C K Yau & Partners CPA Limited

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Company | Key Executives | Founder | Milestones
Hong Kong Taxation | Deadline for Tax Returns | Severance and Long Service Payment | Keeping Business Records
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Important Briefing / Severance and Long Service Payment

 

Details of terms for severance and long service payments are set out in the following table:

Terms Severance Payment Long Service Payment

Period of employment

Not less than 24 months under a continuous contract

Not less than 5 years under a continuous contract

Qualifying requirements

The employee is dismissed because of redundancy

The employee is dismissed but not because of:
- serious misconduct; or
- redundancy

Fixed-term employment contract expires without being renewed because of redundancy

Fixed-term employment contract expires without renewal

The employee is laid off

The employee dies

The employee resigns due to ill health

The employee aged >= 65 who resigns due to old age

Calculation:

- monthly-paid employee
- daily/piece rated employee

 

  • (Last month's salaries/wages x 2/3)* x reckonable years of service
  • Any 18 days' wages* chosen out of the employee's last 30 normal working days x reckonable years of service
* limited to $22,500 x 2/3

Mandatory provident fund

Employer's contributions in the mandatory provident fund can be withdrawn for payment of severance and long service payment

Maximum Amount

If the relevant date of termination of employment occurs on or after 1 October 2003 , the maximum amount of severance payment or long service payment is $390,000.

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