Country Overview
Hong Kong is a vibrant metropolis and Special Administrative Region of China, known as “Asia’s World City.” It operates under the “one country, two systems” principle, maintaining its own legal and economic systems until at least 2047. The city is a global financial hub with a free-market economy and low taxation, attracting businesses and expat professionals worldwide.
English and Chinese (Cantonese) are official languages, so many services and signs are bilingual, which helps foreign residents integrate. Hong Kong offers a high standard of infrastructure, efficient public transport, and a low crime rate. With a population of approximately 7.51 million and around 690,000 expats, the city blends Eastern and Western influences. The immigration system is largely employer-sponsor based, with several talent-attraction schemes for professionals.
*This guide is intended for general informational purposes only and should not be viewed as legal or tax advice. The information discussed may change frequently, and Access Financial cannot guarantee that all content remains current at all times.
2026 Key Legislative Updates
Statutory minimum wage rises to HK$43.1/hour from 1 May 2026. The new “468 Rule” for continuous employment takes effect from 18 January 2026 (17 hours/week, or 68 hours over 4 weeks). Easter Monday becomes a statutory holiday (15 statutory holidays total). MPF severance offsetting was abolished on 1 May 2025.
Contracts
Hong Kong’s Employment Ordinance is the principal piece of legislation governing employment relationships. It does not distinguish between full-time, part-time, temporary, or permanent employees in terms of legal rights — what matters is whether an employee meets the “continuous employment” threshold.
Contract Types
| Contract Type | Duration | Key Features |
|---|---|---|
| Permanent (Open-Ended) | Indefinite | Continuous indefinite employment; most common arrangement for full-time roles |
| Fixed-Term | Specified end date | For project-based roles; must be in writing and signed by both parties; may become continuous if renewed |
| Part-Time | Indefinite or fixed | Same statutory rights if continuous employment threshold met; benefits may be pro-rated |
| Casual / Short-Term | As needed | Common in hospitality, construction, events; limited entitlements if below the continuous employment threshold |
The New “468 Rule” — From 18 January 2026
An employee qualifies for continuous employment status — and the full range of statutory benefits — if they work at least 17 hours per week, or 68 hours aggregated over 4 weeks. This replaces the previous “418 Rule” and broadens statutory protection to more part-time and irregular workers.
What Your Contract Must Include
Standard Contractual Terms
- Job title and description
- Start date and contract duration (if fixed-term)
- Wages and pay frequency
- Working hours and place of work
- Annual leave entitlement
- Notice period (both sides)
- Sickness allowance entitlement
- MPF (Mandatory Provident Fund) details
Common Additional Clauses
- Confidentiality / NDA provisions
- Intellectual property assignment
- Restrictive covenants (non-compete, non-solicit)
- Probation terms (typically 3 months)
- Bonus and commission structure
- Housing allowance or accommodation provision
- Group medical insurance details
Access Financial drafts Hong Kong-compliant employment contracts and manages onboarding for EOR engagements.
Working Hours & Overtime
Hong Kong does not have a statutory maximum working hours for most jobs. Working time is set by contract, with practice varying significantly by industry.
| Parameter | Rule | Notes |
|---|---|---|
| Statutory maximum hours | None | No general statutory cap; set by contract |
| Average working week | 44 – 48 hrs | Banking, finance and legal sectors often work longer hours |
| Typical business hours | 9:00am – 6:00pm | Most professional firms operate Mon–Fri |
| Work week | 5 days standard | Some local firms still operate half-day Saturdays |
| Overtime rate | No statutory rate | Subject to contract; typically not paid to salaried professionals |
| Statutory minimum wage | HK$43.1/hr | Effective 1 May 2026 (up from HK$42.1) |
Minimum Wage Review — From May 2026
Hong Kong has moved to an annual review mechanism for the statutory minimum wage. The rate increases to HK$43.1/hour from 1 May 2026, providing more predictable adjustments for employers and workers.
Probation Period
No statutory probation period in Hong Kong law — it is contractual, typically 3 months (sometimes 6).
| Parameter | Standard practice | Legal notes |
|---|---|---|
| Typical duration | 3 months | 6 months also used; no statutory maximum |
| Notice in first month | None | Either party may terminate without notice |
| Notice after first month (during probation) | 7 days (or as per contract) | Often shorter than post-probation notice |
| Statutory rights during probation | Most apply from day one | Minimum wage, statutory holidays, MPF (after 60 days) |
Immigration & Work Visas
Almost everyone who is not a Hong Kong permanent resident or Chinese national needs a visa to legally work or reside in Hong Kong. The immigration system is largely employer-sponsor based, although several talent-attraction schemes allow professionals to enter without a prior job offer.
Top Talent Pass Scheme (TTPS) — 2026 Update
The eligible-universities list was updated to 200 institutions on 1 January 2026. Category A applicants (earnings of HK$2.5M+ in the past year) now receive a 36-month initial visa (Categories B and C: 24 months). Hong Kong Identity Card (HKID) registration is mandatory within 30 days of arrival on a visa valid for more than 180 days.
Key Visa Routes for Foreign Professionals
| Visa Route | Job Offer Needed? | Sponsor? | Initial Duration |
|---|---|---|---|
| General Employment Policy (GEP) | Yes | HK employer | 2 – 3 years; renewable |
| Top Talent Pass — Category A | No | No | 36 months |
| Top Talent Pass — Categories B & C | No | No | 24 months |
| Quality Migrant Admission Scheme (QMAS) | No | No | Points-based; no quota cap in 2026 |
| Immigration Arrangements for Non-local Graduates (IANG) | No (initially) | No | 12 months to seek employment |
| ASMTP (Mainland China nationals) | Yes | HK employer | 2 – 3 years; renewable |
| Entrepreneur (under GEP) | N/A | Business plan required | Subject to business case |
| Dependant Visa (spouse / unmarried children under 18) | No | Sponsor: principal visa holder | Linked to sponsor’s visa; spouses may work without separate permit |
Path to Permanent Residence
After 7 years of continuous ordinary residence in Hong Kong, foreign nationals are eligible to apply for Permanent Resident status (“Right of Abode”) and a Permanent HKID, granting the right to live and work in Hong Kong indefinitely. Reasonable absences (such as vacations) are permitted during the qualifying period.
AF’s immigration team handles visa applications, sponsorships, and HKID registration for contractors and professionals relocating to Hong Kong.
Leave Entitlements
Hong Kong’s statutory leave entitlements are modest by international standards, but most professional employers offer enhanced benefits well above the statutory floor.
Annual Leave
| Length of service | Statutory entitlement | Notes |
|---|---|---|
| 1 year | 7 days | After 12 months of continuous employment |
| 2 – 8 years | +1 day per year | 8 days in year 2, 9 in year 3, etc. |
| 9+ years | 14 days (cap) | Statutory maximum |
| Market standard (professional roles) | 14 – 20+ days | Mid-level: 14; senior: 18–20+ days common |
Parental Leave
| Leave type | Duration | Pay | Eligibility |
|---|---|---|---|
| Maternity | 14 weeks | 4/5 (80%) of average salary | 40+ weeks of continuous service before leave |
| Paternity | 5 days | 80% of average salary | 40+ weeks of continuous service |
| Statutory Parental Leave (general) | None | — | No separate statutory parental/childcare leave |
Sick Leave (Sickness Allowance)
| Parameter | Rule |
|---|---|
| Accrual — first 12 months of service | 2 paid sickness days per month |
| Accrual — after 12 months | 4 paid sickness days per month |
| Maximum accumulated balance | 120 days |
| Rate of pay | 80% of average daily wages |
| Minimum sick leave to qualify for pay | 4 consecutive days (with medical certificate) |
| Medical certificate | Required for paid sick leave |
Public Holidays 2026
Hong Kong has 17 General Public Holidays in 2026. Of these, 15 are now Statutory Holidays — with Easter Monday added as a new statutory holiday from 2026, narrowing the gap between the two categories.
| Date | Day | Holiday |
|---|---|---|
| 1 January | Thursday | New Year’s Day |
| 17 February | Tuesday | Lunar New Year’s Day |
| 18 February | Wednesday | Second day of Lunar New Year |
| 19 February | Thursday | Third day of Lunar New Year |
| 3 April | Friday | Good Friday |
| 4 April | Saturday | Day following Good Friday (Holy Saturday) |
| 6 April | Monday | Day following Ching Ming Festival |
| 7 April | Tuesday | Day following Easter Monday |
| 1 May | Friday | Labour Day |
| 25 May | Monday | Day following the Birthday of the Buddha |
| 19 June | Friday | Tuen Ng Festival (Dragon Boat Festival) |
| 1 July | Wednesday | Hong Kong SAR Establishment Day |
| 26 September | Saturday | Day following the Chinese Mid-Autumn Festival |
| 1 October | Thursday | National Day |
| 19 October | Monday | Day following Chung Yeung Festival |
| 25 December | Friday | Christmas Day |
| 26 December | Saturday | First weekday after Christmas Day (Boxing Day) |
Notice Periods
The Employment Ordinance sets a default minimum notice. Most professional contracts specify longer periods, particularly for senior roles. Either party may pay wages in lieu of notice to end the contract immediately.
| Stage of employment | Statutory minimum notice | Typical contractual notice |
|---|---|---|
| First month of probation | None | None — either party may terminate immediately |
| After 1st month of probation | 7 days | 7 – 14 days |
| Post-probation (default if not specified) | 1 month | 1 – 2 months |
| Senior / executive roles | 1 month | 3 months or more |
Termination & Severance
Hong Kong distinguishes between Severance Payment (for redundancy) and Long Service Payment (for long-tenured staff). Both are calculated using a similar formula and require a minimum period of continuous service.
| Parameter | Severance Payment | Long Service Payment |
|---|---|---|
| Triggered by | Redundancy / lay-off | Resignation (after age 65), termination (not for misconduct), or death |
| Minimum service | 24 months | 5 years |
| Formula | 2/3 × monthly wages × years of service (capped at HK$22,500/month for calculation) | |
| Maximum payment | HK$390,000 | |
MPF Offsetting Abolished — Effective 1 May 2025
Employers can no longer offset Severance or Long Service Payments against their MPF contributions for service from 1 May 2025 onwards. Departing employees retain their full MPF pot and receive the statutory payment in full. Review HR procedures and budgets accordingly.
Final Payment and Tax Clearance
On termination of employment, the employer must notify the Inland Revenue Department (form IR56F or IR56G) and may be required to withhold final wages pending tax clearance — particularly for employees leaving Hong Kong permanently, who must obtain a Letter of Release from the IRD before their final salary is released.
Income Tax (Salaries Tax)
Hong Kong operates on a territorial basis: only income arising in or derived from Hong Kong is taxable. The tax year runs from 1 April to 31 March. Foreign-source income (e.g. overseas dividends, foreign rental income) is not taxed in Hong Kong.
Salaries Tax — Progressive Rates 2025/26
| Net Chargeable Income (after allowances) | Rate |
|---|---|
| First HK$50,000 | 2% |
| Next HK$50,000 | 6% |
| Next HK$50,000 | 10% |
| Next HK$50,000 | 14% |
| Remainder (above HK$200,000) | 17% |
Two-Tier Standard Rate (Cap)
| Net Income (before personal allowances) | Standard Rate |
|---|---|
| First HK$5,000,000 | 15% |
| Remainder (above HK$5,000,000) | 16% |
Provisional Tax — Plan for the First Bill
Hong Kong taxes are paid in two instalments (75% in January, 25% in April). The IRD also collects provisional tax towards the following year — so a first-year expat’s initial bill effectively covers roughly 1.75 years of tax. Budget ahead.
Key Personal Allowances 2025/26
| Allowance | Amount |
|---|---|
| Basic (single) | HK$132,000 |
| Married Persons | HK$264,000 |
| Child Allowance (each, year of birth) | HK$130,000 |
| Child Allowance (each, other years) | HK$120,000 |
| Dependent Parent / Grandparent | HK$50,000 – HK$100,000 |
Key Deductions
- Mandatory MPF contributions — capped at HK$18,000/year
- Approved charitable donations — up to 35% of income
- Home loan interest — up to HK$120,000/year (HK$100,000 + HK$20,000 extra from 2024/25)
- Domestic rents paid — up to HK$100,000/year (if no employer housing allowance received)
- Voluntary Health Insurance Scheme (VHIS) premiums — up to HK$8,000 per insured person
- Qualifying annuity premiums and TVC contributions — combined cap HK$60,000/year
- Elderly residential care expenses — up to HK$100,000/year
Double Taxation Agreements
Hong Kong has signed comprehensive Double Taxation Agreements with 57 jurisdictions (as at March 2026), including Mainland China, the UK, France, Japan, and most major economies. Negotiations are ongoing with around 18 additional jurisdictions. Because Hong Kong taxes only local-source income, the main DTA concern for most expats is relief in their home country.
Let Access Financial handle your Hong Kong payroll — seamlessly and compliantly, with local specialists on call.
Benefits
Statutory benefits in Hong Kong are modest, so professional employers typically layer substantial supplemental benefits to attract and retain talent in this competitive labour market.
Mandatory Statutory Benefits
| Benefit | Rate / Amount | Notes |
|---|---|---|
| MPF | 10% total | 5% employer + 5% employee (each capped at HK$1,500/month) |
| Statutory Sickness Allowance | 80% of average wages | Accrued; max balance 120 days |
| Statutory Maternity Pay | 80% of average wages | 14 weeks |
| Statutory Paternity Pay | 80% of average wages | 5 days |
| Annual Leave | 7 – 14 days/year | Increases with service |
| Severance / Long Service Payment | Up to HK$390,000 | Conditional on service and cause of termination |
| Public Healthcare | HK$50 GP visit / HK$100 hospital day | Heavily subsidised; HKID-holders |
Market-Standard Supplemental Benefits
| Benefit | Prevalence | Typical provision |
|---|---|---|
| Private Medical Insurance | Very common (professional employers) | Group plans covering employee & family |
| Housing Allowance | Common for senior / relocated staff | Cash allowance or company-leased flat |
| Education Allowance | Common in expat packages | School fees, debentures, capital levies |
| Annual Bonus / 13th Month | Widespread | Often tied to performance or Lunar New Year |
| Voluntary MPF (TVC) | Some employers | Tax-deductible top-ups |
| Flexible / Hybrid Working | Increasingly common post-2021 | Hybrid 2–3 days remote in many firms |
Pension System (MPF)
Hong Kong has no state pension. The Mandatory Provident Fund (MPF) is the primary retirement savings vehicle, with mandatory contributions from both employer and employee.
| Parameter | 2026 | Notes |
|---|---|---|
| Employer mandatory contribution | 5% of salary | Capped at HK$1,500/month; from day one |
| Employee mandatory contribution | 5% of salary | Capped at HK$1,500/month; starts day 60 |
| Minimum relevant income | HK$7,100/month | Below this, employee contribution waived |
| Maximum relevant income | HK$30,000/month | Cap for calculating contributions |
| Normal retirement age | 65 | Early withdrawal allowed from age 60 in certain cases |
| Tax-deductible voluntary contributions (TVC) | HK$60,000/year | Combined cap with qualifying annuity premiums |
| MPF severance offset | Abolished | Effective 1 May 2025 |
Insurances
Compulsory and recommended insurances for employers, employees, and contractors operating in Hong Kong.
| Insurance | Coverage | Required by |
|---|---|---|
| Employees’ Compensation Insurance | Mandatory — covers workplace injury / occupational disease | Employees’ Compensation Ordinance (Cap. 282) |
| Motor Insurance (Third Party) | Mandatory for vehicle owners | Motor Vehicles Insurance (Third Party Risks) Ordinance |
Professional Indemnity Insurance — Contractors
Often contractually required by end-clients in finance, IT consulting, and engineering. Covers negligence, errors and omissions claims that cause financial loss to a client. AF can advise on appropriate cover for your sector.
Health Insurance Overview
Public healthcare for HKID-holders is high-quality and very affordable (HK$50 GP visit, HK$100 hospital ward day), but waiting times for non-emergency services can be long. Most expats supplement with private medical insurance, either through their employer or via private cover. Our partners at IMG can assist with private health insurance suitable for expats and their families.
AF Solutions
Access Financial supports end-clients, recruitment agencies, and employees operating in Hong Kong, handling payroll, immigration, tax compliance, and contract management.
For End-Clients
Managing a contingent workforce can be complex. Our solutions streamline workforce management, making it simple, compliant, and cost-effective.
For Recruiters
We offer a complete suite of services, allowing you to simply, compliantly, and efficiently place your candidates internationally, with minimum fuss.
For Contractors
Focus on what you do best and let us take care of your payroll, tax compliance, social security, and immigration needs.
Free Consultation
FAQ
Find answers to our most frequently asked questions below.
What solutions do you offer in Hong Kong?
In Hong Kong, Access Financial provides one compliant engagement model:
Employed/EOR (umbrella): We become the legal employer of your employees in Hong Kong. Your business retains full control of the day-to-day work and deliverables, while we carry the employment, payroll, and tax liability.
When should a company consider using an EOR?
An EOR is especially useful in a range of scenarios. It is the most efficient route when you want to convert existing contractors into compliant employees and reduce misclassification risk, or when you need to hire talent in a country where you do not have a local entity. It also allows you to onboard quickly without going through a lengthy and complex company registration process, while ensuring full compliance with local employment law, payroll, and tax regulations. Beyond these core use cases, an EOR is equally valuable when you are testing a new market before committing to a long-term investment, or when you simply need temporary or project-based hires abroad.
Can we hire both local nationals and foreign employees through an EOR?
Yes. Our EOR services cover both local nationals and foreign hires. For foreign nationals, additional visa or work permit requirements apply, and we can support the application process end-to-end — including sponsorship in jurisdictions where we hold the relevant licence.
Our standard management fee is 5% of the contract value, with a minimum of €550. We also offer volume discounts on bulk engagements. To discuss pricing for your specific scenario, please get in touch with our team here: https://accessfinancial.com/#get-started.
Social Security (MPF)
Hong Kong’s Mandatory Provident Fund (MPF) is the primary social security scheme. There is no separate social security tax for unemployment, healthcare, or pensions — public healthcare is funded from general government revenue.
MPF Contributions
No VAT / GST in Hong Kong
Hong Kong has no Value Added Tax, no sales tax, and no general consumption tax. Prices on shelves are final — no extra percentage at the till. A significant lifestyle advantage for expats arriving from VAT jurisdictions.