Employee compensation in Hong Kong is governed by the Employment Ordinance (Cap. 57), the Mandatory Provident Fund Schemes Ordinance (Cap. 485), and the Minimum Wage Ordinance (Cap. 608). Every employer must understand the statutory minimum entitlements before making an offer.
This guide covers all mandatory components of employee compensation: minimum wage, MPF contributions, annual leave, sick leave, maternity and paternity leave, and statutory holidays. For the MPF payment mechanics, see our MPF payments guide. For payroll processing, see our MPF employer guide. For the tax implications of employing staff in Hong Kong (including Employer's Return, MPF deductibility, and salaries tax), see our corporate tax guide.
Highlights of this article
- Statutory minimum wage: HKD 43/hour from 1 May 2025.
- MPF: employer and employee each contribute 5% of relevant income, capped at HKD 1,500/month each.
- Annual leave: 7 days in year 1, increasing to 14 days after 9 years of service.
- Sick leave: 2 paid sick days accrued per month, up to 120 days accumulated. Paid at 4/5 of daily wage.
- Maternity leave: 14 weeks paid at 4/5 of daily wage. Paternity leave: 5 days paid at 4/5 of daily wage.
- Severance payment applies after 24 months of service on redundancy. Long service payment after 5 years.
Summary of statutory entitlements
| Entitlement | Statutory minimum |
|---|---|
| Minimum wage | HKD 43/hour (from May 2025) |
| MPF (employer) | 5% of relevant income, capped HKD 1,500/month |
| MPF (employee) | 5% of relevant income, capped HKD 1,500/month |
| Annual leave | 7 to 14 days depending on years of service |
| Statutory holidays | 13 days per year |
| Sick leave (paid) | 2 days/month, max 120 accumulated, paid at 4/5 |
| Maternity leave | 14 weeks paid at 4/5 daily wage |
| Paternity leave | 5 days paid at 4/5 daily wage |
| Rest days | 1 rest day per 7 days worked |
| Severance payment | After 24 months continuous service (redundancy) |
| Long service payment | After 5 years continuous service |
Minimum wage
The statutory minimum wage (SMW) is HKD 43 per hour from 1 May 2025. All employees are covered except student interns on accredited programmes and live-in domestic workers. See our minimum wage guide for full coverage rules, record-keeping obligations, and calculation for different pay structures.
MPF contributions
Both employer and employee contribute 5% of relevant income to the Mandatory Provident Fund:
- Minimum relevant income: HKD 7,100/month (below this, employee is exempt but employer still contributes)
- Maximum relevant income: HKD 30,000/month (contributions capped at HKD 1,500/month each)
- Deadline: within 10 working days after the contribution period (typically month-end)
The employer's contribution is a cost on top of wages, not deducted from wages. For contribution rates, new employee enrolment rules, and late payment penalties, see our MPF payments guide.
Annual leave
Annual leave entitlement increases with years of service:
| Years of continuous service | Annual leave days |
|---|---|
| 1 to 2 years | 7 days |
| 2 to 3 years | 8 days |
| 3 to 4 years | 9 days |
| 4 to 5 years | 10 days |
| 5 to 6 years | 11 days |
| 6 to 7 years | 12 days |
| 7 to 8 years | 13 days |
| 8+ years | 14 days |
Annual leave is paid at the average daily wages over the preceding 12 months (or shorter period if employed less than 12 months). Annual leave cannot be waived. Unused leave must either be taken or paid out on termination.
Statutory holidays
Employees are entitled to 13 statutory holidays per year under the Employment Ordinance. These differ from the 17 general holidays. Statutory holidays are the mandatory minimum for employees covered by the ordinance.
If a statutory holiday falls on the employee's rest day, a substitute holiday must be granted. Employers can require employees to work on statutory holidays, but must grant a substitute holiday within 60 days and pay the employee's full wages for that day.
Sick leave
Paid sickness allowance applies when an employee:
- Has been employed for at least 1 month
- Takes a sick day supported by a valid medical certificate from a registered medical practitioner
- Has accumulated sufficient paid sick days
Sick days accrue at 2 days per month worked, up to a maximum of 120 accumulated paid sick days. Paid sick days are paid at 4/5 of the employee's average daily wage over the preceding 12 months.
An employer cannot dismiss an employee on sick leave who meets the conditions for paid sickness allowance. Doing so is deemed an unreasonable dismissal.
Maternity leave
Female employees who have been employed for at least 40 weeks are entitled to 14 weeks paid maternity leave. The payment is 4/5 of the employee's average daily wage, paid by the employer (up to HKD 80,000 for the extended 4 weeks beyond the original 10 weeks, reimbursed by the government).
Conditions:
- Employee must give at least 2 weeks notice before taking leave (or notify as early as practicable)
- A medical certificate confirming pregnancy and expected delivery date is required
- Leave can start 2 to 4 weeks before the expected delivery date
For full details on calculation, government reimbursement, and employer obligations, see our maternity leave guide.
Paternity leave
Male employees who have been employed for at least 40 weeks are entitled to 5 days paid paternity leave to be taken within 4 weeks before or after the expected delivery date. Payment is at 4/5 of average daily wage, capped at HKD 10,256 per leave day (government reimbursement applies to the 5th day for eligible cases).
Severance and long service payment
Severance payment applies when an employee with 24 or more months of continuous service is dismissed by reason of redundancy, or where a fixed-term contract is not renewed by the employer due to redundancy. Payment: 2/3 of last month's wage (or HKD 22,500, whichever is less) for each year of service.
Long service payment applies when an employee with 5 or more years of continuous service is dismissed for any reason other than misconduct, or resigns due to ill health, or reaches retirement age. Payment formula is the same as severance.
An employee is not entitled to both. Whichever applies governs. Since May 2025, mandatory MPF contributions can no longer be used to offset severance or long service payment. For full calculation and the 2025 MPF offset abolition, see our severance payment guide and long service payment guide.
Market compensation levels in Hong Kong
Statutory entitlements are the floor. Most competitive employers offer above-statutory benefits:
| Benefit | Statutory minimum | Market practice |
|---|---|---|
| Annual leave | 7 to 14 days | 14 to 21 days |
| Medical insurance | None required | Group medical plan (HKD 1,500 to 5,000/year per employee) |
| Bonus | None required | 1 month discretionary (13th month pay) |
| Dental | None required | Sometimes included in medical plan |
| MPF | 5% employer | Some offer additional voluntary contributions |
Market salaries in Hong Kong vary significantly by sector, seniority, and whether the role targets local or international talent. The Labour Department publishes an annual occupational wages survey that provides sector-specific benchmarks.
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