Understanding Minimum Wage in Hong Kong [2024]

If you are looking to expand or start a company in Hong Kong, compliance with labour laws and regulations is essential, especially when it comes to minimum wages.

Hong Kong has a statutory minimum wage (SMW) set by the Minimum Wage Commission of the Labour Department, intended to protect low-income workers while allowing Hong Kong to remain competitive internationally.

This article will cover everything you need to know about Hong Kong’s statutory minimum wage, including its current requirements, who it applies to, what counts as wage and work hours, and how to calculate it to comply with regulations.

The current minimum wage in Hong Kong is HKD 40 per hour, starting from 1 May 2023. When dividing the total wage by the number of working hours, the resulting average payment must stay within the minimum wage rate. 

The rate is consistent across all districts and areas of Hong Kong and is subject to periodic review based on factors like the jurisdiction’s economic growth, labour market conditions, cost of living, level of social inclusion, and feedback from the general public and stakeholders. 

The minimum wage rate also applies equally across all ages, unlike in countries such as the United Kingdom, where the rate varies based on the worker's age.

Unless specified otherwise, the statutory minimum wage applies to all employees, which includes:

• Employees under any type of wage payment period (monthly, weekly, daily, hourly, or per piece basis)
• Employees under all types of employment contracts (permanent, full-time, part-time, day rates, piece-rated, and contracted staff.)

Employees With Disabilities

Employees with disabilities are entitled to the same protection and statutory minimum wage as other workers. However, they may request a productivity assessment to determine whether they should be paid at or above the minimum wage or at a rate proportional to their productivity.

This assessment is entirely voluntary and can only be requested by the employee. If an employee chooses not to undergo the assessment, they are still entitled to the minimum hourly rate of HKD 40.

While the statutory minimum wage generally applies to all employees, certain types of employment are exempt, including the following.

Live-in Foreign Domestic Helpers

Live-in foreign domestic helpers (FDHs) in Hong Kong are not covered by the Minimum Wage Ordinance. Instead, they are entitled to the Minimum Allowable Wage of HKD 4,990 per month, along with free food or a food allowance of at least HKD 1,236 per month. Like the statutory minimum hourly rate, the MAW is regularly reviewed by the Labour and Welfare Bureau.

Employers are also responsible for providing medical care, leave entitlements, and other welfare benefits to domestic workers. For more details, please refer to the guide on foreign domestic helpers provided by the Hong Kong Labour Department. 

Student Interns

The statutory minimum wage does not apply to student interns. This means that the employer does not legally have to pay minimum wage to students completing internships or work experience as part of their education, provided that the students are not employed by the company.

However, the employer is required by the Employment Ordinance to keep a document (or a copy) issued by the educational institution confirming that the work period is part of a programme and verifying the "student intern" status under the Minimum Wage Ordinance (Cap. 608).

Work Experience Students

Work experience students during a period of exempt student employment are not covered by or entitled to the statutory minimum wage. This exemption allows work experience students under 26 years old and their employers to agree on a continuous period of up to 59 days within the employment contract where minimum wage regulations do not apply.

The following criteria apply for this exemption:

1. The student must not have had any previous periods of exempt student employment in the same calendar year.
2. Before starting the current employment contract, the student must provide their employer with a statutory declaration confirming point (a). The exemption from the minimum wage is not valid if a work experience student has not agreed with the employer to consider a specific period as exempt student employment.

Please refer to this note for student employees for more information about student interns. 

Specific Individuals

Some individuals are exempt from the Employment Ordinance, such as:

• Family members living with the employer
• Those serving under a crew agreement under the Merchant Shipping (Seafarers) Ordinance
• Individuals on board a ship which is not registered in Hong Kong
• Registered apprentices under the Apprenticeship Ordinance

These can be considered wages and can be factored into end-of-year payments and minimum wage calculations. 

• Remuneration
• Earnings
• Allowances (including travelling allowances)
• Tips
• Service charges
• Contractual commission
• Contractual bonus
• Overtime pay is factored into wage calculations if it is being consistently provided or averaging at least 20% of the employee's monthly wages over the past 12 months.

However, the end-of-year payment amount can be based on the employment contract. If not specified, it typically equals one month's average wages and includes the aforementioned items.

The following may not be counted as wage:

• Value of accommodation, education, food, fuel, water, light, or medical care provided by the employer
• The sum payable to defray special expenses incurred by the nature of employment
• Employer's contribution to retirement scheme
• Non-recurrent travelling allowance or the value of any travelling concession or allowance for actual expenses incurred
• The gratuitous commission, allowance, bonus, etc.
• Gratuity payable on completion or termination of a contract of employment

For more information, please refer to this Hong Kong labour department’s concise guide on wages.

The hours worked by an employee during a wage period include any time they spend:

• Being present at their work, regardless of whether they're given tasks or training at that time.
• Travelling as part of their job, such as meeting clients or sending documents as per instruction, is included. However, commuting between their home and regular workplaces within Hong Kong is excluded. Commuting to a workplace outside Hong Kong that is not their usual workplace is included in hours worked.
• On-call or standby time, during which the employee is required to be at a place of employment as per the employment contract or employer's agreement, can be counted as hours worked.
• Meal breaks may be deemed as hours worked if the employee is obligated to be on duty or present at work as per their contract or if there is mutual agreement between the employer and employee.

The compensation provided to an employee for any given wage period, when averaged across the total number of hours worked during that period, must not fall below the minimum wage rate.

You can use this formula to calculate the minimum wage amount:

For example, if an employee works 100 hours during a wage period and the SMW rate is HKD 40 per hour, the wage floor for that period would be HKD 4,000. If an employee works 90 hours in a wage period, their total wages should be at least HKD 3,600 (90 hours x HKD 40 per hour) to comply with the statutory minimum wage.

We recommend using the Labour Department's Minimum Wage Reference Calculator to estimate the minimum wage owed. The tool factors in details such as hours worked and rest days to check if the employee’s salary meets the requirement.

Note that the calculation includes only hours worked and excludes non-working periods, such as rest days, holidays, or leave (e.g., holiday pay, annual leave, maternity leave). For more information on entitlements, such as leave days, you may refer to the reference guidelines for employers and employees.

Failing to pay the statutory minimum wage is a violation of employment law. Employers who intentionally and without sufficient reason fail to pay wages on time may face fines up to HKD 350,000 and imprisonment for three years if found guilty. 

If the wages owed to the employee for the wage period fall below the minimum wage, the employee has the right to receive the shortfall. Any provision in an employment contract that seeks to undermine an employee's rights under the minimum wage law will be considered invalid.

In cases of an offence related to wages committed with the consent, knowledge, or negligence of directors, managers, secretaries, or similar officials, those individuals may also be guilty of the offence. They could face similar punishment upon conviction.

For domestic helpers, employers may face fines of up to HKD 150,000 and imprisonment for up to 14 years if they intend to underpay them or provide false wage information.

For employers, ensuring legal compliance with minimum wage laws is just the beginning. Building wage structures and practices that create a fair and equitable work environment can significantly enhance employee satisfaction and retention, making a 

If you’re planning to run a Hong Kong business, understanding the Work Visa Schemes and setting up your company’s payroll are essential next steps to ensure a smooth operation.