Payslip Health Check. What needs to be included?
Posted by: on 11 September 2017 in Compliance
The Hong Kong payroll system is relatively simple and clearly less complex than in mainland China. There is, for instance, no income tax withholding at source and only one mandatory social contribution, which goes to the national pension scheme.
According to the Employment Ordinance (Cap. 57), a pay slip is not mandatorily required to be given to employees but employers have to inform employee on a change of amount earned and any deductions made from the wages, and the information should include:
- Details of the amount earned, including overtime earnings (if any), by the employee; and
- Details and reasons for any deductions made from the wages of the employee.
Mandatory Provident Fund Schemes (General) Regulation (Cap. 485A) also requires a pay-record to be given to the employee no later than 7 working days after the payment or the last payment if there is more than 1 payment of mandatory contributions during the month. The pay-record must contain the following information:
- Amount of each payment of relevant income paid to the employee by the employer during the month;
- Amount of each mandatory contribution paid by the employer in respect of the employee during the month;
- Amount of each mandatory contribution deducted in respect of the employee during the month;
- Amount of each voluntary contribution paid by the employer in respect of the employee during the month, if any;
- Amount of each voluntary contribution deducted in respect of the employee during the month, if any;
- Date on which the contributions were paid to the approved trustee of the registered scheme concerned.
All these can be reflected in the pay slip you send to employees either in printed form or as an e-payslip. The content of the pay slip may vary in different companies as each company has the flexibility to determine additional remuneration components and benefits to their employees. However, here’s a sample you can refer to for the information that should be included in a pay slip in Hong Kong.
- Employee information
- Employee number
- Salary components
- Monthly base salary
Work contracts offer flexibility to define different remuneration components:
- Additional remuneration
- OT payment: overtime payment
There is no statutory work week time in Hong Kong. Overtime hours and pay rates are defined on the work contract.
- Leave and absence payments
Leave pay governed by Employment Ordinance and complex rules. Calculated on the basis of the employee’s average wages over the previous 12 months (excluding non-paid and non-fully paid periods)
- Holiday payment
Paid statutory holidays (after three months’ service)
- Annual leave payment
7 to 14 days according to length of service as required by the law. Employers are free to provide annual leave in excess of the above statutory minimum.
- Social contributions
- MPF (Mandatory Provident Fund) scheme.
Except the exempted person, the sole social contribution in Hong Kong. Paid by both employee (EE) and employer (ER), at the following rates as of June 2014:
|Monthly Relevant Income||ER||EE|
|Less than HKD7,100||Relevant income * 5%||Not required|
|HKD7,100 to HKD30,000||Relevant income * 5%||Relevant income * 5%|
|More than $30,000||$1,500||$1,500|
- Relevant Income
- Contribution Date
Some other important components that are not visible on the pay slip may include sick leave allowance, which – together with other remuneration of absence days – are usually considered a painstaking aspect of payroll. Check out here how ADP can advise and help you on payroll management.