Hong Kong
There’s plenty of great talent in Hong Kong. But navigating the legal frameworks to actually hire those people? That’s a different ball game. Which is what we’re for: By the end of this page, you’ll learn how you can hire people in Hong Kong—without establishing your own physical presence there or paying thousands in fees.
Country snapshot
CURRENCY
Hong Kong Dollar (HKD)
EMPLOYER TAXES
5.00%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Chinese, English
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Laws about hiring are complicated, and the same is true in Hong Kong. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in Hong Kong, you have two real options when it comes to hiring. We’ll detail both below.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Hong Kong than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Hong Kong.
Employer tax
Employer Contributions
- 5.00%
Paid Time Off (PTO)
An employee is entitled to annual leave with pay after having been employed under a continuous contract for every 12 months. Annual leave entitlement increases progressively from 7 days to a maximum of 14 days according to years of service:
- 1 year – 7 days
- 2 years – 7 days
- 3 years – 8 days
- 4 years – 9 days
- 5 years – 10 days
- 6 years – 11 days
- 7 years – 12 days
- 8 years – 13 days
- 9+ years – 14 days
Public Holidays
All employees are entitled to statutory holidays. Most employers however extend entitlement to all general holidays. There are 12 statutory holidays and 5 general holidays.
Sick Days
- All employees are entitled to statutory holidays. Most employers however extend entitlement to all general holidays. There are 12 statutory holidays and 5 general holidays.
- Accumulation of paid sickness days. An employee can accumulate paid sickness days after having been employed under a continuous contract. Paid sickness days are accumulated at the rate of two paid sickness days for each completed month during the first 12 months, and four paid sickness days for each completed month thereafter.
Paid sickness days can be accumulated throughout the whole employment period but shall not exceed 120 days at any one time - Sickness allowance. The daily rate of sickness allowance is a sum equivalent to 4/5 (80%) of the average daily wages earned by an employee in the 12-month period preceding the sickness day.
Maternity Leave
Length
14 weeks and can begin at any time between two and four weeks before the expected date of birth of the child.
Payment by employer
The employee is eligible for maternity leave pay if she has been employed under a continuous contract for not less than 40 weeks immediately before the commencement of scheduled maternity leave.
The daily rate of maternity leave pay is a sum equivalent to 4/5 (80%) of the average daily wages earned by an employee in the 12-month period preceding the first day of maternity leave.
Paternity Leave
Length
Male employees are entitled to 5 days’ paternity leave.
Payment by employer
The employee is eligible for paternity leave pay if he has been employed under a continuous contract for not less than 40 weeks immediately before the day of paternity leave.
Payment by employer
The daily rate of paternity leave pay is a sum equivalent to 4/5 (80%) of the average daily wages earned by an employee in the 12-month period preceding the day of paternity leave.
Parental Leave
No statutory laws or regulations.
Other Leave
None.
Marriage Leave
None.
Bereavement Leave
None.
Termination Process
A contract of employment may be terminated by the employer or employee by giving the other party due notice or payment in lieu of notice.
Statutory restrictions on termination
An employer shall not dismiss an employee under the following circumstances:
- Maternity protection
- Paid sick leave
- Giving evidence or information to the authorities
- Trade Union activities
- Employment protection
An employee may claim for remedies against an employer under the following situations:
- Unreasonable dismissal
- Unreasonable variation of the terms of the employment contract
- Unreasonable and unlawful dismissal
Notice Period
During Probation Period
1. Within first month: not required
2. After the first month where a contract makes provision for the required length of notice: as per the agreement
3. After the first month where the contract doesn’t make provision: not less than 7 days notice
For continuous contract / After probation period
1.Where contract makes provision: as per the agreement, no less than 7 days.
2.Where the contract doesn’t make provision: not less than 1 month.
Severance Pay
An employee is eligible for severance payment or long service payment subject to the following conditions:
Severance Payment
Qualifying Period:
not less than 24 months under a continuous payment
Requirements:
a.) employee is dismissed by reason of redundancy
b) contract expires without being renewed by reason of redundancy
c) The employee is laid off
Long Service Payment
Qualifying Period:
not less than 5 years under a continuous contract
Requirements:
a) employee is dismissed but not due to serious misconduct
b) dismissal is not due to the reason of redundancy
c) employment contract expired without being renewed
d) employee dies
e) employee reigns on ill-health
f) employee resigns on grounds of old age
An employee will not be simultaneously entitled to both long service payment and severance payment.
Amount of payment
(last month wages* x 2/3)# x reckonable years of services
* An employee may also elect to use his average wages in the 12 months immediately preceding the termination of the employment contract
# The sum should not exceed 2/3 of HK$ 22,500 (i.e. HK$ 15,000)
Maximum Amount
The maximum amount of severance payment or long service payment is HK$ 390,000.
Probation Period
None.
Working Hours
There are generally no restrictions on working hours, except in relation to young persons (under 18 years of age) for whom the maximum working period is usually eight hours per day or 48 hours per week.
Rest Day: An employee employed under a continuous contract is entitled to no less than one rest day in every period of seven days. Whether rest day is paid or not is to be agreed by employers and employees. In general, the rest day is paid in Hong Kong.
There are no special restrictions applicable to the working hours or rest breaks for shift workers.
All employees covered by the Employment Ordinance, irrespective of their hours of work, are entitled to basic protections under the Ordinance. Employees who are employed under a continuous contract by the same employer for four weeks or more, with at least 18 hours worked in each week are further entitled to additional benefits.
Overtime
Optional (as long as minimum wages are respected overall).
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