Hong Kong payroll: how it works and how to choose a provider
Monthly payroll for your own Hong Kong company: salary calculations, MPF contributions, IR56 filings, leave records and payslips. This guide explains what a good provider delivers each month, where the deadlines fall, and what to check before choosing one.
What is included
A complete monthly cycle, and the annual and ad-hoc filings around it.
- Monthly gross-to-net calculation: salary, allowances, overtime, commissions and bonuses
- MPF employer and employee contribution calculation, remittance file and payment by the 10th
- Payslips issued to every employee, in English and Chinese
- Bank payment file or direct disbursement from a client trust account
- Leave records: annual, sick, maternity, paternity and statutory holidays
- IR56E for new joiners, IR56F for leavers, IR56G for employees leaving Hong Kong
- Employer’s return (BIR56A) and IR56B forms every April
- Final payment, severance and long-service calculations on termination
You send changes by the cut-off; the provider sends back a payroll register to approve. After approval, payments and MPF run on the statutory dates.
- Changes and new joiners submittedBy the 20th
- Payroll register for your approval22nd–24th
- Salaries paid, payslips issuedLast working day
- MPF remitted to the trusteeBy the 10th
- IR56 forms as people join and leaveAs needed
The compliance a provider carries
Hong Kong payroll is arithmetically simple and procedurally unforgiving. These are the four regimes it touches.
MPF
5% each from employer and employee on relevant income between HK$7,100 and HK$30,000 a month; new joiners enrolled within 60 days; late contributions attract a 5% surcharge.
Employment Ordinance
Wages within seven days of the period end; wage and employment records kept for twelve months after an employee leaves; end-of-year payment rules.
Inland Revenue
IR56E within three months of a start, IR56F one month before a leaver’s last day, IR56G with payment withheld for employees leaving Hong Kong, IR56B annually.
Employees’ compensation
Compulsory insurance under the Employees’ Compensation Ordinance; the provider keeps the headcount and wage declarations current with your insurer.
Live within one payroll cycle
- Data collectionEmployee master data, current contracts, MPF scheme details, and year-to-date figures if the provider is taking over mid-year.
- Parallel runA good provider runs the first month alongside your existing process and reconciles to the cent before anything is paid.
- Go liveYour approver receives the register, approves, and payments, payslips and MPF go out on the statutory dates.
- Steady stateOne account manager, one cut-off, one invoice. Changes by email or through the portal.
Payroll, or EOR?
Payroll is for companies that already employ in Hong Kong. EOR is for companies that do not want to.
| Payroll outsourcing | Employer of Record | |
|---|---|---|
| Who is the employer | Your Hong Kong company | The provider’s Hong Kong company |
| You need | An incorporated company, an MPF scheme and EC insurance | Nothing in Hong Kong |
| The provider provides | Calculations, payments, filings, records | Employment, plus all of the payroll items |
| Best for | Companies with a Hong Kong entity, any headcount | Companies without one, 1–15 people |
| Switching | Move to EOR if you deregister the company | Move to payroll once you incorporate |
Ready to compare payroll providers
Ten providers ranked on MPF, IR56 filings, software and service. Or tell us the headcount, the current process and when you want the first run, and we will shortlist three.
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Payroll questions?
Is there a minimum headcount?
Rarely. Most providers in our ranking run payroll for a single employee and for companies with a hundred; check the minimum monthly fee rather than the minimum headcount.
Can a provider take over mid-year?
Yes. A good provider loads year-to-date figures so that the IR56B in April is complete and the MPF record is unbroken. Ask how they handle it before you switch.
Do employees pay tax through payroll?
No. Hong Kong has no pay-as-you-earn withholding. The employer reports salaries on the IR56B; the employee receives their own salaries tax assessment from the Inland Revenue Department and pays it directly.
Which MPF trustee will the provider use?
Yours, if you have a scheme — the established providers work with all of the approved trustees. If you are setting up for the first time, most will help you choose and complete the enrolment.
What software do providers use?
It varies, and it is worth asking. Look for a Hong Kong-hosted platform with an employee self-service portal for payslips and leave, and reports that export to Xero, QuickBooks and your general ledger. Our payroll ranking scores software separately from service.