Hong Kong Severance Payment & Long Service Payment Calculator (Post-MPF Abolition)

Who this is for

Employees in Hong Kong leaving a job after at least two years (severance payment) or five years (long service payment), and employers working out the amount after the end of MPF offsetting.

Only one of the two payments is paid for the same period of employment.

What to have ready

• Your employment start date and termination date.
• Your last full month's wages and, if relevant, your wages for April 2025.
• The reason for termination given by the employer.
• Your MPF account statement.

The rule

Under Part VA of the Employment Ordinance (Cap. 57), an employee with at least 24 months' continuous employment who is dismissed because of redundancy is entitled to a severance payment. Under Part VB, an employee with at least five years' service is entitled to a long service payment if dismissed for reasons other than serious misconduct or redundancy, and in some other cases such as retirement at 65 or ill health. Both use the same formula: for a monthly-rated employee, two-thirds of the last full month's wages, capped at two-thirds of HK$22,500 (HK$15,000), for each year of service, with a total cap of HK$390,000.

From 1 May 2025 (the 'transition date'), an employer can no longer use the accrued benefits from its mandatory MPF contributions to offset severance or long service payments for service after that date. Service before the transition date can still be offset, and that part is calculated using the wages for the month before the transition date. A government subsidy scheme helps employers for a limited period.

Read the official text:

• Employment Ordinance, Cap. 57 (Hong Kong e-Legislation)
• Labour Department: abolition of the MPF offsetting arrangement
• Labour Department: Concise Guide to the Employment Ordinance

Worked example: five years, HK$28,000 a month

Wage used     = min(HK$28,000, HK$22,500) = HK$22,500
Per year      = HK$22,500 x 2/3 = HK$15,000
Severance     = HK$15,000 x 5 = HK$75,000 (below the HK$390,000 cap)
Offset        = only the pre-1 May 2025 portion can be offset by MPF
Incomplete years are paid pro rata

Common mistakes

• Using the full monthly wage. The formula caps the wage at HK$22,500.
• Claiming both payments for the same period. You get one or the other.
• Applying MPF offsetting to all years. Post-transition service cannot be offset.
• Missing the claim window: a severance claim should be made in writing within three months of termination.

Limits of this tool

• The rules are detailed, especially for the split before and after the transition date; check the Labour Department's calculators.
• Daily-rated and piece-rated employees use 18 days' wages per year instead of two-thirds of a monthly wage.
• Contracts may offer more than the statutory minimum.

Sources were last checked in October 2026. Statutes are amended often; if the official text differs from this page, the official text controls.