Keeping payroll records (Tax)
Tax Obligation – Employer (HK)
On hiring the employee, you have to maintain a record of that person’s :
(a) personal particulars(name, address, identity card or passport number with place of issue, marital status)
(b) nature of employment (full time or part-time)
(c) capacity in which employed (e.g. sales manager, salesman, worker, in-house lawyer, accountant, director)
(d) amount of cash remuneration (regardless of denomination in domestic or foreign currency and remuneration paid outside Hong Kong)
(e) non-cash and fringe benefits (such as quarters, holiday journey benefits, share award, share option)
(f) employer’s and employee’s contributions to the Mandatory Provident Fund (MPF) or its equivalent
(g) employment contract and amendments to terms of employment
(h) period of employment
You have to inform the Inland Revenue Department (“IRD”) the following:
(i) any change in the employee’s personal particulars (such as change in residential and postal address, change in marital status)
(j) any change in the employee’s terms of employment (such as a change from full time to part-time)
(k) the Hong Kong Identity Card No. of the employee
The Hong Kong Identity Card No. of the employee
If at the time when you complete your Employer’s Return, an employee does not possess a Hong Kong Identity Card, e.g. the employee was recruited from overseas or seconded from an overseas corporation, you can fill in his/her passport number with place of issue. After filing the Employer’s Return, you have to follow up with the employee. You should, soonest possible, write in to inform the IRD when the Hong Kong Identity Card No. of the employee is known.
Reporting remuneration paid to an employee
New employment
You have to file one copy of IR56E (Download) within 3 months of employing a person if you anticipate that the employee is likely to be chargeable to Salaries Tax.
Employee Termination (or death)
You have to file one copy of IR56F (Download) one month before the date of termination of his employment.
Employee leaving Hong Kong for good or for a substantial period of time
- You have to ascertain from the employee his expected date of departure.
- You have to file two copies of IR56G (Download) one month before the expected date of departure.
- From the date of filing IR56G (Download) and until such time the employee has made tax clearance and can produce to you a ” letter of release” issued by the IRD, you should withhold all amounts due to be paid to him (including salaries, commission, bonus, reimbursement of rent/expense, money or money’s worth included).
Continuous Employment
When you received an Employer’s Return (BIR56A), you must complete it and lodge with IRD within 1 month even if
- you do not hire any employee (a Nil return should be made),
- the business has not commenced, or
- the business has ceased.
Normally, we will send BIR56A and IR56B (Download) (Employer’s Return) to employers on the first working day of April each year.
If you do not receive BIR56A and IR56B (Download) forms by mid April, or the original forms have been lost / damaged, or you need more IR56B forms or other forms, you can contact the IRD for these forms. You may lodge your request by completing the IR6163 (Download) and send it to the IRD by mail or by fax.
Impotant: You have to maintain payroll records of your employees and keep these records for at least 7 years
Sources: IRD (on Oct 2018)