Managing payroll in Hong Kong is tricky: you must juggle tight deadlines, MPF deductions, IRD reporting, and data-privacy rules—often across several entities and countries. For global firms, the task gets even harder (different currencies, perks, schedules, and laws). This explains why more international companies are turning to payroll outsourcing in Hong Kong to follow the rules, cut down on risks, and let their teams focus on growth.
This guide shows you what you need to consider before you outsource, from must-follow rules and IR56 duties to how to pick the right service provider.
Why Hong Kong Stands Out for Payroll Outsourcing
- Strict Legal Deadlines: Companies must pay wages within 7 days after the pay period ends; delays can lead to criminal charges with steep fines—making timing controls and automation essential.
- MPF Management: Both employers and employees contribute 5% of eligible income to MPF, with minimum/maximum income thresholds and a monthly limit (now HK$1,500 at the HK$30,000 “maximum relevant income” level). External systems help to reduce mistakes and keep calculations up-to-date.
- Ongoing Digital Change: The eMPF Platform brings schemes on board in stages through 2025–26, which centralizes administration and changes employer workflows—another reason to count on experts who keep an eye on the rollout.
In one line: Outsourcing turns complex regulations into a service with agreed-upon standards, checks, and expert responsibility.
Compliance Scene (What Your Provider Needs To Handle)
1) Employment Ordinance (EO) basics
- Pay wages on time (within 7 days after each wage period).
- Keep wage and employment records in the EO-required format.
A good provider will set up calendars, warnings, and late payment interest rules to help you meet deadlines.
2) MPF (Mandatory Provident Fund)
- Sign up new hires who qualify (within 60 days of starting work).
- Figure out contributions at 5% for both employer and employee sticking to the legal min/max income levels and monthly limit (HK$1,500 at HK$30,000).
- Create and turn in contribution files; sort out any issues; help with eMPF setup.
3) IRD employer returns (IR56 series)
Your provider should get ready and e-file the correct form when it’s due—and let you know when one form takes the place of another for the same YA to stop double-filing:
- IR56E: New employee—submit within 3 months after starting work.
- IR56F: Job ending—submit at least 1 month before the last work day (if staying in HK).
- IR56G: Employees leaving Hong Kong—submit at least 1 month before exit; company holds final pay until IRD gives a Letter of Release.
- IR56B: Yearly report of pay (don’t file again if IR56F/G already submitted for the same tax year).
4) Record-keeping
Maintain business and payroll records for at least 7 years—your provider should give you exportable, audit-ready ledgers and document storage.
Learn More About Filing Profit Tax in Hong Kong & Also About The Unveiling The Secrets Of MPF.
In-house vs Outsourced Payroll in Hong Kong
| Approach | Where it shines | Typical risks |
| In-house | Tight internal control, custom workflows for small headcount | Staff dependency; manual errors; keeping up with EO/MPF/IRD changes; scaling multi-entity |
| Outsourced | Compliance coverage, specialist expertise, e-filing pipelines, 24/7 continuity | Vendor lock-in risk if SLAs are weak; integration effort if tech stack is fragmented |
Rule of thumb: When your business crosses borders, grows beyond about 50 employees, or sees frequent staff changes farming out your payroll comes out on top for managing risks and speeding up processes.
What To Expect From A Hong Kong Payroll Service Provider?
1. Local compliance engine
EO wage rules, MPF min/max logic & caps, IR56 E/F/G/B workflows, holiday calendars.
2. E-Filing & eMPF readiness
eTAX integration for IR56; contribution files that work with trustees; a plan to transition to eMPF.
3. Data protection (in line with PDPO)
Encryption when data is stored and sent, access based on roles clear data location, controls on how long to keep data.
4. Integrations
HRIS/ATS/time-and-attendance, accounting/ERP, expense and banking systems.
5. Controls & auditability
Maker-checker sign-offs, change records, difference checks, pay schedules, anomaly boards.
6. Help across borders
Multiple currencies, shadow pay, treaty advice through partner connections.
7. Quality of service
Clear service agreements (deadlines payday, ticket answers) dedicated account group busy-season expansion.
Also know more about the difference between ORSO and MPF contributions in Hong Kong.
A Month In The Life: Outsourced Payroll Timeline
- T-10 to T-5: Gather attendance, overtime, and allowances. Check joiners and leavers. Start IR56 E, F, and G processes.
- T-4: Work out gross-to-net pay. Look over MPF contributions making sure they’re within limits.
- T-3: Get approvals from makers and checkers. Fix any issues. Create bank files.
- T-2: Send out e-payslips. Finish MPF files to give to the trustee.
- T (Pay day): Pay out salaries. Save compliance documents.
- T+1: Enter payroll info into the general ledger. Make month-end reports. Update IR56 forms if needed.
Common Mistakes (& How Outsourcing Helps Avoid Them)
- Late Wage Payments → calendars and alerts in the system help you stay within the 7-day window; logic for interest/penalties is available.
- Wrong MPF Caps → central updates to statutory tables; checks flag employees in incorrect bands.
- Duplicate or Missing IR56 Forms → rules in the workflow stop IR56B duplication when F/G is already filed; checklists make sure there’s enough time for IR56E/F/G.
- Weak Audit Trail → logs that can’t be changed, reports with versions, exports kept for 7 years.
How To Pick Best Payroll Outsourcing Company (Vendor Rating System)
Look At Five Key Areas:
1. Compliance track record
- Proven EO/MPF/IRD know-how; set of Hong Kong–specific SOPs; references in your industry.
2. Tech & connections
- Cloud system with API links to your HRIS/time/ERP; bank hookups; safe employee self-service (pay stubs, tax papers).
3. Business continuity
- Backup processing slots; switch-over/revert steps; holiday rush plans; SOC/ISO certifications.
4. Customer care
- Dedicated CSM; monthly check-ins; KPI reports (right-first-time %, ticket response time, process duration).
5. Clear pricing
- Itemized quote (basic charge, per-employee fee, year-end/IR56 bundles setup); no hidden “paperwork costs”.
What Global Companies Specifically Need in Hong Kong
- Entity-by-entity controls for regional hubs, with consolidated reporting.
- Shadow payroll for short-term assignments and commuters; treaty-aware gross-ups through partners.
- Change management to onboard eMPF milestones across trustees and schemes.
Info-Tech’s Hong Kong payroll outsourcing (Designed for SMEs to MNCs)
- Engine native to EO/MPF/IRD (5% MPF with cap logic; IR56 E/F/G/B workflows; controls for wage timing).
- Automation from start to finish (time/attendance → payroll → MPF trustee files → e-payslips → GL).
- Packs for compliance & trail for audits (exports for 7-year retention, logs of changes).
- Help with eMPF transition through updates for phased onboarding and ways to enable employers.
Check out how it works: [Payroll Outsourcing Services – Info-Tech Hong Kong] (link in your CMS to the services page)
Wrapping Up
Hong Kong payroll doesn’t forgive mistakes—but you can handle it well with the right ally, system, and checks. Outsourcing gives you expert coverage for EO/MPF/IRD rules, keeps you ready for eMPF shifts, and allows your team to think big instead of getting stuck in the details.
Stay Compliant, Always On Time With Our Scalable Payroll Software!
Let’s make your next payday a breeze. Ring us at +852 2456 5811 or drop a line to sales@info-tech.com.hk to get a custom outsourcing plan for your Hong Kong business.
Frequently Asked Questions:
Do many companies in Hong Kong outsource payroll?
Yes. Strict wage deadlines, MPF complexities, and IR56 requirements push lots of businesses—global ones—to hire specialist providers to ensure accuracy and consistency.
What MPF rules should my provider know?
Employers and employees each contribute 5% of relevant income, within set income limits and a monthly contribution limit of HK$1,500 for the HK$30,000 band; proper enrollment and contribution records are crucial.
Which IR56 forms apply and when?
IR56E (new hire—within 3 months), IR56F (cessation—1 month before), IR56G (departure from Hong Kong—1 month before; employer holds back final pay until Letter of Release), IR56B (annual).
How long must we keep payroll records?
The Inland Revenue Ordinance requires you to keep payroll records for at least 7 years. Your provider should give you exportable ledgers and document packs.
What happens if wages are paid late?
Late wage payment can be against the law and lead to heavy fines. Having solid schedules and sign-offs helps stop this from happening.
