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Severance Payments and Long Service Payments. Sums paid to you as severance payments or long service payments strictly in accordance with the provisions of the Employment Ordinance (EO) are not assessable to salaries tax. The amount not assessable to salaries tax should be computed after deduction of :
Eligibility for Severance Payment / Long Service Payment. An employee is eligible for severance payment or long service payment subject to the following conditions: Entitlement. Severance Payment. Long Service Payment. Qualifying period of employment.
An employee employed under a continuous contract for not less than 24 months is eligible for severance payment if: ( 1 ) he is dismissed by reason of redundancy*; ( 2 ) his fixed term employment contract expires without being renewed due to redundancy*; or. ( 3 ) is laid off.
Severance payment on redundancy is the means whereby an employee is compensated for loss of employment through no fault of his own while payment in lieu of notice is an income from employment. Since the natures are different, the tax treatments are also different.
Apr 29, 2021 · An employee is entitled to a severance payment if he has been employed continuously for at least two years but is dismissed due to redundancy if (1) the employer closes or intends to close the business, (2) the employer has ceased, or intends to cease, the business in the place where the employee was employed, or (3) the business requirement for...
Nov 22, 2023 · Severance payments may raise taxation issues under the Hong Kong salaries tax law. Learn how to stay compliant and avoid tax liabilities.
You may file Form IR56F electronically using GovHK (www.gov.hk/etax), download Form IR56F at www.ird.gov.hk or obtain it from the 'Fax-A-Form' Service at 2598 6001 (select the language and press keys (3)(2)(3)).)
