Running payroll in the Hong Kong construction industry isn’t simple. Between managing subcontractors, processing daily-rated workers, staying compliant with Labour Department rules, and calculating MPF contributions — it’s a lot to handle.
Whether you’re a main contractor, subcontractor, or HR manager in the building sector, this guide breaks down the key challenges, rules, and solutions for handling construction payroll in Hong Kong.
Payroll in the construction industry isn’t like any other. With fluctuating job sites, union regulations, prevailing wage requirements, and complex job costing, managing payroll for construction companies requires a tailored approach.
Whether you’re a contractor, HR manager, or business owner, understanding how to set up and manage construction payroll efficiently can save you thousands in compliance penalties and hours in manual processing.
In this guide, we’ll break down everything you need to know about construction payroll.
Content Outline
What Makes Construction Payroll in Hong Kong Unique?
Construction in Hong Kong operates on a unique structure that differs from most industries. Here’s what sets it apart:
- Daily Wages & Attendance-Based Pay: Most construction workers are paid by the day, not by monthly salary.
- Multiple Job Sites & Attendance Systems: Employees move across job sites, requiring centralized records via biometric or digital check-in systems.
- Frequent Use of Subcontractors: Payroll often includes both directly employed workers and external labor sourced through subcontractors.
- MPF Compliance: All eligible employees, including casual workers, must be enrolled in an MPF scheme and receive timely contributions.
- Cross-Border Workers: Many companies employ workers from mainland China or South/Southeast Asia, adding visa and document tracking to payroll tasks.
- Public Works & Labour Department Reporting: Government projects come with strict reporting rules, including e-submission of wages and site safety records.
Key Payroll Challenges for Construction Companies in Hong Kong
1. Tracking Daily Pay & Overtime
Most construction workers are paid daily or weekly based on actual attendance. This means:
- You need real-time attendance records (manual slips don’t cut it anymore).
- Overtime, night shifts, and public holiday pay must be calculated accurately.
- Inconsistent attendance can make monthly payroll reports time-consuming to prepare.
2. Managing Subcontractor Payroll
Subcontractors often supply their own workers but still require main contractors to:
- Verify headcounts and hours worked
- Ensure MPF and tax obligations are met
- Handle disputes related to underpayment or late salaries
3. Handling MPF for Construction Workers
Construction companies must:
- Enroll full-time and part-time workers (even temporary staff) in an MPF scheme
- Make contributions by the 10th day of each month
- Keep MPF records for at least 7 years
- Use Industry Schemes like Fidelity MPF Industry Scheme or Manulife MPF Industry Scheme (especially for casual workers)
Failing to contribute MPF properly can result in penalties of HK$350,000+ and even imprisonment.
4. Complying with Hong Kong Labour Law
You’re required to:
- Provide itemised pay slips showing basic pay, overtime, deductions, and MPF
- Pay wages within 7 days after the end of each wage period
- Comply with the Minimum Wage Ordinance (HK$40/hour as of 2025)
- Maintain employment records for at least 12 months
5. Cross-Border Labour Management
- For mainland Chinese or Southeast Asian workers, you must track visa validity, work permits, and site-specific access
- Employers may need to coordinate with CIC, Immigration Department, and Labour Department
Best Payroll Solutions for the Hong Kong Construction Industry
Should You Use Payroll Software?
✅ Yes — but only if it supports:
- Daily rate calculations
- Site-based attendance syncing
- MPF auto-submission
- Cantonese/English payslip support
- Local tax compliance (IRD Forms: IR56B, IR56M, etc.)
- Subcontractor tracking
Recommended Payroll Systems:
- Kingdee Construction Payroll – HK-compliant, cloud-based, with MPF and IRD integration
- JustLogin HK – Strong compliance tools with jobsite-based tracking
- QuickHR – Local provider with biometric integration and construction-specific tools
- Workstem – App-based attendance, MPF automation, and job site costing
- Outsourced Payroll Providers – For SMEs, outsourcing to providers like FastLane saves time
Sample Payroll Workflow for a Hong Kong Contractor
Here’s a typical monthly flow:
| Step | Task |
|---|---|
| 1 | Collect attendance from all job sites (via app or check-in system) |
| 2 | Calculate daily wages + overtime + allowances |
| 3 | Deduct MPF and taxes |
| 4 | Generate payslips in bilingual format |
| 5 | Pay via FPS or bank transfer within 7 days |
| 6 | Submit MPF and IRD records |
| 7 | Store all records digitally (min. 7 years) |
How to Stay Compliant
To avoid penalties, make sure you:
- Use a Construction Site Attendance System (e.g., CIC’s Smart Site Safety System)
- Automate your MPF contributions monthly
- File IR56 forms annually for all employees and subcontractors
- Keep both digital and hard-copy records
- Clearly distinguish between employees and self-employed subcontractors (misclassification = heavy fines!)
Conclusion
Payroll in Hong Kong’s construction industry is complex — with multi-layered compliance, varying pay structures, and demanding government oversight.
But with the right system or partner in place, you can:
✅ Pay workers on time
✅ Stay compliant with MPF, IRD, and Labour Department rules
✅ Reduce disputes from unclear wages
✅ Save hours of manual admin work each week