Hong Kong is a global business hub with low taxes, top-tier talent, and a reputation for efficiency-hiring there is a no-brainer. The process though? Now that takes a little more brain power.
Let Pebl simplify it. This guide walks you through exactly what it takes to legally hire and pay employees in Hong Kong without drowning in legal jargon or second-guessing your next step.
Hiring requirements
Hiring in Hong Kong is more straightforward than in many markets, but there's still a right way to do it. Here's what to do first.
You'll want to issue a written contract (even if it's not legally required), register as an employer with the Inland Revenue Department within three months, and enroll your new hires in the Mandatory Provident Fund. Be sure to handle any Hong Kong-specific visa or work permit needs for non-residents and file employer tax forms like IR56E or IR56B when required.
Visas, permits, and the "4 18 rule"
Local citizens and permanent residents don't need additional work authorization. If you're hiring foreign talent, you'll need to sponsor them for an employment visa under the General Employment Policy. To qualify, you must show that the role isn't easily filled locally, that the candidate brings strong experience, and that your offer meets market standards.
Don't overlook the "4 18 rule." If someone works 18 hours a week for four or more consecutive weeks, they're entitled to statutory benefits. This rule often catches employers off guard when hiring freelancers or part-timers.
Setting up as an employer
You'll need to get your Employer's File Number from the IRD, register your business, and enroll eligible employees in the MPF within 60 days. Keep records on file for seven years, and familiarize yourself with the Employment Ordinance so you know what's expected.
Payroll in Hong Kong
Start with the basics: the minimum wage is HKD $42/hour (US$5) as of May 2023. Pay structures usually include base salary, commissions, bonuses, and sometimes allowances. Mandatory benefits include 5% MPF contributions from both employer and employee. Some employers go further, offering unique benefits like private medical plans or extra paid leave.
Monthly payroll cycles are the norm. Most contracts include a three-month probation period and outline salary, work hours, and benefit terms.
Sample payroll cycle and documentation
A typical monthly rhythm might look like this: early in the month, you collect hours and confirm any variable pay like commissions or bonuses. Mid-month is for processing payroll and MPF. By the end of the month, employees receive their payslips and bank transfers.
You'll need to issue payslips with detailed breakdowns, keep records for at least seven years, and file tax forms when employees join, leave, or at year-end. Using a digital payroll platform with built-in compliance for Hong Kong is a safe bet.
FAQ
You've probably got a few questions. Here are answers to some that employers ask most:
What's the "2-week rule"?
After probation, employees usually get two weeks' notice, or pay in lieu, if you terminate employment.
When should salary be paid?
No later than 7 days after the end of the pay period.
How do I legally pay someone?
Bank transfer is preferred. Include a payslip detailing wages and deductions.
Is a payslip required?
No, but it's essential for clarity, trust, and tax compliance.
Is there a 13th-month bonus?
It is not mandatory, but some companies offer 13th-month pay as a contractual perk.
Common pitfalls and practical tips
Even experienced companies misstep in new markets. In Hong Kong, common mistakes include skipping MPF enrollment (a legal must), using only verbal contracts (always risky), or missing payroll deadlines which damages employee trust.
Another one to watch? Misclassifying part-timers. If someone hits that "4 18" threshold, they're owed benefits-every time. Don't assume freelance means "hands off."
Even if the law doesn't require written contracts or payslips, you'll want them for protection and clarity. Get registered early with the IRD and MPF. And don't leave payroll to the last minute, plan ahead so contributions and filings are accurate.
Utilizing support from Employer of Record providers
Here's where things get easier. An employer of record (EOR) is a third party that hires employees on your behalf. You stay in control of day-to-day work while they handle legal employment, payroll, tax filings, and compliance.
Pebl makes hiring in Hong Kong easy
Hiring in Hong Kong can be smooth if you partner with Pebl.
Let our comprehensive employer of record service handle visa sponsorship, compliant contracts, payroll, MPF contributions, and keep you aligned with local labor laws.
Bottom line? You hire talent with a Hong Kong EOR, without setting up a local entity or juggling paperwork.
When you're ready to hire without the hassle, let's talk.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided "as is," and no representations are made that the content is error-free.
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