Yes. Within 3 months of employing a person, you will need to fill in the IR56E form to inform the Inland Revenue Department, if you anticipate that the employee is likely to be chargeable to Salaries Tax. You should also submit the report remuneration paid to the employee by submitting either IR56B or IR56M.
Hiring a new employee
On hiring the employee, you have an obligation 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
(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
The IR56E form should be completed within 3 months from the date of commencement of employment, and sent to the Inland Revenue Department. A failure to do so may result in a fine of $10,000.
Report remuneration
Employers would be required to complete the IR56B form (namely Employer’s Return of Remuneration & Pensions) for each of their employees. You would need to fill in their personal details and salary details in the form to report their remuneration to the Government within 1 month of receiving notification to do so.
Most income items are taxable in Hong Kong, except for some compensation items exempted by the Inland Revenue Ordinance, and for Severance Payment, Long Service Payment and Jury Fees.
Independent contractor
If your worker is not an employee, but a consultant, agent, broker, freelance artist, entertainer, sportsman or writer etc., and you pay the worker remuneration exceeding $25,000 per annum, you should file the form IR56M instead.
Key takeaways
- Employers are required to fill in IR56B and IR56E to the Inland Revenue Department when hiring a new employee.
- Employers may be required to fill in IR56M if payment to an independent contractor exceeds $25,000 per annum.
