An Ultimate Guide to IR56 Forms

If you’re running a business in Hong Kong and hiring employees, dealing with IR56 forms isn’t optional—it’s a legal requirement. These forms are how employers report employee income to the Inland Revenue Department (IRD), and filing them correctly is key to staying compliant and avoiding penalties.

What is an IR56 Form?

An IR56 form is used to declare salaries, wages, bonuses, commissions, housing allowances, and other payments or benefits during the assessment year.

Each IR56 form is tied to a specific purpose, but in general, they are all about reporting remuneration paid by the employer.

The IR56 form is part of the Employer’s Return of Remuneration and Pensions (BIR56A), which ensures that the IRD maintains accurate records of employee compensation. Each form type serves a distinct reporting purpose depending on the employee’s status or departure.

Types of IR56 Forms

Employers must use the appropriate IR56 form based on the specific employment situation. Below is a breakdown of each form type, when to use it, and filing requirements:

IR56B Form for General and Continuous Employment

IR56B is the standard form employers must file each year to report remuneration paid to employees who are still employed as of 31 March or were employed during the assessment year.

It applies to all forms of continuous employment, including full-time, part-time, and seconded employees.

When to File IR56B

• Submit together with the Employer’s Return (BIR56A)
• Deadline: Within 1 month of BIR56A issue date
• File even if only one qualifying employee was employed during the year

If you didn’t receive a BIR56A by mid-April, and had qualifying employees, you must request one from the IRD.

Even if you had no employees, the BIR56A must be submitted with the box “NO” ticked.

Who Must Be Reported Under IR56B

• Single employees with income exceeding HK$132,000
• Married employees, regardless of income
• Part-time staff
• Directors
• Seconded employees (in/outside HK)
• Pensioners with income above basic allowance
• Former employees who exercised stock options

Report all income earned during the year (1 April – 31 March), including:

• Salary and wages
• Bonuses and commissions
• Allowances (e.g. housing, transport, meals)
• Share awards and stock options
• Employer's voluntary MPF contributions
• Retirement benefits or gratuities
• Payments in kind

If an employee doesn’t have a Hong Kong Identity Card (e.g. an overseas hire), use their passport number and place of issue.

After submission, notify the IRD as soon as the employee obtains an HKID.

Submission Requirements

Make sure your submission is complete and properly signed.

You must:

• Submit all IR56B forms together with BIR56A
• Provide a copy of the IR56B to the employee for their personal tax filing
• Use a Control List if submitting via electronic or self-developed software
• Sign the forms and declaration using an authorized person (e.g. director, secretary, principal officer)

For bulk electronic filing, use:

• The IRD’s e-Filing Service
• IR56B XML format (pre-approved software only)

Download IR56B & instructions here

IR56M Form for Freelancers and Contractors

If you hired freelancers, consultants, agents, or subcontractors during the year, and paid them above a certain threshold, you may be required to file this form.

Who Is Covered Under IR56M?

You must file IR56M for payments made to:

• Subcontractors
• Consultants
• Agents
• Brokers
• Freelancers (e.g. artists, writers, entertainers, sportsmen)

These service providers are not employees, so their income isn’t reported on IR56B.

When Are You Required to File IR56M?

You need to file IR56M if you paid:

• Over HK$200,000/year to a subcontractor
• Over HK$25,000/year to a consultant, agent, or freelancer

If the amount is below these limits, reporting is generally not required.

These figures apply per year of assessment (1 April to 31 March), not your company’s accounting year.

Who Must Be Reported?

You are required to file IR56M for any individual, sole proprietor, or partnership business you paid during the year.

You do not need to file IR56M for payments to limited companies (corporations).

Important Note on Disguised Employment

If a service provider works through a company that they control — but acts as your employee — this may be treated as disguised employment.

In that case, report the payment under IR56B, not IR56M, if Section 9A of the Inland Revenue Ordinance applies.

You must submit:

• IR56M for each service provider
• A summary Control List (Form IR6036B)
• Your BIR56A as the cover document

If you have no IR56Bs to file, write “NIL” on the BIR56A, but still attach the IR56Ms and IR6036B.

For individuals, include:

• Full name (as on HKID)
• HKID number
• Residential and correspondence addresses

For businesses, include:

• Business name
• Business Registration Number
• Business/correspondence address

Report income in HKD, even if you paid in foreign currency.

You must give a copy of the IR56M to each service provider. This helps them file their own tax return correctly.

If you amend any info, send them the updated version as well. If you submitted incorrect details:

• Submit a revised IR56M, or
• Write to the IRD with a clear amendment notice

Include the phrase: “Amendment of Form IR56M furnished on [date]”

Do not send faxes or photocopies — originals only. Also give a copy of the amended IR56M to the service provider.

Forms IR56M and IR6036B are usually mailed with your BIR56A in April, if you filed in previous years.

If you didn’t receive them or are filing for the first time, request them from the IRD.

IR56G Form for Employees Leaving Hong Kong

If an employee is leaving Hong Kong for good or for more than one month, you are legally required to file Form IR56G. This is part of the tax clearance process enforced by the Inland Revenue Department (IRD).

When to File

File IR56G when:

• The employee is resigning or their contract ends, and
• They are leaving Hong Kong for over 1 month, and
• They are subject to Salaries Tax

This includes employees leaving for:

• Migration
• Long-term overseas assignment
• Overseas study or sabbatical
• Retirement abroad

You do not need to file IR56G if:

• The employee frequently travels for work
• They are not leaving for more than 1 month
• They are not chargeable to Salaries Tax

Employer’s Obligations

1. File IR56G – Submit the form and provide a copy to the employee
2. Withhold Payments – Salary, bonus, commissions, gratuity, reimbursements, etc.
3. Wait for Letter of Release – Release funds only after IRD clearance
4. Garnishee Order Risk – If taxes unpaid, IRD may order the company to remit withheld amounts

Additional Steps

• File another IR56G for post-departure payments
• Maintain all documentation (resignation, payroll, visa, IR56G copy)

Employee’s Responsibility

• Notify IRD of departure
• File final return
• Provide contact details and authorization (if needed)
• Pay by EPS/cash/cashier’s order for faster release

IR56 Form Submission in Hong Kong

There are two ways to file your IR56 forms: Online Mode and Mixed Mode under the Employer's Return e-Filing Services provided by the IRD.

The IR56 Forms Preparation Tool lets you prepare up to 2,000 sets of IR56B or IR56F records, and upload up to 5,000 records per file. IR56 Forms Tool Guide (PDF)

Option 1: Online Mode (Requires eTAX Login)

• Login with eTAX, MyGovHK, digital certificate, or iAM Smart+
• Choose: Direct Keying (max 30 forms) or file upload (up to 5,000)
• Submit IR56 forms and BIR56A

Important: For annual submission, you can only submit once per tax year. For IR56E/F/G amendments, multiple uploads are allowed per day.

Option 2: Mixed Mode (No eTAX Login Required)

• Upload IR56 data via IR56 Forms Tool
• Generate and sign Control List cover page
• Submit signed cover page along with the BIR56A to IRD

Important: Uploading alone is not enough. The signed Control List must be submitted to complete the process.

Common Filing Scenarios and Forms

Here are common employer situations and the correct IR56 form to file:

Common IR56 Form Filing Mistakes and How to Avoid Them

Below are the most frequent mistakes employers make and how to avoid them.

1. Wrong form used – Misfiled IR56F instead of IR56G or vice versa.
2. Late submissions – Missed deadlines for IR56E/F/G/B.
3. Premature payments after IR56G – Release only after receiving IRD clearance.
4. Duplicate reporting – Don’t file IR56F/G and IR56B for the same employee.
5. Omitting low-income or married staff – These must still be reported.

Penalties for IR56 Form Non-Compliance in Hong Kong

Filing IR56 forms incorrectly—or failing to file them at all—can lead to serious penalties under the Inland Revenue Ordinance (IRO). Below is a breakdown of the key offences, the relevant legal sections, and associated penalties for employers and service providers.

Making Your IR56 Filing Simpler

Managing IR56 forms can be a source of stress for many businesses, especially those without dedicated HR or accounting teams. However, with a few strategic practices, the process can become significantly more efficient. Here are key recommendations for simplifying IR56 filing:

• Maintain Accurate Records
  Businesses should consistently record employee income, benefits, and deductions on a monthly basis. Keeping records up to date throughout the year helps ensure accuracy and reduces the risk of errors when preparing IR56 forms.
• Invest in Reliable Payroll Software
  Using dependable payroll software can streamline both salary processing and tax reporting. Automating these tasks not only saves time but also enhances compliance with Hong Kong’s regulatory requirements.
• Keep Up with Regulatory Updates
  Tax laws and reporting standards in Hong Kong may change from time to time. Staying informed of the latest updates from the Inland Revenue Department (IRD) is essential for maintaining compliance. Businesses are encouraged to regularly consult the IRD website or subscribe to official updates.

How to Maximize Tax Deductions and Allowances

For small businesses and entrepreneurs, taking advantage of eligible deductions and allowances can significantly reduce tax liabilities. Here are some key areas to focus on:

• Mandatory Provident Fund (MPF) Contributions – Employers may deduct contributions made to employees’ MPF accounts, provided payments are made on time and in accordance with statutory requirements.
• Capital Allowances – Expenditures on items such as machinery, equipment, or office furnishings may be deductible as capital allowances. This allows businesses to lower taxable income by accounting for business investments.
• Home Office Expenses – If a business operates from a home office, it may be possible to claim deductions on a portion of household expenses like rent, electricity, or internet—so long as these expenses are clearly connected to business use.
• Depreciation of Fixed Assets – Businesses can apply depreciation to long-term assets by spreading their cost over several years. This method provides tax relief while reflecting the declining value of assets over time.

Conclusion

Filing IR56 forms accurately and on time isn’t just a regulatory requirement in Hong Kong—it’s part of running a compliant, well-managed company. 

If you’d rather not handle this complexity in-house, Air Corporate can help. We manage your employer compliance—from IR56 filing to accounting, payroll, and tax—so you can focus on running your business.

Want to stay compliant without the admin headaches? Talk to our team today!