The Minimum Wage in Hong Kong is HKD 40 per hour, effective from May 1, 2023. For employees whose total working hours are recorded, the monthly wage cap is HKD 16,300. Employers must ensure compliance with the minimum wage requirements as stipulated under the Employment Ordinance.

Individual income tax in Hong Kong ranges from 2% to 17%, calculated on income after allowable deductions and personal allowances. The system follows a progressive tax rate structure, making Hong Kong one of the most tax-efficient jurisdictions globally.

Hong Kong does not have statutory working hours under the Employment Ordinance, and these are typically agreed upon between the employer and employee. Employers should ensure that hours of work, rest periods, and meal breaks are clearly stated in the employment contract to avoid disputes.

Annual Leave
Employees are entitled to paid annual leave based on their length of service:

• 1 year of service: 7 days.
• 2 years or more: Increasing incrementally with service, as outlined in Hong Kong’s labour laws.

Sick Leave
Employees are entitled to paid sick leave, which can be accumulated:

• Up to 24 days per year based on service duration.
• Additional sick leave beyond statutory entitlement is subject to employer policies.

Maternity Leave
Female employees are entitled to 14 weeks of paid maternity leave. Employers are reimbursed for the allowance under statutory provisions.

Paternity Leave
Male employees are entitled to 5 days of paid paternity leave. This entitlement is independent of marital status or the number of spouses.

In Hong Kong, employment contracts are typically provided in writing, drafted in either Chinese or English. Contracts should outline:

• Job description
• Salary and benefits
• Working hours
• Leave entitlements
• Probation terms
• Termination conditions

Although a written contract is not mandatory, it is widely practiced to protect the rights of both parties and ensure compliance with Hong Kong employment law.

The termination process in Hong Kong requires adherence to notice periods, severance pay, and legal procedures based on the reason for termination:

Notice Period

• During the first month of probation: No notice required.
• After probation: Minimum 7 days’ notice or as specified in the contract (typically 1 month).

Dismissal

• Summary dismissal: Immediate termination for gross misconduct.
• Redundancy: Requires statutory severance pay if the employee has been employed for at least 24 months.

Severance Pay

• Calculated as 2/3 of the last month’s wages for each year of service, up to a maximum of HKD 390,000.
• Long service payments may apply to employees with at least 5 years of continuous employment under specific circumstances.

Employers must also comply with additional obligations, including final payment of wages and contributions to the Mandatory Provident Fund (MPF).