Understanding the Statutory Minimum Wage in Hong Kong: What Employers Need to Know to Stay Compliant

The statutory minimum wage in Hong Kong is a key labour regulation ensuring fair compensation for workers while balancing employer obligations. 

Effective May 1, 2025, the statutory minimum wage will increase from HK$40 per hour to HK$42.1 per hour. The monthly wage threshold for recording employee working hours will also rise from HK$16,300 to HK$17,200. The increase will impact all businesses operating in Hong Kong. 

This article outlines the latest wage updates, employer obligations, and compliance strategies to help businesses adapt.

Have questions about payroll in Hong Kong? Contact us at InCorp today

Latest Statutory Minimum Wage Rates in Hong Kong

The statutory minimum wage in Hong Kong has undergone periodic adjustments since its introduction. Below is a summary of the latest and historical rates:

Employers should note that failure to comply with the new wage rates can result in legal consequences, including penalties and reputational risks.

Also Read: Guide to Payroll in Hong Kong

Coverage: Who Is Affected by the Statutory Minimum Wage in Hong Kong?

The statutory minimum wage in Hong Kong applies to all employees, including:

• Monthly-rated, daily-rated, and hourly-rated employees
• Permanent, casual, full-time, and part-time employees
• Employees under a continuous contract and those outside of it

Exemptions: Certain categories of workers are excluded from the statutory minimum wage in Hong Kong, including:

• Persons to whom the Employment Ordinance does not apply
• Live-in domestic workers (regardless of nationality, gender, or race)
• Student interns and work experience students during exempt employment periods

Also Read: Payroll Efficiency Meets Employee Satisfaction: Building a Happier Workforce

How to Calculate the Minimum Wage in Hong Kong

Employers must ensure that employees receive wages that meet or exceed the statutory minimum wage in Hong Kong. The calculation formula is as follows:

Minimum Wage Payable = Total Hours Worked × SMW Rate

For example:

• If an employee works 180 hours per month, their minimum wage must be 180 × HK$42.1 = HK$7,578.
• Employers must also consider deductions (e.g., meal breaks) as stipulated in employment contracts.

Employer Obligations Under the Minimum Wage Ordinance

Hong Kong’s Minimum Wage Ordinance requires employers to maintain proper wage and employment records. Key employer responsibilities include:

• Ensuring compliance with the new wage rate: No employee should receive less than HK$42.1 per hour after May 1, 2025.
• Recording total hours worked: Employers must track and document their working hours if an employee earns less than HK$17,200 per month.
• Adhering to payroll compliance standards: Wage records must be maintained for at least seven years, and failure to comply may lead to penalties.

Employers must assess their payroll systems to ensure compliance. Consider the following questions:

• Does your payroll system prevent hourly wages from falling below the new minimum wage?
• Do you have a reliable system for recording total hours worked for employees earning below the wage threshold?

The Impact of Hong Kong’s Minimum Wage Increase on Businesses

The adjustment of the statutory minimum wage in Hong Kong has economic and social implications, including:

• Increased labor costs: Small and medium-sized businesses must budget for higher wage expenses.
• Improved employee livelihood: A higher wage ensures better financial stability for low-income workers.
• Business hiring strategies: Companies may reassess staffing levels, automation strategies, or employee benefits to offset costs.

Future Trends: Will the Statutory Minimum Wage in Hong Kong Continue to Rise?

With the government introducing annual reviews of the SMW, businesses should prepare for regular adjustments. The policy shift aligns with economic conditions and labor market demands, suggesting a potential gradual increase in the minimum wage over the coming years.

Comparing the statutory minimum wage in Hong Kong to other Asia-Pacific regions:

• Singapore: No universal minimum wage, industry-specific guidelines apply.
• Japan: Minimum wage varies by region, averaging HK$50–HK$70 per hour.
• South Korea: HK$60+ per hour, with annual reviews.

Employers should plan for future payroll adjustments by implementing scalable wage policies.

Where To Next?

With the statutory minimum wage in Hong Kong increasing to HK$42.1 per hour from May 1, 2025, businesses must ensure compliance to avoid legal repercussions. Employers should review payroll systems, track employee hours, and update wage policies accordingly.

Navigating payroll compliance can be complex. InCorp Hong Kong offers expert guidance to help businesses align with minimum wage regulations. Our team provides:

• Payroll compliance checks
• Custom payroll solutions
• Regulatory consultation

For assistance, schedule a call with InCorp Hong Kong’s payroll compliance team or subscribe to our newsletter for the latest updates on employment regulations.