Hiring in Hong Kong means taking on a clear set of statutory obligations around leave, benefits, and contributions. The Employment Ordinance sets the floor, and most entitlements only apply once an employee qualifies as a “continuous contract” worker. Get the thresholds wrong and you could be under-providing benefits without realising it. This guide walks through every major obligation so you know exactly what you owe your Hong Kong employees.
The continuous contract and the 468 rule
Most statutory leave entitlements in Hong Kong only apply to employees employed under a continuous contract. From January 18, 2026, the qualifying threshold changed.
Under the updated rule, an employee is on a continuous contract if they work 17 or more hours per week, or 68 or more hours over any 4-week period. This replaces the previous “418” rule, which required 18 or more hours per week over 4 consecutive weeks. The new threshold is commonly called the “468” rule.
If your employee meets either of the two criteria above, they’re entitled to the full suite of statutory benefits covered in this guide. For employers managing part-time or variable-hours workers, it’s worth reviewing schedules against this threshold regularly.
Annual leave
Hong Kong’s annual leave entitlement is modest at the start of employment and increases with tenure. Here’s how it scales:
- Years 1–2: 7 days per year
- Each additional year of service: entitlement increases by 1 day
- Maximum: 14 days per year, reached after 9 years of service
Annual leave is paid at the employee’s average daily wage over the preceding 12 months. Employees must take their leave within 12 months of the entitlement arising, and you’re required to give at least 14 days’ notice of scheduled leave dates.
Where an employee’s annual leave entitlement exceeds 10 days, you can offer payment in lieu for the portion above 10 days. You can’t substitute payment for the first 10 days.
Public holidays
Statutory holiday entitlement
Hong Kong has 15 statutory public holidays in 2026. Easter Monday was added to the list from 2026 onwards under the Employment Amendment Ordinance 2021, bringing the total up from 14.
Employees who have been employed under a continuous contract for 3 or more months are entitled to holiday pay for each statutory holiday. That pay is calculated at the average daily wage over the preceding 12 months.
What this means for scheduling
If a statutory holiday falls on a rest day, you’re required to grant a substitute holiday. It’s worth building this into your leave tracking system so no entitlements slip through.
Sick leave
Accrual and pay rate
Employees accrue 2 paid sick days for each month of service, up to a maximum of 120 days. Sick leave is paid at 80% of the employee’s average daily wage, not the full rate.
Documentation requirements
A valid medical certificate is required for paid sick leave. Without one, you’re not obligated to pay. In practice, you should make your documentation requirements clear in the employment contract so there’s no ambiguity when an employee calls in sick.
Maternity leave
Duration and pay
Employees who have been on a continuous contract for at least 40 weeks are entitled to 14 weeks of paid maternity leave. Pay during maternity leave is set at 80% of the employee’s average daily wage.
Notice and timing
Employees should give you notice of their intended leave as soon as reasonably practicable. Leave can generally begin 2 to 4 weeks before the expected birth date, depending on what the employee chooses and what you agree.
It’s worth noting that Hong Kong’s maternity leave entitlement is now among the more generous in Asia, and the 80% pay rate is a meaningful cost to factor into your employment budget for roles filled by employees who may take parental leave.
Paternity leave
Entitlement and pay
Fathers employed under a continuous contract for at least 40 weeks are entitled to 5 working days of paid paternity leave. Like maternity leave, this is paid at 80% (four-fifths) of the employee’s average daily wage.
Timing and notice
Paternity leave can be taken from 4 weeks before the expected birth date to 14 weeks after. Employees are required to give 3 months’ notice of the expected birth. If that’s not possible, 5 days’ notice is acceptable.
Mandatory provident fund as an employee benefit
The Mandatory Provident Fund (MPF) is Hong Kong’s retirement savings scheme, and employer contributions count as a real part of your employee’s total compensation package.
As an employer, you contribute 5% of the employee’s relevant income into their MPF account each month, capped at HKD 1,500 per month. Employees make a matching contribution on their own side. Employees can access their MPF savings when they reach age 65, or on permanent departure from Hong Kong.
Because the MPF is compulsory and carries a monetary cost, it should be factored into your total employment cost calculations from day one rather than treated as an afterthought.
Managing hong kong leave obligations through an Employer of Record
Tracking continuous contract status, accruing leave correctly, processing MPF contributions, and staying current with legislative changes like the 2026 468 rule update takes sustained administrative effort. For companies without a local entity in Hong Kong, an Employer of Record (EOR) handles all of this on your behalf.
An EOR employs your Hong Kong staff under its own local entity, taking on the legal responsibility for payroll, statutory contributions, and leave compliance. You retain full day-to-day control of the work. This structure means you can hire in Hong Kong quickly without needing to set up a local company, and your team’s entitlements are managed correctly from the start.
If you’re evaluating providers, comparing EOR services across cost, coverage, and compliance depth will help you find the right fit for your team size and hiring plans.
Book a demo to see how RemotePass manages leave and benefits compliance in Hong Kong.
Frequently asked questions
Does the 468 rule apply to all employees, or just new hires from january 2026?
The updated continuous contract threshold applies from January 18, 2026, and covers all employment relationships at that point, not just new hires. If you have existing part-time employees who previously fell under the old 418 threshold, you’ll need to reassess whether they now qualify as continuous contract employees under the new rule.
Can you pay out annual leave instead of letting employees take it?
Only for the portion of annual leave that exceeds 10 days. The first 10 days of annual leave entitlement must be taken as actual leave. If an employee is entitled to 12 days, for example, you can offer payment in lieu for up to 2 of those days, but not the base 10.
Is mpf required for all employees, including expatriates?
Most employees working in Hong Kong are covered by the MPF scheme, including some expatriates. There are exemptions for certain categories, including employees on short-term contracts of less than 60 days and some cross-border workers covered by overseas retirement schemes. You should confirm the status of any overseas hires with a local adviser before assuming an exemption applies.
What happens if a public holiday falls during an employee’s annual leave?
If a statutory holiday falls while an employee is on annual leave, the holiday doesn’t count as a day of annual leave. The employee retains that annual leave day and is entitled to an alternative day off in lieu of the holiday.
