Hong Kong is one of Asia’s leading free-market economies. The country had an annual GDP of 368.373 billion USD in 2022, projected to grow. Furthermore, Hong Kong is a hugely service-oriented country with an ever-growing labor market. The country’s mandatory education has contributed to its 95.7% literacy rate. These factors combine to make Hong Kong an ideal location for investors to establish businesses and enhance their workforce.
While hiring employees in Hong Kong, employers must comply with local norms and regulations. Read this guide on how to hire people in Hong Kong to know more.
Things To Know Before Hiring in Hong Kong
Different laws and regulations guide recruitment and selection in Hong Kong, as listed below:
Employment contract: It is optional to have a written agreement in Hong Kong. However, it is good practice to draft an employment contract with the following information:
- Date of commencement
- Identification of employer and employee
- Workplace
- Job description
- Working hours
- Total holidays
- Salary and other compensations and benefits
- Probation
- Notice period
Minimum wage
In most cases, employees receive a salary at least once a month in Hong Kong. The minimum wage in the country is 37.50 HKD (as of February 2023).
Sick pay
Employees who miss four consecutive work days due to illness are compensated with 4/5th of their daily wage. Other factors related to sick pay are:
- An employee’s first year in a company grants them two sick days every month.
- Every additional year after the first, the number of paid sick days will be increased to 4 days per month.
- Unused sick days can be used later. The unused days are capped at 120 days.
Probation period
The probation period in Hong Kong ranges between 1 to 3 months.
Taxes
The contribution rates for taxes in Hong Kong are as follows:
Employer | Employee |
8.25%-16.5% corporate tax rate (no VAT) | 2%-17% individual income tax rate |
Social security
Employers and employees are also required to make contributions to the social security scheme in the following break up
Employer | Employee |
| 5% of the employee’s monthly salary towards MPF |
Annual leave
The number of annual leaves in Hong Kong depends on the years of service.
Years of service | Leave duration |
First two years of service | 7 days of paid leave annually |
After nine years of service | 14 days of paid leave annually |
- Unused leave days can be carried forward to the next year or cashed out.
- Pay in exchange for time off is only possible for leaves exceeding ten days.
Maternity leave
- Employees who have completed a minimum employment duration of 40 weeks are entitled to 14 weeks of maternity leave.
- This leave can start two or four weeks before the expected due date.
- In the case of complicated births, maternity leave can be extended for up to four weeks.
- Employees are entitled to 4/5th of their regular wages during the leave period.
- Employers can file for a reimbursement from the government to cover the wage between the 11th and 14th weeks.
Paternity leave
- Fathers are entitled to five days of paternity leave.
- They receive 4/5th of their regular wage during this time.
- In such cases, employers must be notified at least three months before the baby’s birth.
National holidays
There are 19 national holidays in Hong Kong, which are:
January 1 | New Year’s Day |
February 1 | Lunar New Year’s Day |
February 2 | Second Day of the Lunar New Year |
February 3 | Third Day of the Lunar New Year |
April 5 | Ching Ming Festival |
April 15 | Good Friday |
April 16 | The day following Good Friday |
April 18 | Easter Monday |
May 2 | Labour Day |
May 8 | Birthday of Buddha |
May 9 | The day following the birthday of Buddha |
June 3 | Dragon Boat Festival |
July 1 | Special Administration Region Day |
September 12 | Second day after the Chinese mid-Autumn festival |
October 1 | Chinese National Holiday |
October 4 | Chung Yeung Festival |
December 25 | Christmas Day |
December 26 | The first weekday following Christmas |
December 27 | The second weekday following Christmas |
Notice period
Duration of service | Notice period |
During the probation period’s first month | No notice period |
After the first month of the probation period | 7 days |
After the trial period (in case no other notice period is decided upon) | 30 days |
Severance pay
Employees who were employed for over 24 months and terminated are entitled to 2/3rd of their monthly salary.
Long service payment
Employees who have worked continuously for over five years are entitled to a long service payment. This is applicable only if the employment was not terminated due to misconduct or redundancy.
The Cost of Hiring an Employee in Hong Kong
Hiring staff in Hong Kong comes with its own set of expenditures, which are discussed here:
- Establishing your business: To start employing in Hong Kong, first, you must establish your business in the country as a representative office, branch office, or subsidiary.
- Hiring legal aid: To fully understand the local laws and norms governing businesses in Hong Kong, hiring a professional legal aid would be best.
- Paying hiring committee: Whether you set up an internal committee to hire new talent in Hong Kong or outsource the work to an EOR, you must pay a certain fee.
- Posting on job boards: You might have to post online to attract applicants for various vacancies in your company.
- Conducting background checks: Usually, companies outsource the job of background checks on potential employees to trustworthy third parties.
What Does a Company Need to Hire Employees in Hong Kong?
Before beginning the recruitment and selection in Hong Kong, you must comply with local laws and regulations. Here are some additional compliances you need to take care of:
- Legally establishing your business: To start hiring in Hong Kong, you must legally establish your business. To do so, you must submit identification documents of your company’s officers, incorporation documents, application forms, parent company’s memorandum, articles of association, etc.
- IRD registration: Companies must also register with IRD by registering their company branch or subsidiary.
- Permits: Companies must apply for different permits and licenses based on their industry.
Various Options For Hiring Employees in Hong Kong
Businesses looking to expand in Hong Kong and start the hiring process can utilize one of these two ways:
- Through legal establishment: This is a time taking option wherein businesses must first legally establish themselves in the country through a branch or subsidiary to hire employees. Several documents, registrations, and permits are involved in this method.
- Through an Employer of Record (EOR): Companies can hire a global EOR, like Multiplier, to recruit candidates in Hong Kong. This is a much easier option that is more efficient and requires lesser resources.
The Steps to Hiring in Hong Kong
The five basic steps to hiring staff in Hong Kong are
Step 1: Posting job ads
- To get applicants, you have to post job ads on different online portals or newspapers.
- Include all the job post requirements to attract applications from relevant candidates.
Step 2: Screening candidates
- Once you have shortlisted candidates based on their submitted CVs, it is time to conduct a thorough screening.
- This can be done through a skills test or questionnaire.
Step 3: Interviewing the best candidates
- Once you finish screening, you can move on to interviewing your list of qualified candidates.
- The interviews can be conducted online or in person, wherein you can ask job profile-related questions.
Step 4: Creating an employment contract
- Prepare employment contracts containing all the necessary information to present to the selected candidates.
Step 5: Onboarding
- Finally, the last step of recruitment and selection in Hong Kong is onboarding newly employed individuals. This stage usually involves more paperwork.
Let Multiplier Be Your EOR Platform in Hong Kong
To successfully hire talented and skilled employees, any company must be well-versed in the country’s laws, regulations, and customs. Therefore, with Multiplier, you can stay assured, knowing you can hire the top talent in compliance with all local norms. Furthermore, Multiplier also provides various other solutions like payroll management, obtaining work permits, managing employees, and so on, making recruitment and selection in Hong Kong a simple task for you!