Employer of Record Services for Hong Kong

Employing in Hong Kong

Famous for being one of the most bustling, cosmopolitan cities in the world, Hong Kong is the place where skyscrapers meet centuries-old temples and where both eastern and western cultures co-exist in a global melting pot. Originally a sparsely populated area of farming and fishing villages, the territory is now technologically advanced and has become one of the world’s most significant financial centres and commercial ports — yet still manages to preserve its rich history.

Hong Kong offers many economic and compliance-related advantages for engaging in cross-border business transactions with the world’s second-largest economy — China. However, thanks to its location in the heart of the Asia Pacific (APAC) region and good connections to other key economic markets such as Singapore, Taipei and Seoul, Hong Kong is also the ideal global expansion destination for companies looking to gain a foothold in other major Asian markets.

The majority of the working population also speaks fluent English, and Hong Kong offers a visa waiver entrance for visitors from more than 170 countries — ideal for facilitating international business and overseas visits to the region.

Our Expertise

Managing a global workforce in Hong Kong

Managing a global workforce in Hong Kong requires a comprehensive understanding of local employment laws and payroll regulations. Companies must comply with the Employment Ordinance, adhere to the Mandatory Provident Fund (MPF) system, and ensure accurate reporting to the Inland Revenue Department. By partnering with TopSource, businesses can efficiently manage payroll, adhere to local compliance requirements, and focus on their core operations, making global expansion into Hong Kong smoother and more reliable.

Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.

Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

Nutreco

See our customer stories

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

Sungard

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”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor

Client based in Ft Worth, Texas, USA

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GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in Hong Kong

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Hong Kong. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Hong Kong-based employees.

End-to-end Hong Kong payroll services

Looking to expand into Hong Kong? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Hong Kong expansion initiatives.

Global entity management

Venturing into the Hong Kongese market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Hong Kong

Entering the Hong Kongese market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Hong Kong. For more insights, explore our east asia insights on expanding into the East Asian market.

Start your Hong Kong expansion

Hong Kong Insights

Key insights into Hong Kong's landscape

VAT rates: Hong Kong has no Value Added Tax (VAT) or Goods and Services Tax (GST), making it a tax-friendly jurisdiction.

Ease of Doing Business rank: Hong Kong consistently ranks high, currently 4th globally, in the World Bank's Ease of Doing Business Index.

Consumer Confidence Index: As of 2022, Hong Kong's Consumer Confidence Index was 90.8, reflecting stable economic sentiment.

Employee maternity/paternity leave: Maternity leave is 14 weeks, and paternity leave is 5 days, providing support for new parents in the workforce.

Employee termination period: Standard notice for termination varies but is typically 1 to 2 months, depending on employment contract terms and seniority.

Employee salary pay date: Wages are due on the last day of the wage period and should be paid no later than the 7th of the month following.

Bank holidays: Hong Kong observes public holidays like Lunar New Year, National Day, and Christmas, with a total of 17 public holidays in a year.

An overview of Employment Ordinance in Hong Kong

Employment regulations in Hong Kong are outlined in the Employment Ordinance (EO) which is the primary labour legislation. The EO applies to all employees working in Hong Kong regardless of their nationality.

It should be noted that the EO refers to ‘continuous’ and ‘non-continuous’ employment, and legislations should be adhered to in line with these terms. Employees in continuous employment will be entitled to additional benefits. Continuous employment is defined as working for the same employer for 18 hours or more per week for at least four consecutive weeks.

Salary information

Salary & Employer costs

The Minimum Wage Ordinance (MWO) states the minimum wage for employees in Hong Kong.

Labour insurance — mandatory contribution based on the number of employees
Mandatory Provident Funds (MPF) — 5%
Medical insurance — optional

Bonus

Bonus payments are not mandatory; however, it’s often customary to provide a 13th-month salary payment to employees between Christmas and Chinese New Year. Bonuses paid as an annual payment are considered an ‘end-of-year payment’ under the Employment Ordinance and must comply with relevant legislations. It’s important that this is clearly stipulated in the contract to avoid confusion with discretionary bonuses.

Pension

Employers and employees don’t generally make pension contributions to the government. Instead, mandatory contributions to the Mandatory Provident Fund (MPF) should be made by both employers and employees to an MPF scheme, controlled by the Mandatory Provident Fund Schemes Authority (MPFA). Contributions are mandatory for all employees, unless the employee is on a contract of 13 months or less, in which case an exemption is made. As of March 2019, employees may now opt to make additional contributions as part of the Mandatory Provident Fund’s voluntary contributions scheme.

Contractual provisions

Probationary period

A probationary period isn’t mandatory, but if instated, it shouldn’t exceed 12 weeks. The probation clause in the contract of employment should state if there are any exemptions to other terms in the contract including salary, notice period prior to termination and access to other benefits. During the first month of probation, an employee is entitled to terminate the contract without notice.

Working hours

There’s no statutory working hour legislation in place in Hong Kong; however, the Employment Ordinance stipulates that all employees must receive at least one rest day per week. Common practice is for employees to work between 40 to 50 hours per week.

Termination

The regulations for termination in Hong Kong are stipulated by the Employment Ordinance. The minimum notice period that may be stipulated in a contract is seven days. If, however, there’s no notice period specified in the contract of employment, a notice period of one month is required.

Severance pay

Any employee who has been made redundant after being in continuous employment for a minimum of two years is entitled to a severance payment.

This is equivalent to two-thirds of the employee’s monthly wage multiplied by the period of service in years. The maximum severance pay that can be given to an employee is HK$390,000 or $15,000 per year of service.

Social security system

There are no social security taxes in Hong Kong. There’s a social security scheme in place (CSSA), which supports all residents who are unable to support themselves financially.

Healthcare

Hong Kong has a well-established, low-cost public healthcare system which is accessible to both permanent and non-permanent residents upon presentation of a valid visa and ID card.

It’s not uncommon for non-national employees to take out private medical insurance in order to benefit from Hong Kong’s private healthcare system.

Contract of employment

If an employee is covered by the EO, the terms of the contract must meet the minimum regulations.

Tax withholding

Taxes are not deductible by the employer and are the responsibility of the employee. Employees must file an annual tax return with the Inland Revenue Department (IND).

Statutory insurances

Employees’ Compensation Insurance (ECI)

The Employment Ordinance states that no employer shall employ employees unless a policy of insurance to cover liabilities and workplace injuries is in force. This insurance is irrespective of employment length, contract type and working hours. The insurance is solely the responsibility of the employer and no deduction can be made from an employee’s salary to cover the premium.

The minimum insurance cover is dependent on the number of employees:

Number of employees

Amount of insurance cover per event

Less than 200

No less than HKD 100 million

More than 200

No less than HKD 200 million

Additional labour insurance

The additional labour insurance premium applies to all employees working in specialist industries where the risk of workplace injuries is higher. This includes workers in a laboratory, factory, engineers and employees required to use machinery. In these instances, the employer will need to pay an additional premium, which will vary dependent on the level of risk. Please note, this is approximately HKD 2000+ per annum.

Holiday & leave

Employees in Hong Kong are entitled to 12 statutory public holidays irrespective of their length of service. Once an employee has worked for a period of three months, they’ll be entitled to paid leave on public holidays. If an employer requires an employee to work on a public holiday, the employer should arrange an alternative holiday within 60 days (before or after the statutory holiday). If the statutory holiday falls on a rest day, the employee should be granted paid holiday on the following day.

In addition to paid statutory holidays, employees are entitled to seven days of paid annual leave after twelve months of employment under a continuous contract. Annual leave entitlement increases progressively up to a maximum of 14 paid days per year. (In practice, many executives are granted 14 days annual leave per year.) Any paid annual leave should be taken within the following period of 12 months. Any rest day or statutory holiday falling within a period of annual leave will be counted as annual leave and another rest day or holiday must be appointed.

Annual leave entitlement

Years of service

Annual leave entitlement

One

Seven days

Two

Seven days

Three

Eight days

Four

Nine days

Five

10 days

Six

11 days

Seven

12 days

Eight

13 days

More than nine

14 days

Sick leave

All employees in Hong Kong that are employed continuously will accrue sick leave in the form of a sickness allowance. This is equal to two paid sick days per month in the first year of employment and four days per month thereafter.

The maximum sickness allowance that can be accrued is 120 days.

Sick pay is calculated at a daily rate equivalent to four-fifths of the average daily wage earnt in the 12-month period worked prior to taking sick leave. It’s not permitted for an employer to dismiss an employee who is absent from work during sick leave, except in the case of gross misconduct.

Employees are required to provide a medical certificate for days in which they request sickness pay.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Discover our payroll benefits

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Hong Kong

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

Understand the different types of EOR taxes
Stay up-to-date on the latest changes to EOR tax regulations
Avoid penalties for non-compliance

Speak to our team

Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013.

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Reviewed by:

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Hong Kongese employment solutions

What is an Employer of Record in Hong Kong?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Hong Kong. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Hong Kong?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Hong Kong. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Hong Kong?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Hong Kong. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.