When a Hong Kong employer posts staff to the Mainland or overseas, salaries tax follows where the employment is, not where the person is paid. Income from a non-Hong Kong employment is exempt if the employee's visits to Hong Kong total no more than 60 days in the year. The employer must notify the department before someone leaves for over a month.
Salaries tax is charged on income arising in or derived from an office or employment of profit in Hong Kong, including pensions. An employment is Hong Kong employment when the contract is negotiated, signed or enforceable in Hong Kong, the employer is resident here and the pay is made in Hong Kong, although the department looks at all facts and no single factor decides. The source of the employment is separate from where the work is done.
Income from services rendered in Hong Kong is chargeable to Hong Kong salaries tax, subject to a specific relief for non-Hong Kong employment: if the employer is outside Hong Kong and the employee's visits to Hong Kong do not exceed 60 days in the year, the income is exempt. This is why the day count matters so much. For an employee with a Hong Kong employment who is posted overseas, whether work done abroad stays taxable depends on specific statutory relief and the facts, including how long the services abroad last and whether the host country taxes the income, so confirm the position against the department's guidance.
Do not treat 60 days as a safe harbour for staff on a Hong Kong employment contract. The department looks at the whole arrangement, and a company that keeps the contract, the payroll and the line management in Hong Kong should ask an adviser which relief, if any, applies.
The host country can tax the person on work performed there. For the Mainland, individual income tax applies by residence and by the place where work is done. The arrangement between the Mainland and Hong Kong on avoidance of double taxation provides that employment income is generally taxed where the work is performed, with a limited relief for short stays by employees of non-resident employers when the Mainland days are below the arrangement's threshold and the cost is not borne by a Mainland permanent establishment.
In practice, a Hong Kong employee who works in Shenzhen for four days a week may be taxable in the Mainland for those days, and in Hong Kong for the rest. Employers often provide tax equalisation or tax advice to such employees, and the employer must plan for withholding or reporting duties where host-country rules require them.
The employee's days must be counted from the first day of the posting. Collect travel dates, boarding passes or entry and exit records, and keep a summary per employee for each tax year in both jurisdictions.
Plan the first six months in practice: agree who books the Mainland tax adviser, who tracks the employee's days, who communicates with the employee about their personal tax filings, and who owns the exit notice when the posting ends. Without named owners, each task falls between HR, finance and the line manager.
When an employee is about to leave Hong Kong for more than a month, the employer must give the Inland Revenue Department notice on form IR56G at least one month before departure, and may be directed to withhold payments until the department clears the employee. Include assignments that begin with a leave of absence or a short visit that later turns into a posting.
The employer's return for the year must still list the employee and the income, and mark the part, if any, claimed as outside Hong Kong. The department may ask for evidence. Plan the payroll split before the posting begins: the amounts of salary, allowances, housing and school fees, and which entity bears them.
If the employee is paid by both the Hong Kong employer and a host entity, reconcile the totals and decide who reports what. Duplicate or missing reporting is a trigger for queries in both countries.
MPF obligations depend on whether the employee is employed in Hong Kong and the terms of the posting. Generally an employee who remains under a Hong Kong employment contract continues to be covered, while a person who becomes employed by a foreign entity under a local contract may fall outside. Because the rules have exceptions, ask the MPF Authority or your trustee before stopping contributions for anyone sent abroad.
Leave, sickness and termination entitlements under the Employment Ordinance follow the employment contract that has a Hong Kong link. A posting letter should say which law governs, who pays, what happens on return and which entitlements continue. Include housing, schooling, home leave and medical cover, and say who bears host-country social insurance costs.
Record the end of the assignment as clearly as the start. A person who is expected to return in two years and stays for five generates tax and residency questions on both sides.
For each posted employee keep the posting letter, contract, start and end dates, a table of days in Hong Kong and in each host country, copies of the IR56G, the payroll breakdown and copies of host-country tax filings. A shared spreadsheet is workable for a handful of people; for more, put the key dates in one system.
4softhr is an HR and time-tracking module that holds employees, leave and timesheets, so start dates, assignment dates and absences are in one place. It does not calculate payroll or tax and does not file notices; the filings are yours. 4notify sends SMS and e-mail messages from your account, which HR can use to remind a manager that an IR56G is due; the message and the timing are set by you.
Days worked in and outside Hong Kong are not recorded systematically, so the year-end count relies on memory and immigration records.
Record each employee’s days in and outside Hong Kong in your own spreadsheet, together with entry and exit records, and confirm the tax treatment with an adviser. 4softhr does not track or export posting days.
Work visa, insurance and posting document expiry dates are buried in email and easily missed.
Note visa, insurance and posting document expiry dates in your calendar; you can send your own SMS or e-mail from 4notify. There are no automatic expiry reminders.
Income from a non-Hong Kong employment is exempt if the employee's visits to Hong Kong do not exceed 60 days in the year. For a Hong Kong employment the relief for work abroad is narrower and depends on the statutory conditions and the facts. The contract and the day count matter more than the job title, so get tax advice before the posting begins.
It is the notice an employer gives the Inland Revenue Department at least one month before an employee leaves Hong Kong for more than a month. The department can ask the employer to withhold payments until it clears the employee's tax. Late notice can leave the employer liable. Add the notice to your posting checklist and record the date it was filed.
It depends on whether they stay on a Hong Kong employment contract. Employees who remain employed by the Hong Kong employer generally continue to be covered, while those who move to a local contract with a foreign entity may fall outside the scheme. Exceptions exist, so ask the MPF Authority or your trustee before you stop contributions.
Yes. The Mainland can tax employment income for work performed there, and the arrangement with Hong Kong gives limited relief for short stays by employees of non-resident employers. Both jurisdictions look at days of presence, so keep exact day counts, travel records and payroll details and ask a Mainland adviser how the rules apply to the person.
Employee and leave records; tax and visa rules are checked with advisers and the authorities.
