Completing five years of service does not automatically create a long service payment. The decisive issue is usually how employment ends.
Ordinary resignation for a new job, study, migration or personal preference normally does not qualify by itself. Possible qualifying circumstances include dismissal other than summary dismissal for serious misconduct, non-renewal of a fixed-term contract, death in service, resignation at age 65 or above, and resignation supported by the required medical certification of permanent unfitness for the current work.
Example: retiring early at 61 after 29 years
If the employee voluntarily retires at 61, 29 years of service does not by itself create a statutory long service payment. The statutory old-age resignation route requires the employee to be at least 65. An employer's normal retirement age of 65 does not turn a voluntary departure at 61 into that statutory ground.
Identify who initiated the termination and what the documents say. Dismissal or non-renewal may lead to long service payment if the other conditions are met; redundancy is normally considered under severance payment; resignation because of permanent unfitness requires the prescribed medical certification. A contractual early-retirement benefit or ex-gratia payment is separate from statutory long service payment. See the guide to Hong Kong retirement age and MPF rules for the separate age tests.
What may still be due after ordinary resignation?
Ordinary resignation is not an automatic compensation event, but the employee should still reconcile outstanding wages, untaken annual-leave pay and any qualifying pro-rata annual-leave pay, earned contractual commission or allowances, and any retirement or departure benefit promised by the contract. If the employee gives the required notice, the employer does not normally owe payment in lieu of notice; if the employee gives insufficient notice, the employee may instead owe it. Severance and long service payment require their own statutory grounds.
Check eligibility before calculating
A monthly paid employee's statutory formula is generally two-thirds of the last month's wages for each reckonable year of service, subject to statutory wage and total-payment caps. A proportionate amount can apply to an incomplete year. Where the law permits, the employee may elect to use average wages over the relevant 12-month period.
Commission, allowances, unpaid leave and irregular pay can change the wage basis. Use the Severance and Long Service Payment Calculator for an estimate and the Average Daily Wage Calculator to organise variable earnings, but confirm eligibility separately.
Severance and long service payment are different routes
Redundancy may lead to severance payment, while other qualifying termination reasons may lead to long service payment. They are not both payable for the same period of service.
The MPF offset change has a transition date
1 May 2025 is the transition date. For an employee hired before that date, the calculation may need to separate pre-transition and post-transition service. Employer mandatory MPF benefits cannot offset the post-transition portion, while the pre-transition portion and employer voluntary contributions follow separate rules.
Check the Labour Department's abolition of MPF offset portal and its Concise Guide to severance and long service payment.
Frequently asked questions
### The company retirement age is 65. Is long service payment due if I retire at 61 after 29 years?
If the employee voluntarily retires at 61, 29 years of service does not by itself create a statutory long service payment. The statutory old-age resignation route requires age 65 or above. Dismissal, non-renewal, redundancy or medically certified permanent unfitness must be assessed under their respective routes.
### Does completing five years automatically qualify an employee?
No. Five years is normally only the service threshold. Employment must also end for a statutory qualifying reason; ordinary voluntary resignation does not become eligible merely because service exceeds five years.
### What is normally payable when an employee resigns?
Check outstanding wages, untaken and qualifying pro-rata annual-leave pay, earned contractual commission or allowances, and other benefits promised by the contract. Insufficient notice can make the employee liable for payment in lieu; long service payment and severance are not automatic on ordinary resignation.
Before leaving, keep the employment contract, 12 months of pay records, termination documents, MPF records and details of final payments. This article was last checked on 24 August 2026.