Employers are also required to prepare tax forms for all employees and report their wages under the Income Tax Ordinance [link to Income Tax Ordinance]. A back log of payroll records must be kept for at least seven years.
Tax clearance is required for employees living in Hong Kong for a period of a month or more. Employers must notify Hong Kong Inland Revenue Department if an employee is expected to leave Hong Kong with at least one month’s notice. This is intended to ensure that departing employees leave Hong Kong in good standing and have paid all taxes. Employers must withhold wages from the employee once notice of leaving Hong Kong has been given until Hong Kong IRD does a tax assessment and confirms all taxes have been paid by issuing a letter of release. Please take note that this applies only to employees who intend to live abroad or quit their Hong Kong position. Employees who travel frequently for work need not be declared.