Hong Kong is a revered global business hub. It is the gateway to Mainland China, and boasts of highly developed infrastructure and a low & straightforward tax regime. Therefore, it is no surprise that so many companies are drawn to this fast-growing economy.
To run a company in Hong Kong requires having the right staff, which means you have to recruit locally, and where necessary, bring on board experts from abroad.
When recruiting the local talents and managing human resources, you need to strictly adhere to the complex payroll and labor regulations, which are captured in the Hong Kong Employment Ordinance. It is not uncommon to find foreigners coming to Hong Kong getting overwhelmed with payroll management because there is so much to be done. For example, you have to correctly calculate the wages of employees and make the right statutory deductions.
We must say that you cannot afford to get it wrong because the penalties are very severe and could even risk your license. The best way to get the process right is to outsource payroll Hong Kong from top providers, like Primasia. So, here is what to expect from Primasia professionals.
What is Payroll Outsourcing?
Payroll remains an important part of running a company in Hong Kong, motivating staff, and retaining the best talents for a long time. With an effective payroll structure and management, you do not just pay the employees but also manage their taxes in like with the Employment Law.
When you outsource payroll in Hong Kong from Primasia, our experts come in to help you with payment for staff and related activities. Primasia can focus on handling a single component or the entire payroll for the company. As we are going to see shortly, outsourcing payroll helps your company to enjoy the services of experts and have the confidence that everything is being handled correctly.
For most companies operating in Hong Kong and neighboring jurisdictions, Payroll management is a tough job, but how do you know it is time to seek assistance? Here are some of the indicators that show you need to outsource payroll in Hong Kong from Primasia.
- When the process of payroll management starts taking a lot of your precious time.
- Your company does not have the expertise to process payroll.
- You are looking for an excellent way to cut down costs associated with payroll management.
Employment Legislation, Tax and Withholding Regulations in Hong Kong
The Employment Ordinance of Hong Kong is the principal legislation that guides the employment for all companies in the island. It is particularly important because it defines the employment conditions, wage payment deductions, and termination.
Apart from the wages, your company also needs to make all statutory tax deductions from the employees’ wages. The most notable is the Mandatory Provident Fund (MPF), where employees must be enrolled after 60 days of employment. This deduction is usually 5% but also depends on the length of payment.
In Hong Kong, the personal income tax ranges between 2% and 7% based on the level of income. However, your company is not obligated to deduct this tax. Instead, the employee is required to make the payment.
Other aspects of payroll management legislation that your company must factor in include:
- Employees have to be paid once every month in line with minimum wage requirements in Hong Kong.
- Workers have to be granted rest at least one day every seven-day.
- When an employee is transferred, the contract for employment is not transferred automatically.
- You have to strictly observe data-protection rules when processing payroll for your company.
At Primasia, we have experts who are ready to help your company process all or parts of the payroll system. Even if your company is scaling, probably opening a new WFOE in China or a branch office in Singapore, Primasia will be there to help with compliance.
Outsource Payroll Hong Kong
The most notable benefit of outsourcing payroll in Hong Kong from Primasia is that it helps to release staff as the experts handle the complex task. This means that your team can concentrate on other tasks that help to increase revenue generation, strengthen the brand’s position in the market, and grow revenue. Other benefits to expect when you outsource payroll services include:
Outsourcing Payroll Services can Help Reduce the Cost of Operations
If you prefer to use an in-house team for your payroll management, the cost can be so high, and we are going to tell you why. First, you need to hire experts who are conversant with payroll management, and they do not come cheap. Second, you need to meet the monthly wages, plus all the bonuses and mandatory deductions for the employees. As if this is not enough, you have to acquire the right tools for payroll management and foresee its updates and security. All of these take a lot of money, but you can avoid it by working with an agency of experts.
Prmasia only requires you to pay the agreed contractual amount for the service. The agency comes with experts, software and meets all the associated costs. Even if the experts work over the weekend or even overnight to meet your targets, no bonus will be required because the agency will have handled that already.
Why pay more when you can get better services with less?
Outsourcing Payroll Services in Hong Kong can Help to Save Time
We must say that processing payroll services can be a herculean job. The entire process of calculating staff wages and making deductions can take a lot of time. If you do not have the right skills in your HR department, it can be pretty challenging and take days or even weeks. However, experts are specialized in this kind of task and will get the job done fast.
If, for some reason, you are getting late with the payroll, do not risk making the wrong calculation or being late with salaries or statutory deductions. These actions can attract huge penalties, according to the Employment Ordinance. Instead, you should let experts handle the task because they can complete it fast and on time. Primasia professionals use advanced software that allows them to calculate wages and complete the payroll processing in record time.
Improved Security for Your Data
One of the major concerns for companies operating in Hong Kong and neighboring markets is the security of their data. Often, working with an in-house team can sound like a safe bet, but entrusting one of several employees can be pretty risky. What would happen if the staff is involved in fraud?
Cases of embezzlement, fraud, and identity theft are the most common with in-house teams. Instead of risking data security, which also comes with the risk of penalties, go for expert solutions. When drawing a contract for payroll outsourcing, it always includes data security. Experts in payroll management at Primasia use state-of-the-art security tools that help to protect data being processed.
Again, the information is stored in different locations to ensure it is safe and avoid the havoc that can be caused by ransomware attacks. Because Primasia works as a team of professionals, you do not have to worry about the payment officer being away and grounding the process to a halt. Your payroll processing will always work as agreed, completing the task fast and accurately.
Guaranteed Compliance with All Employment Laws
One thing about Hong Kong is that its administration is always looking for new ways of enhancing the workplace, supporting businesses and growing the economy. To achieve all of these, the administration often updates existing policies, and it is not uncommon to find new requirements for payroll management. This can be pretty challenging for in-house teams, but not experts.
Primasia’s professionals are always on top of things, updating their operating design based on the latest laws. Therefore, whether a new policy has just come into effect or the existing laws look so complex, you do not have to worry about it when working with professionals.
The benefits we have listed above are only a few of what you should anticipate. When you outsource payroll in Hong Kong from Primasia, the experts will also be there to help you improve your HR strategy and training staff. You can also count on us for accounting, company incorporation, carrying out due diligence, and filing tax returns.
Let an expert hold your hand to achieve the success you have always wanted in your Hong Kong company.