What Hong Kong Employers Must Prepare When a Helper’s Contract Ends

When a foreign domestic helper’s employment ends, every termination payment falls due within 7 days of her last day. That is a short window, and what you owe depends far less on how much you have paid her before than on one thing: how the employment ended. Get that wrong and you either underpay — which is a claim waiting to happen — or overpay money you never owed.

The point most employers miss: under the Employment Ordinance, letting a fixed-term contract expire without renewing it on the same terms counts as a dismissal. The standard FDH contract is a 2-year fixed term. So an employer who simply does not renew after 5 or more years of service owes long service payment — no firing, no argument, no dispute required.

First, How Did the Employment End?

Everything else follows from this. There are five ways it can end, and the follow-up detail matters as much as the headline.

Contract expired — and you chose not to renew. Long service payment if she has 5+ years of service.
Contract expired — because your household no longer needs a helper. Severance payment if she has 24+ months of service.
Contract expired — but you offered renewal on the same terms and she refused. Neither payment is owed.
She resigned, ordinarily. Neither payment is owed, however long she stayed.
She resigned aged 65 or above, or on ill health certified by a registered doctor. Long service payment if she has 5+ years.
You ended the contract, not for redundancy and not for misconduct. Long service payment if she has 5+ years.
You dismissed her summarily for serious misconduct. Neither payment is owed.
She died in service. Long service payment to her estate if she had 5+ years.

What You Owe in Every Case

Outstanding wages up to and including her last working day, pro-rated for a partial month.
Payment in lieu of untaken annual leave. This covers both completed leave years and a pro-rata share of the incomplete one, provided she served at least 3 months in it. Only a summary dismissal for misconduct forfeits the pro-rata part.
A return passage to her place of origin. This is owed even when she resigns, and even when she is dismissed. Most employers buy the ticket rather than hand over cash — either is fine, but forgetting it is not.
A food and travelling allowance for the journey home, set by the standard contract at HK$100 per day of travel.

What Depends on How It Ended

Severance payment and long service payment are mutually exclusive — you will never owe both. Both use the same formula: two-thirds of her last full month’s wages, multiplied by her years of service, pro-rated for an incomplete final year.

At the current minimum allowable wage, with the food allowance counted in, that works out to roughly HK$4,200 per year of service. So a helper leaving at the 5-year mark is owed around HK$21,000, and one at 10 years around HK$42,000. The Employment Ordinance caps exist but sit far above anything an FDH salary can reach, so they will not affect your figure.

Payment in lieu of notice runs in both directions, and this is worth being precise about. The standard contract requires one month’s notice from either side. If you ended the contract with less notice, you owe her the unserved portion. If she left early, she owes you — though this is commonly waived by agreement. A contract that simply expires needs no notice from anyone.

Obligations That Are Not Money

Notify the Immigration Department in writing within 7 days of termination. Both you and she must do this.
Issue a release letter or certificate of employment so she can apply for her next job.
Apply to the Labour Department for a pro-rata refund of the unused portion of the Employees Retraining Levy — this is money back to you, and it is easy to forget.
Cancel or adjust your employees’ compensation insurance policy after her last day.

The one hard date: all termination payments must be paid within 7 days of the last day of employment. Not 7 days from when you finish the paperwork, and not the next payday.

Common Mistakes

Paying cash in lieu of rest days. This is not permitted — rest days must be granted, not bought out.
Forgetting the return passage because she resigned. Her resigning does not remove the obligation.
Assuming a resignation never pays out. Resigning at 65 or above, or on certified ill health, qualifies for long service payment at 5 years.
Assuming 5 years of service alone earns long service payment. It does not — the reason for leaving decides. A plain resignation at 10 years pays nothing.
Treating non-renewal as neutral. It is a dismissal under the Ordinance, and it is the single most common way these payments become due.

Sources checked

MaidDay works all of this out for you. Enter how the employment ended and her last working day, and it calculates the final payment, tells you whether severance or long service payment applies and why, and produces a bilingual settlement statement with signature lines and a tick-box checklist for the return ticket, release letter and Immigration notification. Free, and it runs in your browser.

This article is for general reference and is not legal advice. Entitlements turn on the specific facts of each case. Verify your figures with the Labour Department and take professional advice before you pay.

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This article is for general reference only and does not constitute legal or professional advice. Salary calculations may be inaccurate. Please verify all information against your employment contract, the Employment Ordinance (Cap. 57), and professional advice. See our full Disclaimer.