Annual Leave in Hong Kong – Everything You Need to Know

The annual leave Hong Kong is per the country’s EO or Employment Ordinance. It dictates that all Hong Kong employers provide their employees paid seven-day or more time off, depending on their years of service in the company.

Employees can avail of this benefit after working with the company for a year. The employee may use this annual leave for whatever reason, such as vacationing or resting at home. Typically, this type of leave is part of the employment contract.

The employee entitled to annual leave Hong Kong must use it within the next 12 months. This paid leave must be used as an unbroken period of seven days. When the employee is entitled to an annual of more than seven days, the annual leave days exceeding the seven days may be used by the employee non-continuously.

Annual Leave Hong Kong Categories

Most global jurisdictions have rules that determine the statutory or minimum leave obligations that firms must follow. For example, in Hong Kong, annual leave have two categories:

Statutory or Minimum Annual Leave

This annual leave type is set by the Employment Ordinance provisions, which take effect after the initial year of service to the company. This right increases with the number of years of employment.

Contractual or Promised Annual Leave

Note that the first category sets the most negligible annual leave Hong Kong benefit, denoting that employers can give more as they deem fit. Also, many employers provide a yearly leave beyond the statutory requirements. This category, known as the contractual or promised annual leave, is legalized based on specific employment contract terms, including the firm’s yearly leave rule, if applicable.

However, when the engagement contract shows no distinction between statutory and contractual annual leave, companies will follow EO requirements. So, what does this mean? It simply means that only employees under an unceasing contract exceeding 12 months are allowed to enjoy Hong Kong’s annual leave.

Annual Leave Hong Kong Period

An employee’s claim to Hong Kong’s annual leave builds up progressively from the initial seven days up to a 14-day top limit according to the length of employment, as shown below. Also, an employee hired under an unbroken contract for 12 months, subject to renewal, is entitled to paid annual leave.

Years of Employment	Days of Annual Leave Privilege
1 and 2	7
3	8
4	9
5	10
6	11
7	12
8	13
9 and above	14

Annual Leave Payment

The daily compensation rate for Hong Kong’s annual leave is calculated by way of the average wage per day of the employee for the last 12 months before the annual leave dates. The computation of the daily compensation rate excludes the days when the employee did not get paid total salaries, such as during rest days, sick leave, and others.

How Premia TNC Hong Kong can help

We understand that all Hong Kong employers must keep and maintain payroll records of the employees for at least seven years. On top of that, employers are duty-bound to report remuneration paid to employees. And this is done by submitting an annual Employer’s Return to Hong Kong Inland Revenue Department.

Since the Employment Ordinance in Hong Kong covers all employees and provides them with broad rights and protections, it can be confusing and complicated to follow these labor laws. And this is where we come in. We offer Payroll Services that simplify the compliance process in Hong Kong.

By contacting us today, we can assist with issues concerning company contract terms; statutory holidays; Mandatory Provident Fund (MPF) payments; sick, annual, and maternity leaves; besides severance and long-service costs.

Outsourcing payroll to us saves time and resources, empowering firms to focus on their businesses. We tailor each client’s payroll to their specific requirements while ensuring that the payroll summary is accurate and made on time.