Hire in Hong Kong (China)
Hong Kong (China) PEO &
Employer of Record
Hire & manage teams remotely in Hong Kong (China) without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
Chinese, English
Salary Currency
Hong Kong Dollar (HKD)
Payroll tax
5% + 1500 HKD
Payroll Cycle
Monthly
Time zone
UTC +8
Capital city
Hong Kong
Hire Employees in Hong Kong (China)
The NNRoad Advantage ☺
Pay as you go
Global account manager
Compliance
Fast Onboarding
Foreigner Visas
Platform
Employer of Record in Hong Kong (China)
01.
Candidate Selection
02.
Employee Onboarding
03.
Compliance & Payroll
04.
Payroll Reporting
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Hong Kong (China)
01.
Compliance & Payroll
02.
Payroll Reporting
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Hong Kong (China)
Employee Income Taxes:
There are a number of deductions and allowances that can be used to reduce the amount of income tax payable, including expenses incurred in the course of earning income.
Hong Kong has a territorial taxation system, which means that only income earned in the territory is subject to tax. This means that income earned overseas is not subject to income tax in Hong Kong.
Tax Brackets
6%: 50,000 – 100,000 HKD
10%: 100,000 – 150,000 HKD
14%: 150,000 – 200,000 HKD
17%: Over 200,000 HKD
Sample Calculation
2% * 50,000 = 1,000
6% * 50,000 = 3,000
10% * 20,000 = 2,000
Total = 1,000 + 3,000 + 2,000
Yearly income tax = 6,000 HKD
Employer Costs in Hong Kong (China)
Employer Contribution
In Hong Kong, employers are required to contribute a portion of their employees’ salaries to a Mandatory Provident Fund (MPF) scheme. The amount of the contribution is based on a percentage of the employee’s salary, and is capped at HK$1,500 per month.
The MPF scheme was introduced in 1999, and employer contributions have been steadily increasing since then. For example, in 2009, the employer contribution rate was 5%, while in 2019, it was 10%.
Despite the rising costs for employers, the MPF scheme has been generally well-received by businesses and employees alike. It provides a safety net for employees in case of retirement or other financial difficulties, and businesses can deduct the cost of their contributions
Employee Contribution
Employee MPF (Mandatory Provident Fund): 5% of employee’s gross income calculated on a max of HKD 30,000 per month
Benefits & Insurance in Hong Kong (China)
Pension Fund
The Mandatory Provident Fund, abbreviated as MPF, is a mandatory savings system (pension fund) for Hong Kong residents’ retirement. According to their income and length of work, most employees and their employers are required to contribute monthly to mandated provident fund plans run by licensed private organizations.
Healthcare Insurance
Hong Kong has a well-developed healthcare system and social security network. Healthcare in Hong Kong is primarily delivered through the public hospital system, which is overseen by the Hospital Authority. There are also a number of private hospitals and clinics in operation.
In terms of social security, the government provides a safety net for residents who are unable to work due to illness or injury. The Social Security Allowance is available to those who meet certain eligibility criteria, and it provides financial assistance to help with living expenses.
While the public healthcare system in Hong Kong is comprehensive, it can be expensive for residents who do not have health insurance. For this reason, many people choose to take out private health insurance plans. These plans typically cover things like hospitalization, surgery, and outpatient care.
There are a number of insurance companies operating in Hong Kong, so it is important to shop around and compare plans before making a decision. It is also worth checking to see if your employer offers any health insurance benefits.
In summary, healthcare and social security are both important considerations for residents of Hong Kong. Having health insurance can help to offset the costs of medical care, and being aware of the social safety net can provide peace of mind in case of illness or injury.
Working Hours in Hong Kong (China)
Working Hours Per Week
There is no standard working hour limit in Hong Kong; It can be freely agreed by labor and management.
Overtime
According to the Labour Department of Hong Kong, overtime pay is calculated based on an employee’s “standard hours of work”. Standard hours of work are the hours that an employee is contracted to work in a week. For example, if an employee’s standard hours of work are 40 hours per week, then any hours worked beyond those 40 hours would be considered overtime.
Overtime pay in Hong Kong is calculated at 1.5 times the employee’s hourly rate for the first 8 hours of overtime work, and 2 times the employee’s hourly rate for any overtime work beyond 8 hours.
There are a few exceptions to this rule. For example, if an employee works on a public holiday, they are entitled to 2 times their hourly rate for the entire day, regardless of how many hours they actually work.
Termination Laws in Hong Kong (China)
Severance
In Hong Kong, the law provides for severance pay in cases of employment termination. The amount of severance pay is calculated based on the length of service and salary. For employees with less than 2 years of service, they are entitled to 1 month’s salary. For employees with 2-5 years of service, they are entitled to 2 months’ salary. And for employees with more than 5 years of service, they are entitled to 3 months’ salary. If an employee is terminated without cause, they are also entitled to a notice period and/or payment in lieu of notice, which is calculated based on their length of service.
There are some exceptions to these general rules. For example, if an employee is terminated due to redundancy, they are entitled to a severance payment of 4 weeks’ salary for each year of service. If an employee is terminated due to misconduct, they are not entitled to severance pay.
The law also provides for certain protections for employees who are terminated. For example, an employee cannot be terminated without cause within the first 2 years of employment unless there is a valid reason such as redundancy or Misconduct. After 2 years of employment, an employee can be terminated without cause by giving 1 month’s notice or 1 month’s salary in lieu of notice.
If you have been terminate your employment, you should check your employment contract to see if you are entitled to severance pay and/or notice period and/or payment in lieu
Notice Period
Both the employer and the employee have a seven-day notice period after the first month of work. In other cases, one month’s notice or as agreed shall be given.
Employment Contract in Hong Kong (China)
Employment Contract
A contract of employment can be ended for a variety of reasons, including resignation, employer dismissal, constructive dismissal, the end of a defined term, or mutual agreement.
Termination without cause is generally possible in Hong Kong. But there are reasons where it is illegal to terminate the employment contract:
Probation Period
A probationary period in Hong Kong usually lasts from 1 to 3 months. During the probation period, an employer may limit remuneration by offering a percentage of the normal salary for the position. The pay must not be less than the HK$40 per hour minimum wage.
Types of Leaves in Hong Kong (China)
Annual Leave
Based on the Employment Ordinance, Cap. 57, employees under a continuous contract with at least one year of service are eligible for up to 14 days of paid annual leave, depending on their length of service. Employers frequently grant expanded contractual leave in addition to the statutory minimum.
Sick Leave
For each completed month in the first 12 months of work, the employee can have 2 days paid sick leave. The daily rate of sickness allowance is equal to 80% of an employee’s average daily salary in the 12-month period prior to the first day of sickness. The calculation is based on the shorter term if an employee has been hired for less than 12 months.
Maternity Leave
The maternity leave legislation in Hong Kong offer for ten weeks of paid leave if the mother has completed the following:
Paternity Leave
Employees must be employed for minimum 40 weeks before having access to paternity leave. The paternity leave consists of 5 days leave paid at 80% of the salary.