Hire Employees in Hong Kong Without a Local Entity.
Hong Kong is Asia's premier financial hub with a business-friendly tax system and deep professional talent. RecruitGo handles employment contracts under the Employment Ordinance, MPF pension enrollment, employees' compensation insurance, tax reporting to the IRD, and payroll in HKD.
What Is an Employer of Record in Hong Kong?
An Employer of Record (EOR) is a local entity that legally employs workers in Hong Kong on your behalf. RecruitGo's Hong Kong entity becomes the legal employer — we sign the employment contract under the Employment Ordinance (Cap 57), enroll employees in a Mandatory Provident Fund (MPF) scheme, arrange employees' compensation insurance, and handle all reporting to the Inland Revenue Department (IRD).
You retain full control over the employee's work, schedule, and responsibilities. They report to you, work on your projects, and function as part of your team. We handle everything that Hong Kong employment law requires of an employer.
Key regulatory changes: The MPF offset abolition took effect in May 2025, meaning employers can no longer use MPF accrued benefits to offset severance or long service payments. A new continuous contract definition (the “468 rule”) takes effect in January 2026, expanding statutory protections to more workers. Non-compliance with the Employment Ordinance carries fines up to HKD 350,000. See full EOR vs entity comparison →
Who Should Use EOR in Hong Kong?
What It Costs to Hire Through EOR
Your total cost has three components: the employee's gross salary, mandatory statutory contributions, and the EOR management fee.
| Component | Monthly (HKD) | Rate |
|---|---|---|
| Gross salary | 35,000 | — |
| MPF employer contribution | 1,500 | 5% (capped at HKD 30,000 relevant income) |
| Employees' Comp Insurance | ~175 | ~0.5% |
| Year-end bonus provision | ~2,917 | 1/12 monthly |
| Total loaded cost | ~39,592 | ~113% |
* MPF employer contribution is 5% of relevant income, capped at HKD 1,500/month (based on the HKD 30,000 maximum relevant income ceiling). Employees' compensation insurance rates vary by industry. Year-end bonus provision is optional but customary. EOR management fee not included above. Since May 2025, MPF accrued benefits can no longer offset severance or long service payments.
MPF offset abolished May 2025: Employers can no longer use MPF employer contributions to offset severance or long service payments for service periods after the abolition date. This effectively increases the true cost of termination — factor this into long-term hiring decisions.
How Hiring Works Through EOR
You tell us who you want to hire. We confirm salary, MPF scheme selection, employees' compensation insurance, and provide a full cost breakdown.
We draft an Employment Ordinance-compliant contract, enroll the employee in an MPF scheme within 60 days of start, arrange employees' compensation insurance, and notify the IRD via form IR56E.
We calculate and disburse salary in HKD within 7 days of the wage period end. MPF contributions are remitted by the 10th of the following month. There is no PAYE — we track leave accruals and maintain payroll records.
We monitor minimum wage updates, the phased statutory holiday increases (13→17 by 2030), the new 468 rule effective January 2026, and handle all IRD employer filings.
EOR vs HK Limited vs Contractors
| EOR | HK Limited | Contractor | |
|---|---|---|---|
| Time to first hire | 3–5 days | 2–4 weeks | Immediate |
| Setup cost | None | $3K–8K+ | None |
| Registered capital | None | HKD 1 (no minimum) | None |
| Compliance risk | Handled by EOR | Your responsibility | High |
| Employee protections | Full | Full | None |
| MPF enrollment | Handled by EOR | Your responsibility | N/A |
| Best for | 1–20 people, speed | 30+, licensed activities | Short-term only |
Contractor warning: Hong Kong courts look at the substance of the working relationship, not just the contract label. If the person works set hours, uses your equipment, and is integrated into your business, they may be deemed an employee — triggering backdated MPF contributions, employees' compensation liability, and statutory entitlements.
MPF & Tax Obligations in Hong Kong
Employer Obligations
| Contribution | Rate | Notes |
|---|---|---|
| MPF contribution | 5% of relevant income | Capped at HKD 1,500/mo |
| Employees' Comp Insurance | 0.2–3%+ | Varies by industry risk |
| Payroll tax | 0% | No PAYE system in Hong Kong |
Employee Obligations
| Contribution | Rate | Notes |
|---|---|---|
| MPF contribution | 5% of relevant income | Capped at HKD 1,500/mo |
| Salaries Tax | Progressive 2–17% or standard 15% | Paid directly by employee to IRD |
No PAYE system: Unlike most jurisdictions, Hong Kong does not require employers to withhold income tax from employee wages. Employees file their own tax returns and pay salaries tax directly to the IRD. The employer's role is limited to reporting compensation via IR56 forms (IR56B annually, IR56E on commencement, IR56F on cessation, IR56G on departure).
Employee Benefits in Hong Kong
Statutory Benefits
Leave Entitlements
* Annual leave starts at 7 days after 12 months and increases by 1 day per year of service, up to 14 days. Statutory holidays are increasing from 13 to 17 by 2030. Sick leave accumulates at 2 paid sickness days per month in the first year, then 4 days per month thereafter, up to a maximum of 120 days. Maternity and paternity leave are paid at 4/5 of average daily wages.
468 rule — January 2026: The continuous contract threshold changes from 18+ hours/week for 4+ consecutive weeks to 68+ hours across 4 consecutive weeks. This expands statutory protections (rest days, holidays, annual leave, sickness allowance, severance, long service payment) to significantly more part-time and casual workers. Plan workforce structures accordingly.
Severance & Termination in Hong Kong
Notice Period
Notice must be given as specified in the employment contract. If the contract is silent, the statutory minimum is one month's notice (or payment in lieu). During probation, no notice is required in the first month; thereafter, 7 days' notice applies unless the contract specifies otherwise.
Severance Payment
An employee with 24 or more months of continuous service who is dismissed by reason of redundancy is entitled to severance pay. The formula is 2/3 of the last month's wages multiplied by years of service. Wages are capped at HKD 22,500/month, and the maximum payment is HKD 15,000 per year of service.
Long Service Payment
An employee with 5 or more years of continuous service is entitled to long service payment if dismissed (other than for summary dismissal reasons), made redundant, or terminates due to health reasons. The formula and caps are the same as severance pay. An employee cannot receive both severance and long service payment.
Summary Dismissal
An employer may summarily dismiss an employee without notice for wilful disobedience, misconduct, fraud, habitual neglect of duties, or other grounds specified in the Employment Ordinance.
Probation
Probation periods of 3 months are standard practice. During the first month of probation, either party may terminate without notice. After the first month, 7 days' notice (or payment in lieu) is required unless the contract specifies a longer period.
Since the MPF offset abolition in May 2025, employers can no longer use accrued MPF employer contributions to reduce severance or long service payments for post-abolition service periods. Your EOR factors this into cost planning from day one.
Working Hours & Minimum Wage
Hong Kong has no statutory maximum working hours for adult employees and no legally mandated overtime pay rate. Employees are entitled to at least 1 rest day per 7-day period under the Employment Ordinance.
The statutory minimum wage is HKD 42.10 per hour. This applies to all employees regardless of whether they are paid monthly, daily, or by piece rate.
Frequently Asked Questions
The total cost is your employee's gross salary plus MPF contributions (~5% capped), employees' compensation insurance (~0.5%), optional year-end bonus provision, and the EOR management fee. For a mid-level role at HKD 35,000/month, total loaded cost is approximately HKD 39,500–39,600 (~105–113% of gross depending on bonus provision).
Hong Kong does not operate a PAYE (Pay As You Earn) system. Employees are personally responsible for filing their own tax returns and paying salaries tax directly to the Inland Revenue Department (IRD). The employer's obligation is to report employee compensation via IR56 forms — not to withhold tax from wages.
The MPF offset abolition took effect on 1 May 2025. Employers can no longer use accrued MPF benefits to offset severance or long service payments for employment periods after this date. This means termination costs have effectively increased, as severance and long service payments must now be fully funded separately from MPF.
Effective January 2026, the "continuous contract" definition changes from working 18+ hours per week for 4+ consecutive weeks to working 68+ hours across 4 consecutive weeks (the "468" threshold). This expands statutory protections — including rest days, holidays, annual leave, sickness allowance, severance, and long service payment — to more part-time and gig workers.
Either party may terminate by giving notice as specified in the contract, or statutory 1 month if the contract is silent. Payment in lieu of notice is allowed. Employees with 24+ months of service who are made redundant qualify for severance pay. Employees with 5+ years qualify for long service payment. The formula is 2/3 of last month's wages × years of service, capped at HKD 22,500/month wages and HKD 15,000 per year of service.
There is no statutory 13th month salary in Hong Kong. However, a year-end bonus (often called a "double pay") is extremely common and considered customary in most industries. The amount and terms depend on the employment contract. Many employers offer one month's salary as a year-end payment.
You can, but Hong Kong courts look at the substance of the relationship — not just the contract label. If the person works set hours, uses your tools, and is integrated into your business, they may be deemed an employee regardless of what the contract says. Misclassification risks backdated MPF contributions, employees' compensation liability, and statutory entitlements.
For Hong Kong residents, typically 3–5 business days from signed agreement to official start date. For candidates requiring work visas (e.g., employment visa under the General Employment Policy), the process takes 4–6 weeks including Immigration Department approval.
