Everyone has an obligation to file tax returns and employers in Hong Kong are no exception. In fact, if you’ve been operating your company in Hong Kong and have a number of employees under your wings, you must be familiar with the employer’s return. All about employer’s return HK Company just below.

This is a very important document that every single employer in Hong Kong is required to file with the Inland Revenue department annually. It is essentially a summary of tax withheld during the year as well as the summary of employees’ salaries and benefits. The employer’s return is basically used to calculate your company’s payroll tax liability.

Granted, filing an employer’s return is not exactly a walk in the park especially if you’ve just set up shop in Hong Kong or are simply unfamiliar with the laws and regulations that govern the Hong Kong tax system.

If you are in such a position and don’t know anything about employer’s return HK company, you’ve come to the right place. We shall be enlightening you on everything you need to know regarding the employer’s return in HK for your company including but not limited to the documents or forms required, deadlines that need to be met, as well as the fines and penalties in cases of non-compliance with filing of the employer’s return.

What Exactly Is Employer’s Return?

As stated earlier, an employer’s return refers to a mandatory document that all employers in Hong Kong must file with the Inland Revenue Department (IRD) every year. Employer’s return provides a summary of.

  •         Employees’ salaries
  •         Employees benefits
  •         Tax withheld throughout the year

In simple terms, the employer’s return is used to calculate your company’s payroll tax liability. When we talk about payroll tax liability, we are essentially referring to the total amount of salaries and other benefits paid to your employees less any allowable deductions. It is usually calculated based on your company’s net chargeable income.

Who Is Required To File the Employer’s Return?

Well, so long as you are an employer based in Hong Kong, with or without employees, filing the employer’s return is mandatory.

You need to file the employer’s return irrespective of whether you are a sole proprietor, in a partnership, or own a number of companies in Hong Kong.

When Is the Deadline for Filing the Employer’s Return?

Employers in Hong Kong are required by law to file the employer’s return for their HK Company by April 30th of every year following the relevant year of assessment. What exactly do we mean by this?

For instance, if the financial year of the company ends on December 31st of 2022, you are required to file the employer’s return for the year 2022/2023 by April 30th of 2023.

There are no extensions when it comes to the deadline for filing the employer’s return. You are strictly required to have filed the return by the set date. Failure to do so or late submissions will attract hefty fines and penalties.

What Information Is Needed to Prepare Your Employer’s Return?

In order to file the employer’s return HK Company, you will need the following information.

  •         Personal information of your employees. Here we are referring to the name, date of birth, as well as the employees’ Hong Kong identity card number.
  •         Employee’s salary information. Here we are referring to their gross salary, their taxable income, as well as the tax withheld.
  •         Employees’ benefits. Here we are referring to bonuses, allowances, and other fringe benefits.
  •         Information regarding your company’s contribution to the mandatory provident fund (MPF) for every single employee under your payroll.
  •         Information regarding any given employee who left your company during the year.

Ways in Which You Can File the Employer’s Return HK Company

There are a number of ways in which you can file your employer’s return. These are.

  •       E-filing: This is not only the easiest but also the most convenient to file your employer’s return. You simply need an internet connection, and to log into the Inland Revenue Department (IRD) tax system to file your return.
  •         Paper filing: If you are the kind of person that likes to do things the old-school way, then paper filing will work just fine for you. All you need to do is download a form from the Inland Revenue Department (IRD) website, fill it out, and mail it to them.
  •         Enlist the services of a tax representative: You don’t have to file electronically or fill out a form. After all, filing the employer’s return can be a complicated and time-consuming process. In such a case, you are better off enlisting the services of a professional accountant or tax agent such as Primasia to file the employer’s return on your behalf.

What Are The Penalties For Non-Compliance Or Late Submission?

Of course, there are repercussions for non-compliance or late submission of the employer’s return. If you submit the employer’s return past the stipulated date by law, you will be penalized HK$ 1,000 and an additional penalty of 5% of the payroll tax due up to a maximum amount of HK$ 10,000.

In a situation whereby you fail to file the return for a period exceeding 1 year, you will be liable to pay a penalty of up to HK$ 10,000 and an additional penalty of 10% of the payroll tax due up to a maximum amount of HK$ 100,000.

Penalties and fines aside, non-compliance can also lead to prosecution. It is therefore important that you comply to be on the safe side of the law.

In conclusion, filing the employer’s return is a crucial part of managing a Hong Kong company tax obligation.

As an employer in Hong Kong, it is important to accurately report the income earned by employees and any salaries paid during the year and submit the relevant forms to the Inland Revenue Department (IRD) in a timely manner.

The employer’s return form requires detailed information on the company’s employment situation, including the number of employees, salaries paid for the year, and other relevant information. 

Companies have the option to work with professional tax filing services to ensure that all necessary forms are submitted correctly, and on time, and that they are up to date with any changes to the Hong Kong tax regulations.

Submitting an accurate and complete employer’s return is an important part of the tax filing process and companies should take the time to ensure that all relevant information is included and submitted according to the IRD’S guidelines. 

While filing the employer’s return HK Company can be a daunting process, with the right information and preparation, it shouldn’t be much of a hassle.

You need to start early and don’t wait till the last minute, maintain accurate and up-to-date records, consult a tax professional such as Primasia if you are unsure of any aspect of filing the employer’s return, use e-filling as it’s not only easy but also a convenient way of filling your returns and finally, double check all the information you’ve provided to ensure everything is correct.

Last but not least, please remember that compliance with the employer’s return requirements is essential in ensuring the smooth running of your business in Hong Kong. If you have any troubles or simply want to focus on other important areas of your business, we at Primasia are always at your beck and call to ensure that we handle that important aspect of the employer’s return!