The answer first
Hiring your first employee in Hong Kong brings a short list of legal obligations that start on the first day of employment. None is complicated, but several carry criminal penalties if missed, in particular employees' compensation insurance and MPF.
Before day one
- Insurance
- Employees' compensation insurance is compulsory and must be in force before the employee starts
- Terms
- Agree the terms of employment, including wages and wage period, and give them in writing
- Right to work
- Check the employee's right to work in Hong Kong
- MPF
- Enrol the employee within the first 60 days
- Tax
- Diarise the IR56E notification to the IRD within 3 months
Your first-employee checklist
| Step | Obligation | Deadline |
|---|---|---|
| 1 | Employees' compensation insurance in force (minimum cover HK$100 million per event for up to 200 employees); notice of insurance displayed at the workplace | Before employment starts |
| 2 | Check identity and right to work (Hong Kong identity card, or valid visa permitting employment) | Before employment starts |
| 3 | Written employment contract or terms, including wages, wage period, notice period and benefits | Before employment starts |
| 4 | Enrol in an MPF scheme (employees aged 18 to 64) | Within the first 60 days |
| 5 | Notify the Inland Revenue Department (Form IR56E) | Within 3 months of the start date |
| 6 | Set up payroll and wage and employment records | From the first wage period |
| 7 | Pay wages | Within 7 days after the end of each wage period |
Core Employment Ordinance rights
Most employment rights depend on whether the employee is employed under a continuous contract. From 18 January 2026, an employee is under a continuous contract if employed by the same employer for four weeks or more and working at least 68 hours in total in each four-week period (the "468 rule"). This replaced the earlier rule of 18 hours a week.
| Entitlement | In brief |
|---|---|
| Statutory minimum wage | HK$43.1 per hour from 1 May 2026; reviewed regularly |
| Statutory holidays | 15 days in 2026, rising in later years |
| Rest days | At least one rest day in every 7 days for continuous-contract employees |
| Paid annual leave | 7 days a year after the first 12 months, rising to 14 days with length of service |
| Sickness allowance | Four-fifths of average daily wages, once sufficient paid sick days have accumulated and conditions are met |
| Maternity and paternity leave | 14 weeks' maternity leave and 5 days' paternity leave, subject to conditions |
| Severance and long service payments | Payable in qualifying cases; MPF offsetting rules changed on 1 May 2025 |
Please confirm current figuresMinimum wage, statutory holidays and certain thresholds change by legislation. We confirm the current figures when you hire.
MPF in brief
- Employer and employee each contribute 5% of relevant income; the employee's contribution is deducted from wages.
- Mandatory contributions are capped at HK$1,500 a month each once income exceeds HK$30,000 a month. Employees earning less than HK$7,100 a month do not contribute, but the employer still does.
- Contributions are paid to the trustee on or before the 10th day of the following month.
- Failing to enrol an employee is an offence carrying a fine of up to HK$350,000 and 3 years' imprisonment.
Common first-hire mistakes
| Mistake | Why it matters |
|---|---|
| Treating an employee as a "freelancer" to avoid obligations | Employment status depends on the real relationship, not the label |
| Starting work before insurance is in place | An offence: fine up to HK$100,000 and 2 years' imprisonment |
| Hiring someone without the right to work | A serious offence for the employer |
| Paying a director without reporting it | Director fees and salaries must be reported to the IRD |
| No written terms | Disputes are harder to resolve and the employer carries the burden of proving the terms |
Key takeawayGet the paperwork right at the start: insurance, written terms, MPF enrolment and the IR56E. It takes a day to set up and protects the business for the whole employment relationship.
How DBMS Global can help
- A first-hire checklist and template documents, reviewed by a lawyer where specialist drafting is needed.
- Payroll, MPF enrolment and monthly contributions.
- IR56 notifications and the annual Employer's Return.
- Employment visa applications where your new hire needs one.
Official references
- Employment Ordinance (Cap. 57) and Labour Department guidance, www.labour.gov.hk
- Employees' Compensation Ordinance (Cap. 282); Minimum Wage Ordinance (Cap. 608)
- Mandatory Provident Fund Schemes Authority, www.mpfa.org.hk
- Inland Revenue Department: IR56 forms, www.ird.gov.hk