A payroll company, also known as a payroll service provider, specializes in managing the comprehensive payroll functions of a business. Their primary role is to ensure that employees are compensated accurately and punctually, while maintaining compliance with all relevant tax laws and labor regulations.
Content Outline
Core Payroll Deliverables
The information below are based on our knowledge of the industry in Hong Kong. We’ve combined a rather comprehensive comparison without naming specific brands, in order to give you a good reference of what to expect in payroll service providers.
| Function | Description |
|---|---|
| Payroll Calculation | Compute employee salaries, including base pay, overtime, bonuses, and commissions, ensuring accuracy and adherence to employment contracts and statutory requirements. |
| Tax Withholding & Filing | Calculate and withhold appropriate amounts for salaries tax, and prepare necessary filings such as Employer’s Return (Form IR56B) and notifications for employee commencement or cessation (Forms IR56E/F/G) to the Inland Revenue Department (IRD). |
| MPF Administration | Enroll employees in Mandatory Provident Fund (MPF) schemes, calculate both employer and employee contributions, and ensure timely remittance to MPF trustees in compliance with the Mandatory Provident Fund Schemes Ordinance. |
| Leave Management | Track and manage various types of leave, including annual, sick, maternity, and paternity leave, ensuring compliance with entitlements under the Employment Ordinance. |
| Payslip Generation | Produce and distribute payslips detailing earnings, deductions, and leave balances, maintaining transparency and meeting statutory requirements. |
| Record Keeping | Maintain comprehensive payroll records, including wage details, leave records, and MPF contributions, for a minimum of seven years as mandated by law. |
| Salary Disbursement | Facilitate the timely payment of salaries through direct bank transfers or other agreed methods, ensuring employees receive their wages within the statutory period (typically within seven days after the end of the wage period). |
| Compliance Advisory | Provide guidance on employment laws and updates to ensure ongoing compliance with local labor regulations, including changes to minimum wage rates and statutory benefits. |
Compliance Responsibilities Specific to Hong Kong
By engaging a payroll company that comprehensively understands Hong Kong’s legal and regulatory landscape, businesses can ensure accurate payroll processing, maintain compliance, and focus on their core operations.
| Compliance Area | Details |
|---|---|
| Employment Ordinance Adherence | Ensure all payroll practices align with the Employment Ordinance, covering aspects such as wage payments, leave entitlements, and termination procedures. |
| MPF Scheme Compliance | Administer MPF contributions accurately and punctually, including enrollment of eligible employees and handling of contribution calculations and submissions. |
| Tax Reporting Obligations | Prepare and submit required tax forms to the IRD, including annual Employer’s Returns and notifications related to employee status changes, ensuring accuracy and timeliness to avoid penalties. |
| Data Protection | Safeguard sensitive employee information in compliance with the Personal Data (Privacy) Ordinance, implementing appropriate security measures to protect against unauthorized access or breaches. |
| Record Retention | Maintain detailed payroll and employment records for at least seven years, as required by law, to facilitate audits and inspections by regulatory authorities |
How Can FastLane Help?
FastLane is one of the best payroll service provider in Hong Kong, being well-versed in Hong Kong employer ordinance and MPF regulations.
Whether if it’s part time rosters, or commission schemes that gets your payroll complicated, we will get the job done.
