Employer of Record in Hong Kong: 2026 Cost and Compliance Guide

Hong Kong has low statutory employer costs. The main one is the Mandatory Provident Fund (MPF): employers contribute 5% of an employee's relevant income, capped at HK$1,500 a month. Employees' compensation insurance is also compulsory.

Most employment rights depend on the employee being under a continuous contract, which from 18 January 2026 means at least four weeks with the same employer and at least 17 hours a week (or 68 hours over four weeks).

The change to know for 2026 is that, for service from 1 May 2025, employers can no longer offset severance or long service payments with their mandatory MPF contributions. This guide covers costs, those rules, the main employment rules, provider comparison and when to set up your own company. Figures link to official sources. We do not test or use the providers listed; see our methodology.

An Employer of Record in Hong Kong employs staff on behalf of foreign businesses: it signs the employment contract, enrols the employee in an MPF scheme, insures them under employees' compensation insurance, runs payroll, and handles leave, holidays and termination under the Employment Ordinance.

The EOR is the legal employer, so it owes the statutory entitlements, including severance or long service payments when they arise.

Ask each provider how severance and long service payments are funded and charged to you, particularly when an assignment ends after two or five years.

Hong Kong employees under a continuous contract are entitled to a severance payment if dismissed for redundancy after at least 24 months, or a long service payment after at least 5 years if dismissed for other reasons (other than serious misconduct), and in some other cases. Each is two-thirds of the last full month's wages (capped at HK$22,500 a month) for each year of service, up to HK$390,000.

Before 1 May 2025, employers could reduce these payments by the accrued benefits from their mandatory MPF contributions. For employment that began on or after 1 May 2025, those benefits can no longer be used to offset them, so the payments are a real additional cost. For employment that straddles the date, the portion of service before 1 May 2025 follows transitional rules.

In an EOR arrangement, the provider is the employer and bears this liability, but it will usually pass the cost to you. It matters most for long assignments and for ending employment after two or five years.

What to ask an EOR

Hong Kong employment cost has three layers: gross salary, the employer's MPF contribution, and the EOR fee. Employees' compensation insurance is compulsory but priced by insurers, and severance or long service payments arise only when employment ends in qualifying circumstances, so neither is included.

MPF is charged on relevant income up to HK$30,000 a month, so the employer contribution is capped at HK$1,500 a month.

Annual cost at example salaries

What these figures include and exclude

• MPF is capped at HK$1,500 a month per employee, so above HK$360,000 a year the employer's statutory cost stays flat.
• Employees' compensation insurance is compulsory and priced by insurers; it isn't included.
• Severance and long service payments aren't included because they arise only on qualifying terminations. Since 1 May 2025, they can't be offset with mandatory MPF benefits for service from that date.
• The employee's 5% MPF contribution (on relevant income from HK$7,100 to HK$30,000 a month) and salaries tax are not employer costs.

Estimate your own cost

Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive. For worked examples at four salary levels, see cost to hire an employee in Hong Kong.

Hong Kong employment law is set mainly by the Employment Ordinance. Many entitlements depend on a continuous contract: from 18 January 2026, at least four weeks with the same employer and at least 17 hours in each week, or 68 hours in a four-week period.

Minimum wage

The statutory minimum wage is HK$43.1 an hour from 1 May 2026 (HK$42.1 before), averaged over the hours worked in each wage period.[2]

Statutory holidays

15 statutory holidays in 2026, including Easter Monday from 2026: 1 January, the first three days of Lunar New Year, Ching Ming, Easter Monday, Labour Day, the Birthday of the Buddha, Tuen Ng, HKSAR Establishment Day, the day after Mid-Autumn, National Day, Chung Yeung, Winter Solstice or Christmas Day (employer's choice) and the first weekday after Christmas. Good Friday is added from 2028 and the day after Good Friday from 2030.[4]

Annual leave

After each 12 months under a continuous contract, paid annual leave rises from 7 days (years 1 and 2) by one day a year to a maximum of 14 days from year 9.[4]

Sickness allowance

Employees under a continuous contract accumulate paid sickness days (2 a month in the first year, then 4 a month, up to 120). Sickness allowance is four-fifths of average daily wages, generally for sick leave of at least four consecutive days.[4]

Notice

No notice is needed in the first month of probation, and at least 7 days after it. After probation, under a continuous contract, notice is as agreed but at least 7 days, or at least 1 month if the contract is silent. Either side can pay wages in lieu of notice.[4]

Severance and long service payment

Severance payment is due after 24 months' service on dismissal for redundancy; long service payment after 5 years on dismissal for other reasons (not serious misconduct) and in some other cases. Either is two-thirds of the last month's wages (capped at HK$22,500) per year of service, up to HK$390,000.[4]

MPF offsetting (EOR relevance)

For employment starting on or after 1 May 2025, accrued benefits from the employer's mandatory MPF contributions can no longer be used to offset severance or long service payments. Transitional rules apply to employment that straddles that date.[4]

• From 1 January 2028

  Hong Kong adds Good Friday as a statutory holiday

  One more paid statutory holiday a year from 2028, and another from 2030.

• Effective 1 May 2026

  Hong Kong minimum wage rises to HK$43.1 an hour

  Check hourly and part-time pay close to the minimum.

• Effective 18 January 2026

  Hong Kong relaxes the 'continuous contract' test

  More part-time and irregular staff qualify for Employment Ordinance benefits such as paid leave, sickness allowance and severance.

See every country in the employment law changes tracker.

These EOR providers publish Hong Kong pages and starting prices that apply across their country coverage. Prices are their own published starting rates in USD, from our pricing tracker.

In Hong Kong, ask how the provider funds severance and long service payments now that MPF offsetting has ended, and which employees' compensation insurer it uses.

Compare providers for Hong Kong

• RemoFirst vs PlayrollIn Hong Kong: US$199 vs US$399 a month (published starting prices).
• Oyster vs RemoFirstIn Hong Kong: US$699 vs US$199 a month (published starting prices).
• Remote vs Globalization PartnersIn Hong Kong: US$599 vs US$599 a month (published starting prices).
• Deel vs RemoteIn Hong Kong: US$599 vs US$599 a month (published starting prices).

For each provider's products, pricing model and fit signals, see the EOR provider directory.

The usual alternatives are a private company limited by shares or a registered branch of your foreign company. Employing directly makes you responsible for MPF, insurance and Employment Ordinance compliance.

Running costs include accounting, tax filings, annual returns and payroll.

For a step-by-step version of this calculation, see EOR vs local entity: a break-even framework.

1. 1

   Define the role and salaryDay 0

   Agree the monthly salary, any contractual bonus, and the notice period.

2. 2

   Compare itemised quotes1–3 days

   Request Hong Kong quotes covering the fee, MPF, employees' compensation insurance, and how severance and long service payments are handled. Use the estimator to sanity-check totals.

3. 3

   Sign the commercial agreement

   Review termination costs, severance and long service payment allocation, IP assignment and personal data protection.

4. 4

   Contract and enrolment1–2 weeks

   The provider issues the employment contract, enrols the employee in an MPF scheme and arranges employees' compensation insurance.

5. 5

   Ongoing administrationMonthly

   Monthly payroll and MPF contributions, leave and holiday records, and the employer's tax return.

Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.

1. 1
   MPF System – Mandatory Contributions (Employees)

   Mandatory Provident Fund Schemes Authority

   Employer and employee each contribute 5% of relevant income, with minimum and maximum relevant income levels of HK$7,100 and HK$30,000 a month.

2. 2
   New Statutory Minimum Wage rate of $43.1 per hour takes effect today

   Hong Kong Government (info.gov.hk)

   Statutory minimum wage raised from HK$42.1 to HK$43.1 an hour on 1 May 2026.

3. 3
   A Concise Guide to the Employees' Compensation Ordinance

   Labour Department

   Employers must take out employees' compensation insurance (compulsory insurance).

4. 4
   A Concise Guide to the Employment Ordinance

   Labour Department

   Continuous contract (from 18 January 2026), statutory holidays (15 from 2026, 16 from 2028, 17 from 2030), annual leave, sickness allowance, notice, severance and long service payment, and the abolition of MPF offsetting from 1 May 2025.

Hong Kong has low statutory employer costs: 5% MPF capped at HK$1,500 a month, plus employees' compensation insurance. On most professional salaries, the EOR fee is the largest cost on top of salary.

The change to plan for is severance and long service payments. For service from 1 May 2025, they can no longer be offset with MPF, so ask any provider how it funds and charges for them.

Compare an EOR against your own company with our EOR vs local entity guide. For other Asia-Pacific markets, see Singapore and Japan.