Long Service Payment Formula | Severance Calculator
Confirm the termination reason and years of service first, then estimate the Employment Ordinance formula. Ordinary resignation before 65 usually does not qualify. For monthly-paid staff it is two-thirds of the last full month's wages times reckonable service; wage-base cap HK$22,500, total cap HK$390,000.
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Long service payment formula
Labour Department monthly-paid method. This page is a planning estimate, not the official calculator. Daily-rated or piece-rated staff use a different 18-day wage basis.
| Item | Rule |
|---|---|
| Monthly-paid formula | (Last full month's wages × 2/3) × reckonable years of service |
| Wage-base cap | Two-thirds of HK$22,500 = HK$15,000 |
| Total cap | HK$390,000 |
| Incomplete year | Counted proportionally. This page estimates years from the calendar days between the entered dates. |
| Alternative wage | An employee may use the 12-month average wage before termination. Enter that figure yourself; the page does not compare both options. |
Resigning yourself before 65
Usually no. Ordinary resignation or changing jobs does not qualify just because the years of service are long. Resignation on the ground of old age generally requires age 65. Before 65, the usual exception is a prescribed medical certificate of permanent unfitness for the current job. Confirm a qualifying reason, then use the formula above.
Employment Information
Offsetting, if it applies, is only against the portion earned before 1 May 2025. Employer voluntary contributions and post-transition service follow different rules.
Estimated payment
Meets the two-year service threshold for this severance-payment reason.
Gross payment
MPF offset deduction
Capped monthly salary
Cap reached
Years of service
Not both payments. Severance and long service payment use a similar formula, but they are different legal routes. An employee does not receive both for the same period of service.
MPF offset after 1 May 2025. This page only lets employer mandatory MPF reduce the portion earned before 2025-05-01. Service from that date is not offset by those accrued benefits. The figure depends on the employer's records, not only the amount entered here.
NOTE:From 1 May 2025, Hong Kong abolished the MPF offsetting arrangement. Employers can no longer use MPF contributions to offset severance payment or long service payment for service after the transition date; the pre-transition arrangement still applies for service before that date. This calculator automatically splits your service into pre- and post-transition periods, and only deducts the offsettable amount from the pre-transition portion. The actual amount is subject to the Labour Department's notice or your employer's calculation.
Hong Kong long service payment formula: eligibility first
The long service payment formula is close to severance payment, but the legal routes differ. Severance payment is mainly about redundancy, lay-off or a fixed-term contract that is not renewed because of redundancy, and normally needs 24 months under a continuous contract. Long service payment covers other qualifying endings, including dismissal other than for serious misconduct, a non-redundancy non-renewal, resignation at 65 or above, resignation for certified permanent unfitness, or death in service, and normally needs five years. The same period of service does not attract both payments.
Resigning yourself before 65 usually qualifies for neither long service payment nor severance. Changing jobs or leaving on your own is not enough, even after many years. Resignation on the ground of old age generally requires age 65. Before 65, the usual exception is a prescribed medical certificate of permanent unfitness for the current job. Summary dismissal for serious misconduct generally qualifies for neither. Confirm a qualifying reason, then apply the dates and wages to the formula.
The Labour Department monthly-paid method is (last full month's wages × 2/3) × reckonable years of service. The wage base is capped at two-thirds of HK$22,500 (HK$15,000), and the total is capped at HK$390,000. Incomplete years are counted proportionally. An employee may instead use the 12-month average wage before termination. Daily-rated or piece-rated employees use 18 days' wages chosen from the last 30 normal working days. This page is a monthly-paid planning estimate, not the Labour Department calculator.
1 May 2025 is the offsetting transition date. If employment straddles that date, split service into pre- and post-transition portions. Employer mandatory MPF accrued benefits may still reduce the pre-transition portion under the transitional rules. Service from that date is not offset by those benefits. This page applies an entered offset only to the pre-transition portion. It does not decide voluntary contributions, gratuities or other special cases.
Commission, fluctuating wages, incomplete months and whether the contract was continuous can all change the figure. Use employment records and the Labour Department calculation. Keep the contract, wage statements and termination papers if the amount is disputed.
Related guide
Hong Kong Long Service Payment: Eligibility, Resignation and MPF Offset Reform
Decide the termination reason first. Five years of service is not by itself a payment guarantee.
Read the guideData status
Hong Kong employment thresholds checked on 2026-10-05
The calculation framework follows the Employment Ordinance and Labour Department guidance, including the 713 average-wage principle.
Wage periods, service length, leave days and termination details are user inputs; actual entitlement depends on the contract and full wage records.
Does not resolve every commission or bonus treatment, rest-day arrangement, continuous-employment dispute, exemption or court ruling.
2026-08-08: Rechecked Labour Department calculation guidance, the offsetting transition and the 2026 statutory-holiday count.
References
- 1How severance and long service payment are calculated(Labour Department)
- 2Concise Guide: severance payment and long service payment(Labour Department)
- 3Abolition of MPF offsetting: employees joining on or after 1 May 2025(Labour Department)
- 4Abolition of MPF offsetting: employees joining before 1 May 2025(Labour Department)
Site data last reviewed: 2026-10-05 · The sources above are for reference only; please refer to the latest official announcements from the relevant organisations.
Think a figure, rule or source needs updating? Report this pageFAQs
If I resign before 65, is there long service payment?
What is the Hong Kong long service payment formula?
How do severance and long service payment differ?
Is the formula the same for severance and long service payment?
Is this calculator the Labour Department figure?
Can MPF still offset long service payment after 1 May 2025?
Which wage does the Labour Department use?
A useful scenario to try
Confirm a qualifying termination reason first, then the wage-base cap and service around the transition date; a formula amount is not an entitlement.
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Client-side only: All data is calculated on your device and is not uploaded to any server. Results are for reference only and do not constitute professional financial or legal advice.