The cost of payroll services in Hong Kong depends on several factors, including the size of your company, payroll complexity, and the level of service you require (basic salary processing vs. full compliance and reporting). Here’s a general breakdown:
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Typical Pricing Models
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.
| Category | Basic Package | Standard Package (SMEs) | Enterprise/Full Compliance |
|---|---|---|---|
| Typical Clients | Startups, Sole Proprietors | SMEs (10–50 employees) | Large Enterprises (50+ employees), MNCs |
| Monthly Cost | HKD 100 – 300 per employee | HKD 1,500 – 5,000 flat fee | From HKD 10,000+ (custom quoted) |
| Payroll Processing | ✔️ Salary calculations | ✔️ Salaries + MPF + Allowances | ✔️ Salaries + Complex Benefits + Bonuses |
| Payslip Generation | ✔️ E-payslips only | ✔️ E-payslips & PDF Reports | ✔️ Customisable Payslips + Branding |
| MPF Contributions | ❌ Not included or manual | ✔️ Full MPF processing | ✔️ Complex MPF schemes & advisory |
| Tax Filings (IR56) | ❌ Not included | ✔️ IR56B basic filing annually | ✔️ IR56B, F, G, M + Tax Clearance |
| Leave & Absence Management | ❌ Not included | ✔️ Basic leave tracking | ✔️ Integrated with HR systems |
| End-of-Service Calculations | ❌ | ✔️ Gratuity handling (basic) | ✔️ Complex gratuity & severance packages |
| Payroll Frequency | Monthly only | Monthly or Bi-weekly | Fully customisable |
| System Integration | ❌ Manual exports only | ✔️ Xero, QuickBooks integration | ✔️ Full HRIS/ERP integration (Workday, SAP) |
| Expatriate Payroll | ❌ Not available | ✔️ Limited (IR56F support) | ✔️ Full expatriate tax services |
| Onboarding/Offboarding | Manual | ✔️ Included | ✔️ Full compliance and advisory |
| Audit Support | ❌ Not provided | ✔️ Limited | ✔️ Full support, including audit preparation |
| Data Security | Basic (shared platforms) | Encrypted systems | Enterprise-grade security & compliance certifications (ISO 27001) |
| Service Support | Email only | Email + Phone (during office hours) | Dedicated Account Manager + 24/7 Support |
Key Factors Affecting Cost:
1. Employee Headcount
Direct Impact: Most providers price their services either per employee or based on volume tiers.
Threshold Considerations:
- Under 20 employees: Typically eligible for flat-rate SME packages.
- 20–50 employees: Mid-tier pricing with moderate volume discounts.
- 50+ employees: Custom enterprise-level pricing, often with negotiated rates.
Why It Matters: The administrative workload scales directly with employee volume, influencing both base fees and variable costs.
2. Payroll Complexity
Components Involved:
- Multiple pay structures (fixed, hourly, commissions, bonuses).
- Overtime calculations under the Employment Ordinance.
- Variable allowances (housing, transportation, meal allowances).
Impact: Complex payroll structures require additional processing time and more advanced payroll systems, increasing service fees.
3. Compliance Requirements
Statutory Obligations:
- Mandatory MPF contributions and scheme administration.
- Inland Revenue Department (IRD) reporting: IR56B (annual), IR56E/F/G (employee onboarding/offboarding, tax clearance).
- Handling leave encashments, end-of-service gratuity, and long-service payments.
Why It Adds Cost: These tasks require expert knowledge to avoid penalties and ensure accurate, timely submissions.
4. Frequency of Payroll Runs
Standard: Monthly payroll cycles.
Higher Frequency: Bi-weekly or weekly cycles increase administrative overhead and processing fees.
Notes: Companies in industries like hospitality or retail with high turnover and hourly staff typically incur higher payroll costs due to frequent pay runs.
5. Expatriate Payroll & Taxation
Additional Services:
- Tax equalisation and hypothetical tax calculations.
- Handling IR56G (Tax Clearance for Departing Employees).
- Complex benefit structures (e.g., housing allowances, offshore income).
Impact: Managing expatriate payroll requires specialist knowledge and coordination with tax advisors, significantly increasing costs.
6. MPF Scheme Management
- Standard vs. Complex:
- Simple: Single MPF provider for all employees.
- Complex: Multiple MPF schemes, voluntary contributions, or hybrid retirement arrangements.
- Cost Impact: The more intricate the MPF management, the higher the administrative burden and service fees.
Payroll Software Costs
In addition, many payroll service providers utilize cloud payroll softwares, but the subscription cost is often not included in the service package. Therefore, below is a table that list out the most common payroll software pricing, to give you a brief idea on the potential additional monthly subscription costs.
| Software | Base Price | Per Employee Fee | Employee Limit | Key Features | Notes |
|---|---|---|---|---|---|
| Talenox | HK$0 (Free Plan) | HK$85/mo For the first 5 employees Subsequently, HK$17/employee Price is capped at HK$3500 | Unlimited | Payroll, leave management, MPF, IR56 filings, bank integrations | Suite plan capped at HK$4,200/month on Monthly Plan and HK$3,500/month on Annual Plan |
| SimplePay | HK$69 (includes first 3 employees) | HK$23 per employee (4–25 employees), HK$17 per employee (26+ employees) | No cap specified | Full payroll automation, IR56 support, MPF, leave tracking | Single plan with all features included |
| Info-Tech | HK$15 per employee per module | HK$15 per employee per module | No cap specified | Payroll, leave, claims, appraisal, attendance, MPF, IR56 | Modular pricing; pay only for required modules |
| Workstem | HK$0 (Basic Plan) | HK$33–HK$71 per employee/month | Minimum charge for 5 employees per subscription | Comprehensive HRMS: payroll, MPF, tax, rostering, attendance, leave, reimbursement, AI-driven automation | Offers a free basic plan; advanced features available in paid plans |
Please note that pricing and features are subject to change. It’s advisable to contact the providers directly or visit their official websites for the most current information.
If you need further assistance in selecting the most suitable payroll software based on your company’s specific needs and size, feel free to ask!
Expert Considerations:
- For companies under 20 staff, outsourcing at a flat rate is more cost-effective than hiring internally.
- Companies with expatriates should factor in higher compliance risks and costs—proper IR56G/F filings and tax clearance services are essential to avoid penalties.
- Avoid low-cost providers that lack robust data security measures; payroll involves sensitive employee data and compliance risk.
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.
