As of 1 May 2025, two significant employment law changes have taken effect in Hong Kong: the abolition of the Mandatory Provident Fund (MPF) offsetting arrangement and an increase in the statutory minimum wage. These reforms will have lasting implications for businesses, particularly in payroll management and employee benefits.
MPF Offsetting Abolished
Employers can no longer use mandatory MPF contributions to offset severance and long service payments. While voluntary MPF contributions and contractual gratuities may still be used for offsets, mandatory contributions must remain untouched, ensuring greater financial security for employees.
To support businesses during the transition, the government has introduced a 25-year subsidy scheme to assist with severance and long service payment costs. Employers should review their financial planning and compliance procedures to adapt to the new regulatory framework.
Minimum Wage Increase
Alongside the MPF changes, Hong Kong’s statutory minimum wage has now risen from HKD40 to HKD42.1 per hour. The monthly threshold for recording employees’ working hours has also increased to HKD17,200.
This adjustment aims to enhance wage protection for lower-income workers while balancing economic sustainability for businesses. Employers must ensure their payroll systems reflect the new minimum wage rates to remain compliant.
Supporting International Employers
For international businesses operating in Hong Kong, navigating evolving employment regulations can be complex—especially for those without dedicated HR staff on the ground.
Marbury’s HR and Payroll outsourcing services provide tailored solutions for clients, ensuring seamless compliance with Hong Kong’s evolving employment laws. From employment contracts to handling payroll adjustments and advising on statutory contributions, Marbury helps businesses remain compliant while freeing them to focus on core operations.
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For further information about the new changes, see the Labour Department’s official website. If your organisation needs guidance on adapting to these changes or general assistance to proactively manage your Hong Kong payroll obligations, Marbury’s HR and Payroll specialists are ready to assist. Please reach out to your usual Marbury relationship manager or contact us at info@marburys.com.
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