Hong Kong is a unique independent city/state with low tax rates, high incomes, and very low unemployment figures. Hong Kong is growing rapidly and attracting companies from all over the world, with few barriers to entry.
As with any expansion, there are challenges to growing your business and managing payroll in Hong Kong. There are unique funds, insurance, tax and compliance laws for payroll. Blue Marble is a leader providing global payroll solutions for companies that also operate in Hong Kong, and can guide you through the regulations.
Hong Kong has recently made changes to the visa application requirements for non-permanent residents wishing to return. Please visit the Hong Kong government website to learn more: https://www.immd.gov.hk/eng/message_from_us/20201231.html
Companies can expand in Hong Kong in several ways, by incorporating a new business, creating a branch or representative office. The tax rates vary based on incorporation status and company profits. The tax year is April 1 – March 31 each year, and the Inland Revenue Department (IRD) issues profit tax returns on the first working day in April.
Some labor and payroll considerations in Hong Kong include:
- The minimum wage as of 2019 is HKD 37.50 per hour
- There is no payroll tax
- Employers must notify IRD of all hiring contracts
- Foreign workers must apply for a visa from the General Employment Policy (GEP), with a job offer required prior to applying
- Companies must show that the position could not be filled with a local resident before hiring a foreign worker
Sick Leave Policies in Hong Kong
An employee is generally entitled to a sick leave allowance they have missed at least four consecutive days, have a medical certificate, and has accumulated a sufficient number of paid sick days. Paid sick days may be accumulated at a rate of two days for each month of employment for the first year, and four days per month for each year thereafter. No more than 120 paid sick days can be accumulated. Sick pay is granted at a rate equivalent to 4/5ths of the average daily wages earned by the employee in the prior 12 months, or time since hire if the employee has been with the company for less than 12 months.
If your company is managing payroll in Hong Kong, you need simplified payroll and reporting to ensure compliance. Our cloud-based payroll technology provides aggregated global reporting so you can see your payroll costs across all countries and currencies in real-time. Blue Marble makes payroll easy with in-country expertise and automated updates to payroll regulation changes to ensure compliance in Hong Kong. To learn more about simplifying your payroll in Hong Kong, click here