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 set by the Minimum Wage Commission of the Labour Department, intended to protect the lowest earners in the country 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.

🔎 Tip: Planning to hire in Hong Kong? Explore our complete guide to hiring for business in Hong Kong 

What Is the Minimum Wage in Hong Kong?

The most current statutory minimum wage (SMW), with effect from 1 May 2023, sits at HKD 40 per hour.

The statutory minimum wage requirement applies across all of Hong Kong and does not vary depending on location.

When dividing the total wage by the number of working hours, the resulting average payment must stay within the minimum wage rate.

Unlike countries such as the United Kingdom, the minimum wage does not depend on the workers' age.

The government takes into account multiple factors to determine a balanced minimum wage rate. These factors include the country's general economic and labour market condition, level of social inclusion, and the general public and stakeholder views.

Who Does Statutory Minimum Wage Apply To?

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.)

Who Does Statutory Minimum Wage Not Apply To?

Live-in Foreign Domestic Helpers

• Live-in foreign domestic helpers in Hong Kong are not subject to the statutory minimum wage of HKD 40 per hour. Instead, they are entitled to the Minimum Allowable Wage (MAW) of HKD 4,870 per month and free food or a food allowance of at least HKD 1,236 per month.
• Employers are also responsible for providing medical care, leave entitlements and more.
• For more details, please consult this guide on foreign domestic helpers provided by the Hong Kong Labor Department.

Internships

• Students completing an internship or work experience as part of their course of education without employment status with companies. In this case, the employer does not legally need to pay them the statutory minimum amount. 
• However, the employer needs to have a confirmation of “student intern” status under the Minimum Wage Ordinance (Cap. 608) document as proof of agreement.

Work Experience

• Work experience students during a period of exempt student employment. This refers to a special arrangement between a work experience student (under 26 years old) and their employer. This agreement allows for a continuous period of up to 59 days within their employment contract to be considered exempt from minimum wage regulations. 

For this to apply:

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 does not hold 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

• Individuals exempt from the Employment Ordinance such as family members living with the employer, individuals serving under the Merchant Shipping (Seafarers) Ordinance, and registered apprenticeship under the Apprenticeship Ordinance. 

Employees With Disabilities

Any employee with a disability enjoys the same protection and statutory minimum wage as anyone else.

However, they also have the right to conduct a productivity assessment to determine their productivity.

Importantly, this decision rests solely with the employees; their employers cannot pressure them to undergo the assessment. If they decide not to undergo the assessment, they are still entitled to receive at least the minimum wage of HKD 40 per hour.

To find out the details, please refer to this productivity assessment for employees with disabilities page.

What Qualifies as Wage?

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.

Definition of Hours Worked

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. 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.

For more information, please refer to this list of FAQs on hours worked

How to Calculate Hong Kong Minimum Wage

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.

This can be calculated by multiplying the total hours (including any part of an hour) worked by the employee during the specified period by the statutory minimum wage rate.

Minimum wage = Total number of hours worked by the employee in the wage period × statutory minimum wage (SMW) rate 

We recommend using the Labour Department's Minimum Wage Reference Calculator to compute the minimum wage as a reference.

After entering all the information, such as hours worked, rest days, wages, and generating a report, the program will calculate the amount of minimum wage the employee is entitled to and whether or not they are being paid that amount based on their current salary.

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.

Note that the minimum wage calculation only includes hours worked, excluding periods of non-work such as rest days or holidays. As a result, payments for non-working time (such as rest day pay, holiday pay, paid annual leave, paid maternity leave, etc.) may not be factored into the calculation.

📌 Given the various scenarios, please consult the Employment Ordinance guide and this reference guidelines for employers and employees for details on entitlements for different types of leave days, whether rest days and meal times should be paid, and how to incorporate them into minimum wage calculations. 

What Happens If an Employer Fails to Pay Minimum Wage?

Failure to pay the statutory minimum wage as required by employment law is a violation. 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. 

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.

Any provision in an employment contract that seeks to undermine an employee's rights under the minimum wage law will be considered invalid.

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

Final Words

For employers, besides legal compliance, it's crucial to consider wage structures and practices that promote a fair and equitable work environment, leading to employee satisfaction and retention.

If you're considering relocating to start a business and need to hire employees, navigating Hong Kong Work Visa Schemes and getting hold of the payroll of your Hong Kong company are other essential steps to prepare for.