Severance payment calculator

Severance payment = last month's wages × 2/3 × years of service, up to $15,000 a year and $390,000 in total. For wages of $18,000 and 5 years of service, it is $60,000. The employee must have at least 24 months of service and be made redundant.

Enter the details

This calculator covers contracts ended on or after 1 May 2025.

You may use the average monthly wages of the last 12 months instead.

Domestic helpers, employees below 18, and employees who started work at 65 or above are not covered by MPF. Their whole period of service uses one formula.

Result

Please complete the details. The result will appear here.

How it is calculated

  1. The employee must have at least 24 months of service under a continuous contract and be dismissed by reason of redundancy, be laid off, or have a fixed-term contract end without renewal by reason of redundancy. Severance payment and long service payment cannot both be paid.
  2. For monthly-paid employees, the amount for each year = last full month's wages × 2/3, up to $15,000 (2/3 of $22,500). The average wages of the last 12 months may be used instead.
  3. Years of service = whole years from the start date to the end date + remaining days ÷ 365. The Labour Department states that an incomplete year is calculated pro rata; dividing the days by 365 is the method used by this calculator.
  4. MPF offsetting was abolished from 1 May 2025 (the transition date). For an employee covered by MPF who started before this date, the payment has two portions: wages before the transition date × years before it, and wages before the end of the contract × years from the transition date.
  5. The two portions together must not exceed $390,000. Any excess is deducted from the post-transition portion. If the service does not straddle the transition date, or the employee is not covered by MPF (such as a domestic helper), one formula is used for the whole period.
  6. Benefits from the employer's MPF mandatory contributions can offset only the pre-transition portion, not the post-transition portion.
  7. All calculations are done in your browser. The details you enter are not sent to any server.

Worked examples

Joined on 1 May 2025, 5 years of service, monthly wages of $18,000

Details
1 May 2025 – 30 April 2030
Result
Total HK$60,000; can be offset HK$0

Joined on 1 May 2022, 8 years of service, $15,000 before the transition date and $18,000 at the end

Details
1 May 2022 – 30 April 2030
Result
Total HK$90,000; can be offset HK$30,000

10 years of service, monthly wages of $40,000 ($15,000 a year cap)

Details
1 May 2025 – 30 April 2035
Result
Total HK$150,000; can be offset HK$0

26 years before and 1 year after the transition date, $30,000 a month ($390,000 cap)

Details
1 May 1999 – 30 April 2026
Result
Total HK$390,000; can be offset HK$0

Domestic helper, 6 years of service, $5,100 a month (not covered by MPF)

Details
1 March 2020 – 28 February 2026
Result
Total HK$20,400; can be offset HK$0

Official sources

Applies to: Employment contracts terminated on or after 1 May 2025 (after the abolition of MPF offsetting).

  1. Labour Department: A Concise Guide to the Employment Ordinance, Chapter 11: Severance Payment and Long Service Payment
  2. Labour Department: A Concise Guide to the Employment Ordinance, Appendix 2: Abolition of the MPF offsetting arrangement

Last reviewed on 27 October 2026.

The rules on this page have been checked against the official sources listed above. The result is for reference. The rules and assessment of the concerned authority shall prevail.