Hong Kong PEO Services

Hiring using Hong Kong PEO Services

In Hong Kong, it is a requirement to hire any employee to work in Hong Kong through a Hong Kong company and comply with the relevant Hong Kong regulations. Hiring using FastLane HR’s Hong Kong PEO services can save you the hassles of going through all the formalities but still comply with the local regulatory requirements. Our Hong Kong PEO service is also an option for international companies without any legal entity is Hong Kong.

Employment Contracts in Hong Kong

Employment contracts in Hong Kong can be made either orally or in writing. A written contract is the normal practice to avoid or reduce disputes. An employment contract must clearly indicate the terms of the employee’s compensation, benefits, and termination requirements. By engaging FastLane HR’s Hong Kong PEO service, we can customize an employment contract that suits your business.

Working Hours

The Hong Kong laws do not restrict the number of working hours per week, but it is a requirement that all employees should have at least one day off every week.

Holidays in Hong Kong

In 2022, the total number of statutory holidays in Hong Kong is 13 days, including:

January 1^st
Lunar New Year’s Day
the second day of Lunar New Year
the third day of Lunar New Year
Ching Ming Festival
Labour Day, the first day of May
Tuen Ng Festival
Hong Kong Special Administrative Region Establishment Day, being the first day of July
The day following the Chinese Mid-Autumn Festival
Chung Yeung Festival
National Day October 1^st
Chinese Winter Solstice Festival or Christmas Day (at the option of the employer)
Buddha’s Birthday – May

Please note that the number of statutory holidays will increase progressively starting from 2022 by adding one statutory holiday every two years until 2030. Here are the planned statutory holidays that will be applied in the future:

The first weekday after Christmas Day – December 2024
Easter Monday – April 2026
Good Friday – April 2028
The day following Good Friday – April 2030

The law allows employers to ask their employees to work on statutory holidays. However, the employer must arrange for an alternative holiday 60 days before or after the specific statutory holiday and notification must reach the employee no less than 48 hours before the alternative holiday. In addition, employees should have the next working day as a day off if the holiday falls on Sunday. Salary compensation should not be used as a substitute for any statutory holiday.

Vacations Days in Hong Kong

According to Hong Kong laws, every employee in Hong Kong has at least 7 vacation days after one year of work. After three years of service, the number of vacation days received by employees will increase progressively by adding one day per working year, to a maximum of 14 days. Employers can also ask employees to take vacation if they give 14 days’ notice. Many employers in Hong Kong offer more vacation days to their employees than the statutory requirements.

Hong Kong Sick Leave

In Hong Kong, paid sick days will be awarded at a rate of two days per month for the first working year and four days per month for each year thereafter. Each employee can accumulate paid sick days up to a maximum of 120 days. Employees are entitled to statutory sickness allowance if they have taken at least four consecutive days of sick leave, have a medical certificate and have accumulated sufficient statutory sick leave.

The rate of sick leave allowance is four-fifths of the average daily wage received by employees in the last 12 months or the period since being hired (for employees who have not worked for 12 months). Employer are not allowed to fire the employee due to sick leave unless there is gross misconduct.

Maternity/Paternity Leave in Hong Kong

The following are the requirements for an employee to get 14 weeks’s paid maternity leave:

Has worked more than 40 weeks before the date of the scheduled leave and
Has given notice of her intention to take leave and
Has presented a medical certificate with an estimated date of confinement

The rate of maternity pay is four-fifths of the average daily wage received by the employee in the last 12 months or the period since being hired (for employees who have not worked for 12 months).

If an employee has worked less than 40 weeks before the date of the scheduled leave, she can still receive 14 weeks of unpaid leave on the condition that she has given the notification as referred to above.

In the case of paternity leave, male employees who have worked continuously for 4 weeks or more with at least 18 hours a weeks with the same employer and have given notice to the employer are entitle to paid paternity leave. The employee should notify the employer 3 months in advance of the estimated delivery date of the child his intention to take paternity leave. For some employers, the male employee must write a signed written letter indicating that he is the father of the child. Employees are currently granted 3 days of paternity leave. The paternity leave rate is 4/5 of the average daily wage.

Health Insurance in Hong Kong

The public health care system in Hong Kong is accessible to all Hong Kong residents and relatively affordable. There no payroll deduction for health insurance in Hong Kong. Many employers in Hong Kong offer private medical insurance to their employees.

Hong Kong Supplementary Benefits

Additional benefits in Hong Kong are often health and life insurance. For small companies, they may provide an allowance in lieu of arranging insurance.

Bonus

Although not required by laws, the 13th month and/or discretionary bonus are often provided by employers. For employees with business targets, a commission plan is commonly in place to replace bonus.

Termination/Severance in Hong Kong

The length of notice required to terminate an employment contract is normally stated in the employment contract. Most of the time, notice must be given at least one month in advance before the contract is terminated.

Severance payment will be given to employees who have worked for more than 24 months in a continuous contract with the termination reason either for redundancy, lay off or expired long-term contracts which are not extended due to termination of employment.

For long service payment, the eligible employee must have worked for more than 5 years and the termination reason is one of the following:

The employee is terminated but not due to serious employee misconduct or redundancy
A fixed-term contract was completed and not renewed
Death of the employee
Retirement of an employee who is 65 or older
Employee resigned due to ill health

The amount of severance payment is 2/3 of the employee’s last month salary times the number of years worked. The current maximum amount is HKD390,000 and this amount can be reduced by the employer’s contribution to the MPF fund (pension fund).

Paying Taxes in Hong Kong

Anyone receiving employment and work related income in Hong Kong and/or from a Hong Kong company is required to file an individual tax return every year for the remuneration received from 1 April to 31 March each year. Normally the tax department will issue the tax return to an individual in May each year. The tax return should be filed within 1 month from date of issue. Penalty may apply for late submission. If a tax return is not received, an individual should contact the tax department. The maximum individual tax rate in Hong Kong is currently 15%.