In Hong Kong, employees are entitled to statutory annual leave under the Employment Ordinance (Cap. 57). The minimum entitlement starts at 7 days for the first year of service and increases by one day for each additional year of service, up to a maximum of 14 days. Many employers offer more generous entitlements through individual contracts.

Statutory entitlement

7 days of statutory annual leave for the first year of service, increasing by one day per year of service up to 14 days. Paid at the employee's average daily wages.

Eligibility

Employees must have worked for the employer for at least 12 months to be entitled to paid statutory annual leave. For the first 12 months, employees accrue leave but cannot take it until the completion of the 12-month period.

Employer obligations

  • Grant statutory annual leave as per the minimum entitlement (7–14 days based on service).
  • Pay the employee's average daily wages during annual leave.
  • Pay leave payment in lieu of untaken statutory annual leave on termination of employment.
  • Not require the employee to forfeit statutory annual leave.
  • Allow the employee to take annual leave within 12 months after the end of the leave year.

Employee rights

  • Right to 7–14 days of statutory annual leave based on length of service.
  • Right to be paid at average daily wages during annual leave.
  • Right to leave payment in lieu of untaken leave on termination.
  • Right to take annual leave within the specified period.

Common pitfalls

  • Confusing statutory annual leave with contractual annual leave — employers may offer more generous leave, but the statutory minimum must be met.
  • Not paying leave payment in lieu on termination — this is a statutory requirement for untaken statutory annual leave.
  • Forgetting that leave increases with service — the entitlement increases by one day per year up to 14 days.

How annual leave accrues

Statutory annual leave accrues on a yearly basis. After completing 12 months of employment, the employee is entitled to 7 days of leave. For each additional year of service, one day is added, up to a maximum of 14 days.

Annual leave pay

Annual leave pay is calculated as the employee's average daily wages over the 12 months preceding the leave. This includes all wages, allowances, and commissions, but excludes discretionary payments.

Leave year

The leave year is determined by the employer. It can be a calendar year, a financial year, or a 12-month period from the employee's start date. Employees must take their leave within 12 months after the end of the leave year.

Frequently asked questions

Can statutory annual leave be carried forward?

Yes, untaken statutory annual leave can be carried forward to the next leave year, but it must be taken within 12 months after the end of the leave year in which it accrued.

What happens to unused leave on termination?

Employers must pay leave payment in lieu of untaken statutory annual leave on termination of employment. The payment is calculated at the employee's average daily wages.

Are statutory holidays separate from annual leave?

Yes. Hong Kong has 17 statutory holidays (increasing to 17 by 2030). These are separate from annual leave and do not count against the annual leave entitlement.

Sources

This page is provided for general guidance and does not constitute legal advice. Always check the cited primary source for current law before making employment decisions.