Employers Must Know! What is the minimum hourly/monthly wage? Who is covered by the Minimum Wage Ordinance? This article tells you all about it!
The Minimum Wage Ordinance requires employers to keep records of the total number of hours worked by employees in a wage period, so how should minimum wage be calculated? In this article, you will learn about the statutory minimum wage (SMW) requirements and frequently asked questions.
2025 Latest Minimum Wage in Hong Kong
The minimum wage in 2025 is HK$42.1 per hour and the monthly monetary cap for employers to record the total number of hours worked by an employee is raised to HK$17,200.
Minimum Wage Ordinance
In Hong Kong, the Minimum Wage Ordinance ("MWO") was enacted by legislation in July 2010 and came into effect on 1 May 2011. Minimum wage is expressed on an hourly basis and stipulates that the average wages of an employee in respect of the total number of hours worked by him/her in the course of his/her employment must not be less than the SMW rate.
List of changes in hourly minimum wage over the years
| Date of implementation | Minimum Hourly Wage |
|---|---|
| May 2011 | HK$28 |
| May 2013 | HK$30 |
| May 2015 | HK$32.5 |
| May 2023 | HK$40 |
| May 2025 | HK$42.1 |
The initial SMW hourly rate was HK$28. The minimum wage has been adjusted four times. 2025 saw the minimum wage increased to HK$42.1, representing an increase of 5.25% over the previous year.
The Role of Minimum Wages
Minimum Wage Commission
The Minimum Wage Commission (MWC) is tasked to study how to determine the level of minimum wage in Hong Kong and set up a review mechanism, and make recommendations to the Chief Executive in Council.
The MWC, comprising representatives of the Government, employers and employees, will make reference to economic development, employment market data and inflation level to ensure that the wage level strikes a proper balance with the actual social environment.
Protection of grassroots employees
The biggest objective of minimum wage is to prevent excessively low wages and reduce the loss of low-paid jobs. Therefore, a wage floor is set to protect grass-roots employees from falling into poverty due to excessively low income.
At the same time, it also upholds and enhances the dignity of labour in the community, so that employees can receive basic protection for their labour and reduce the incidence of "working poverty".
Who is covered by the minimum wage?
Persons covered by the minimum wage
Whether full-time, part-time or temporary workers, as long as they are employed by a company or an individual employer and remunerated by wages, they are entitled to protection under the Minimum Wage Ordinance (MWO).
Commonly applicable workers include waiters and waitresses in the catering industry, salespersons in the retail industry, security guards, cleaners, warehousemen and other elementary jobs. As these types of jobs often have long working hours and low wages, the minimum wage system is particularly important to them.
Persons not covered by minimum wage
SMW does not apply to the following persons:
- Persons to whom the Employment Ordinance does not apply
- Domestic Helper
- Interns and work experience trainees specified in the Minimum Wage Ordinance
- Convicted or self-employed persons (Freelancer)
Calculation of minimum wage
Example of calculation of monthly salary
The monthly minimum wage is calculated as follows:
Total number of hours worked x SMW rate = minimum wage rate for that month
Here is a concrete example to illustrate: Assuming that the total number of hours worked by Employee A in this month is 172, then the minimum wage for this month is:
172 (total number of hours worked) x 42.1 (SMW rate) = HK$7241.2
Minimum Wage Calculator
If you find it too troublesome to calculate the minimum wage individually, the Labour Department in Hong Kong also provides the "Minimum Wage" system.Minimum Wage Reference Calculator", apart from setting out the current SMW rate, the website will also include breakdowns of the calculation, such as meal break pay,Paid sick leaveThe Administration's proposal to introduce a new section on pay and conditions of service, rest day/non-working day pay, etc. will enable employers to calculate pay according to different circumstances.
Frequently Asked Questions
What are the penalties for employers who fail to meet the target?
According to the Minimum Wage Ordinance, if an employer fails to comply with the regulations, apart from paying back the wages in arrears, he may also face a maximum penalty of HK$350,000 and imprisonment for three years. Therefore, employers must exercise caution to ensure that the calculation of wages is in compliance with the requirements.
Will employees with disabilities, trainees and domestic helpers be affected?
The above mentioned domestic helpers are not covered by the minimum wage because this category is covered by the Minimum Wage Ordinance (MWO).Minimum wage for foreign domestic helpersThe "C" is the same as the "C", and includes meals and accommodation arrangements. The other two provisions are:
Employees with disabilities: If an employee's ability to work is affected by his/her disability, he/she may apply for a "wage assessment", the result of which may be lower than the minimum wage level, provided that it is mutually agreed and recognised by the assessment.
Internships: Some recognised internships or apprenticeships, with remuneration determined by mutual agreement.
Detailed requirements can be found in the Guidelines issued by the Labour Department.Minimum Wage Legislation。
What is the difference between minimum wage vs living wage?
... Minimum Wage: Legislated by the Government with mandatory effect, mainly to ensure that employees' wages are not lower than the minimum level.
A living wage: advocated by social organisations or academic institutions. Living Wage: advocated by social organisations or academic institutions, not legally binding, but reflecting the actual needs of life.
To put it simply, minimum wage is legally binding and employers are required to comply with the SMW regime; however, living wage is not, so employers are not obliged to pay it to their employees.
Can employers offset the amount of minimum wage with meal allowance?
No! Employers may not offset the minimum wage payable by providing meals, accommodation or consideration and all wages must be paid in money.
How often is the minimum wage adjusted?
The minimum wage in Hong Kong is currently subject to an annual review mechanism to cope with socio-economic changes.
When is an employer required to record the total number of hours worked by an employee?
When an employee's monthly wages are less than HK$$17,200, the employer must keep records of the total number of hours worked in that wage period.
Not sure about the Minimum Wage Ordinance? Langfeng Business Consultancy provides professional advice
The Minimum Wage Ordinance (MWO) involves different groups of employees, wage calculation methods and legal liabilities. Employers may face back pay or even penalties if they are negligent. If you still have questions about the MWO, please consult Longford Business Consultants. We are very familiar with Hong Kong's labour laws and regulations, and can assist employers to properly handle their staff's remuneration system to avoid legal risks.
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