HR and payroll process in Hong Kong, How can we know about it?
Well, let us discuss in detail through this blog.
Hong Kong is a dynamic city that attracts businesses worldwide, with diverse wealth opportunities for growth and prosperity. One should be deeply aware of the regulations and cultural nuances to know more about HR and payroll. And then, to simplify HR and payroll process, any business must be familiar with whether it is an existing business or an entrant.
The blog provides a comprehensive step-up guide in emphasizing the insight that implies compliance, efficacy, and simplifying HR and payroll processes in Hong Kong.
Overview of Requirements for the HR and Payroll Process in Hong Kong
| Employee Onboarding | Employers are bound to provide the terms and conditions (offer letter) to the employees at the time of employment. The offer letter includes the wages, payment of wages with wages period, terminations and notice period, bonuses, and year-end increments. |
| Visa and legal compliances | Employers must ensure that employees follow the legal compliances and laws required under job security. The employees must hold a valid visa or HKID work permit to start employment. For the latest updates on visa and permit visas in Hong Kong |
| Wage Management | Employers must pay the wages promptly within seven days of the wages period. Otherwise, the employers are required to pay interest on the outstanding wages. To gather and visit for details on wage management in Hong Kong. |
| Rest Days, Holidays and Leave | Employees take various leaves like rest days, casual leave, statutory paid-offs, sick leave, etc. The number of days taken for each kind of leave varies based on the experience and duration of employment. |
| Maternity and Paternity Leave | Female employees can accumulate 14 weeks (98 days) as maternity leave. Male employees can take five days of leave as paternity leave for their spouse’s confinement. |
| Compliance and Recordkeeping details | Employers must keep employee records and submit key details to compliance regulations. It indicates filing the annual employee returns, new hires, reporting the terminations, etc. Also, employers collect the basic employment details such as employee name, HKID, employment contract, wages, and MPF (Mandatory Provident Fund) contributions. |
| Disbandment from Employment | Disbanding from employment can be for any valid reason, such as employee misconduct, qualification redundancy, or substantial reasons. Employees in Hong Kong disbanded for some legal protection because of dismissal for certain circumstances like maternity protection, paid sick leaves, any injury at work, and participation in any trade union activities. |
| Severance and Long Service Payment | Employees are only eligible for severance and long-service payment if employed continuously. If the severance is valid for a reason, they can get a token of severance gratitude for their service. |
Unlock the Secrets of the Payroll Process in Hong Kong
Hong Kong payroll system is challenging, with laws that businesses must manage while allowing employees’ wages, increments, and perks. If not employers must endure against several rules and regulations followed by the Hong Kong. It includes in the Mandatory Provident Fund scheme, Employment Ordinance, and Inland Revenue Ordinance (IRO).
With the MPF system, the employees can make savings, which plays a crucial part in the HK payroll system.
Employers must abide by these rules to know their organisation’s categories, like remuneration structures, leaves, and job termination. Thus, reminds employers that the employees get wages on time, statutory leaves, and require a minimum salary for the team.
Ultimately, employers must connect to the IRO, which informs the employees of the Inland Revenue Department about their pay and benefits. IRO non-compliance can have legal and financial repercussions, including penalties and fines.
Legal Requirements for the Payroll System in Hong Kong
Hong Kong has a scrupulous legislative structure; specifically, it entails how businesses handle employee payroll. Let us discuss the main legal criteria that the employer must follow:
The most minimal category for employment is the employment ordinance in Hong Kong. Employers must know the minimum wages, rest days, yearly leave benefits, etc. The other areas of employment that they need to monitor are long-service benefits, severance compensation, and termination from employment.
- MPF (Mandatory Provident Fund Scheme)
Employers and employees must contribute 5% of their employee wages to this retirement savings scheme, which is compulsory to pay in the MPF scheme
- IRO (Inland Revenue Ordinance)
Under IRO in Hong Kong, the employers must provide complete details of the earnings, salaries, bonuses, and benefits that are provided to the employees.
- ECO (Employment Compensation Ordinance)
In Hong Kong, it is mandatory for all businesses that employees provide insurance and claims for occupational diseases and compensation claims for the liabilities of the staff members. Furthermore, if the employees admit any accidents or illnesses, employers must provide claims for those accidental incidents.
- PDPO (Personal Data (Privacy) Ordinance)
In addition, PDPO companies must protect all employees’ personal information and not mislead the information to other information banks. The business must attempt any legal actions or penalties from the PDPO if anything is transferred. Therefore, all companies need to comprehend and follow their regulatory obligations. If anything alters, it can lead to reputational harm to the organisation. The organisation can appoint an accountant to gather the information, hold it privately, and pay all the contributions on time.
The Bottom Line
In a nutshell, HK payroll administration is a complex task that should be maintained scrupulously and keenly. Thus, the rules and regulatory obligations are adhered to strictly and, if violated, can lead to the reputational ruin of the organisation. Info-Tech offers payroll outsourcing with the highest data security and threat protection and effectively secures your payroll management.
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Hope you got an informative insight!
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