kong companies. While the calculations can be relatively simple, ensuring that all aspects of your business are following the ordinance properly can be exhaustive.
The key to ensuring that your company is following the 713 Ordinance and staying legally compliant is to partner with a financial expert. At Fastlane, our team of Hong Kong financial experts are experienced at helping companies follow employee statutory guidelines for pay. 
The solutions provided by Fastlane can help your business automate your payment systems to stay compliant with the 713 Ordinance. By helping your employees maintain proper protections under the eight statutory entitlements can save you time, money, and growth potential.
FastLane HR can also ensure that your HK company is EAO compliant – helping you upgrade your systems to provide accurate pay and withholdings for employees. With Fastlane, you can ensure that your employees are protected and paid properly – and ensure that your business avoids costly penalties and damage to your reputation.
To learn more about Fastlane’s 713 Ordinance compliance services – and host of other HK business services – contact our team today.
6 tips to reduce staff turnover

6 Tips to Reduce Staff Turnover

6 Tips to Reduce Staff Turnover

Every time an employee quits, it costs their employers time, money and can potentially unsettle your team morale. In consequence, it is more important than ever to look at how to properly manage one’s staff to reduce staff turnover within a company.
If you’re unable to retain staff due to them wanting to retire or move to a new city, then there’s not much that you can really do about that. However, you can retain staff who are feeling undervalued, underpaid, or those who see no progression within your organization.
In this article, we will explain what exactly staff turnover is, why staff turnover happens, and provide some tips on how Hong Kong employers can reduce staff turnover.   6 tips to reduce staff turnover 減少員工流失的6個技巧

What You Will Learn:

  • What is Staff Turnover
  • Why Does Staff Turnover Happen
  • 6 Ways to Reduce Staff Turnover Rates
1. What Is Staff Turnover?
Staff turnover, or also known as the employee turnover rate, is usually defined as the measurement of staff who leave a business during a specific time period. Typically, the results take into account one whole business year.
2. Why Does Staff Turnover Happen?
There are many reasons why employees of a company may choose to leave. However, below are some of the most common reasons for why staff turnover does happen:
  • Lack of training, support, or resources necessary for employees to complete their job responsibilities
  • Poor management from their supervisors
  • Unable to fit in with the business culture
  • Lack of career advancement opportunities
  • Feeling overworked/burnout
  • Toxic work environment
  • Receiving a competitive offer from another company
  • Lack of work-life balance
Understanding the causes of employee turnover can help employers implement the necessary changes to reduce staff turnover and maintain a strong roster of staff. However, simply understanding these causes may not always be enough – in many instances staff turnover can be reduced through taking action!
3. 6 Ways to Reduce Staff Turnover Rates
To Retain Staff, You Must Encourage Ideas
Reduce staff turnover by creating a workspace environment in which your employees feel that their employer appreciates both their ideas and their perspectives.  Employers should encourage their staff to present new and innovative ideas, and of course, regularly asking for staff input is a big part of that. However, one should always remember that even bad ideas should be met with respect. You’ll find that by simply listening, you’ll lower your employee turnover rate by making sure that everybody feels valued and respected.
Show You Care Through Supporting Development
Personal development is key when it comes to lowering employee turnover. When you show your staff that you care about their path inside (or even outside) your company, you’ll be able to promote feelings of empowerment within. To retain staff, ensure that you show support, contribute to aspirations, and make them feel valued at all times.
Promote From Within
When you choose to promote from within, it really shows your employees that all of their efforts do matter. Imagine you’re in a position where you’ve been working months for a promotion, just for your boss to tell you that the very position you were aiming towards has been filled by an outsider? How disheartened would you feel? Make sure that you’re always leading by example, and encourage staff retainment by showing everyone that hard work really does pay off.
Avoid Micromanagement, Allow Freedom
Some of your most valuable staff will exceed in tasks given to them thanks to their skills, creativity, and communication. That’s how they thrive best, and that’s why it’s essential to give them as much creative freedom as possible. Give them the power to be themselves and pursue new ideas alone. In order to succeed in reducing staff turnover, micromanagement needs to become a thing of the past.
Pay What They’re Worth
What’s it worth to your company when it comes to retaining staff that add value? Obviously, they’re making you money, if they weren’t then you wouldn’t be so worried that they might leave. So, why wouldn’t you pay them what they’re worth? After all, if you don’t, somebody else will.
Make Their Lives Easier
While the primary responsibilities of employees is to manage their job responsibilities, they are also responsible for ensuring that they follow their employer’s internal HR procedures! Aspects such as claiming varying types of leave, filing expense claims and reporting their salary tax obligations are also expected of staff. However, sometimes managing these responsibilities can be tedious, especially after a full day of work.
Employers should consider reaching out to a professional HR advisor who has experience with various cloud-based HR / payroll solutions – business tools that can make the lives of employees easier when managing these responsibilities.
HR advisors often utilize such business tools as they offer a diverse range of benefits not commonly found in traditional payroll systems. Very simply put, these tools provide increased efficiency, improved financial control and allows staff to spend more time on business driving activities. For example, platforms such as Workstem are catered to local Hong Kong companies and allow their users to manage their staff in accordance with all of Hong Kong’s local legislation!
How Fastlane Can Help
Let’s face it, valuable employees don’t grow on trees. Businesses around the world spend a lot of time and money when it comes to finding the right people for the job. Learning the strategies required to reduce staff turnover has always, and will always, continue to be a necessity.
The FastLane Group are professional HR advisors. Not only can we help employers improve their internal HR processes, but our knowledge of Hong Kong’s Employment Ordinance means that we have the expertise to help you manage your statutory obligations as a Hong Kong employer. We are also a dedicated Hong Kong based payroll and HR services specialist and serve a broad spectrum of SMEs which includes both local and foreign organisations.  We ensure that every aspect of your business complies with current regulations and ordinances. Please contact us for enquiries!
payroll account

What Is Payroll Accounting?

What Is Payroll Accounting?

If you are running a business in Hong Kong, you need an effective accounting system. One of the hallmarks of a business accounting solution is payroll account.
With payroll accounting, you can ensure that every member of your team is paid properly and on time. Not only can you ensure that your team members are being paid the amount they are due each pay period, but a payroll accounting system or team will also make sure that your employee payments include the proper withholdings and deductions.
Read on to learn more about payroll accounting, and how the team of professionals at Fastlane can help your company boost its effectiveness and efficiency with high-level payroll accounting.

payroll accountWhat You Will Learn:

  • Why Should My Company Use Payroll Accounting?
  • What Are The Benefits Of Separating A Bank Account For Payroll?
  • What Do You Need To Set Up Employee Payroll Accounts?
  • Take Care Of All Your Payroll Accounting Needs With Fastlane
1. Why Should My Company Use Payroll Account?
When paying employees, it is essential that you have your information correct and your processes in order. 
With a robust payroll accounting system, you can handle all of your payroll needs in one location. This will likely include the payment of employees on a fixed schedule, as well as automation that will ensure the proper amounts are paid depending on the wage hours. 
Payroll accounting is also essential for helping withhold amounts for various employee benefits, as well as ensuring that the right amount of taxes are withheld for each team member.
2. What Are The Benefits Of Separating A Bank Account For Payroll?
To help ensure that all data is kept clean and clear, most companies will keep their employee payroll operating through a separate bank account.
This will allow for companies to ensure that the records for payroll accounts are located in one convenient location, and will help avoid potential overlaps of account payments or overdrafting on an account due to unexpected expenses.
3. What Do You Need To Set Up Employee Payroll Account?
When it comes to setting up payroll accounts for your staff and employees, there are several steps you must take.
Employee Information The first set of documentation you will need to set up an employee’s payroll account is their employee information. This can include their personal information as well as a set of verifiable personal identification. 
Most companies require their employees to fill out paperwork to give the company information regarding their person, as well as the amount of money they wish to have withheld for any tax or benefit considerations. It is advised that a company go over employee withholdings every year to ensure the right amount is being withheld.
Wage Information The next set of data you will need to set up an employee payroll account is the particular wage information for that employee. This will include the employee wage identification. Is the employee a full-time salaried employee, or are they part-time? Do they receive contractor or freelance compensation?
Knowing the employee’s wages and how they are identified in the payroll system will help ensure that they are paid properly. You can also make sure you are providing them any necessary statutory entitlements that amendments such as the 713 Ordinance require.
4. Take Care Of All Your Payroll Accounting Needs With FastLane
Are you looking for a payroll accounting solution that is tailored to your business’s unique needs? At Fastlane, our team of accounting professionals are experienced in helping HK businesses of all sizes ensure that their employees are set up with a robust payroll solution. 
FastlaneHR can help you develop a payroll solution that is designed to help your company automate payments and process the proper taxes and withholdings. With an all-in-one solution that is built to your company’s unique needs, you can trust that your payroll is set up for all employees.
Payroll Service Provider

How To Choose A Good Payroll Service Provider

How To Choose A Good Payroll Service Provider

If you want to free yourself up from having to manage payroll and all that the role entails, you should consider hiring the services of a payroll service provider. A high-quality payroll service provider will have the experience and expertise to help your business succeed with payroll – and a variety of other services.
In this article, we will break down the role of a payroll service provider, and how you can find the right provider for your business needs.   Payroll Service Provider

What You Will Learn:

  • What Is A Payroll Service Provider?
  • What Services Does A Payroll Service Provider Offer?
  • How To Choose The Right Payroll Service Provider For Your Needs
  • Trust Fastlane With Your Payroll Service Provider Needs
1. What Is A Payroll Service Provider?
In essence, a payroll service provider is a team or company that handles all of a business’s payroll process. These services can include the calculation of payroll for full-time, part-time, and contracted workers.
The services of a payroll service provider extend far beyond simply processing wages. Most providers offer services that include payroll tax statements, reporting for year-end taxes and much more. 
Payroll service providers can give business owners peace of mind as they trust that their employees are paid accurately and on time, and their tax considerations are well handled.
2. What Services Does A Payroll Service Provider Offer?
A true full-service payroll provider will help your company with a variety of financial services and processes. These services may include, but aren’t limited to:
  • Payroll calculations
  • Deposit & Withdrawal Services
  • Tax Withholding & Garnishment Payments
  • New Hire Reporting & Financial Processing
  • Time & Attendance Tracking
  • Benefits Reporting & Calculations
You will also want to ensure that your potential payroll service provider offers services that will help you manage tax preparation as related to full and part-time employees.
3. How To Choose The Right Payroll Service Provider For Your Needs
When it comes to choosing the right payroll service provider for your company, there are several considerations to take into mind:
Cost The first question that many business owners ask is “How much does a payroll service provider cost?” You will want to ensure that a payroll service provider fits into your company’s operating budget. 
You will likely find that a payroll service provider’s services will vary depending on the services they offer. However, when it comes to a provider that offers payroll services – and more – you can’t afford not to hire one!
Company-Specific Services Another consideration to take into account is how your business is structured. Do you have full-time and part-time employees? Are you in the business of hiring contractors or freelancers for various jobs?   Your payroll service provider should have the expertise to handle the unique circumstances of your business, and ensure that you are equipped to pay everyone accurately and on time.
Powerful Digital Services Another must-have of a payroll service provider is digital capabilities. This is even more essential if your company operates remotely or has team members in various parts of the globe.   Try to find a payroll service provider that uses digital cloud systems to handle your payroll services efficiently online. With most payroll service provider solutions, calculations are automatically made through sophisticated algorithms that note how much employees should be paid each pay period. These systems should account for elements such as shift differentials, holiday and overtime pay, taxes, and more.
Trust Fastlane With Your Payroll Service Provider Needs
Are you ready to take your payroll to a new level? Hiring a team of experienced and skilled payroll service providers can help your business function effectively and efficiently.
At FastlaneHR, we are proud to offer a suite of payroll services that will help your business keep the team happy with fast and accurate payroll services. Our team at Fastlane has the experience and expertise necessary to keep your payroll and other services moving smoothly. If you are looking for a high-quality payroll service provider that companies trust, contact Fastlane today.