⚠️ This page is for general education and reference only and is not legal advice. Notice periods and payment in lieu of notice are governed by the Employment Ordinance (Cap. 57) and your contract; if in doubt, consult the Labour Department or a professional.
How long is the notice period? (Table 1)
Either party may end a contract of employment by giving the other due notice or payment in lieu of notice. The length depends on the contract stage and on whether the contract itself sets a notice period. Table 1 of chapter 9 of the Labour Department's Concise Guide gives the rules for a continuous contract (employed for 4 weeks or more, at least 18 hours a week):
| Employment condition | Length of notice | Payment in lieu |
|---|---|---|
| Within the first month of probation | Not required | Not required |
| After the first month of probation, contract sets a notice period | As agreed, but not less than 7 days | Table 2 |
| After the first month of probation, contract is silent | Not less than 7 days | Table 2 |
| Continuous contract, no / after probation, contract sets a notice period | As agreed, but not less than 7 days | Table 2 |
| Continuous contract, no / after probation, contract is silent | Not less than 1 month | Table 2 |
Two points matter in practice. First, 7 days is a statutory floor: a clause saying "3 days' notice" is treated as 7 days (the tool above lifts it and says so). Second, the familiar "one month" is only the default when the contract is silent; an agreed 2- or 3-month notice period is equally binding on both sides. For a non-continuous contract with no or completed probation, the notice period is simply whatever was agreed.
How is payment in lieu of notice calculated? (Table 2)
Payment in lieu is based on the employee's average wages over the past 12 months; the formula follows the unit of the notice period:
- Notice in days or weeks: average daily wages in the 12 months before the day notice is given × the number of days in the notice period for which wages would normally be payable.
- Notice in months: average monthly wages in the 12 months before the day notice is given × the number of months in the notice period.
If no notice was given (for example, leaving at once and paying in lieu), the 12 months before the day the contract is terminated are used instead. Following Appendix 1, the "12 months" are the 12 calendar months preceding the specified date: for notice given on 22 June, the averaging period is 1 June of the previous year to 31 May. An employee with less than 12 months' service uses the whole employment period. Enter the notice date above and the tool shows the averaging period and the last day of employment.
Periods to disregard: exclude (i) periods for which the employee was not paid wages or full wages — rest days, statutory holidays, annual leave, sickness days, maternity leave, paternity leave, sick leave due to work injuries, leave taken with the employer's agreement, and any normal working day on which the employer provided no work — together with (ii) the sums paid for those periods. Fully paid leave is not excluded. This is the same method as the average daily wages (ADW) calculator.
What counts as wages? Under the Ordinance, wages are all remuneration, earnings, allowances (including travelling and attendance allowances, commission and overtime pay), tips and service charges, but not the employer's MPF contribution, gratuitous or discretionary commission or bonus, end of year payment, a gratuity on completing or ending the contract, non-recurrent travelling allowances or reimbursed expenses. Overtime pay is included if it is of a constant character or its 12-month average is at least 20% of the average monthly wages.
Fixed monthly salary with fully paid leave: the average monthly wages equal the salary, so one month's payment in lieu ≈ one month's wages, and the average daily wages are salary × 12 ÷ 365 (Appendix 1: HK$15,000 a month → HK$493 a day). If your pay includes commission or you took unpaid or half-pay leave, switch the tool to the "12-month wages" mode.
When does the notice period end?
Per the Labour Department guidance republished by 1823: for notice in months, the Ordinance counts the day notice is given, and a "month" runs to the day before the corresponding date in the following month (notice on 13 February → 12 March is the last day). If the following month has no corresponding date it ends on that month's last day (30 January → last day of February), and notice given on the last day of a month ends on the last day of the following month (last day of February → 31 March). For notice in days, the day notice is given may be left out to avoid disputes. The tool applies these rules to the notice date you enter.
Worked examples
Labour Department Appendix 1, Example 4: basic pay HK$6,000 a month plus monthly commission; HK$600,000 earned in the 12 months before notice; 15 days of half-pay study leave paid HK$1,500. Months included = (365 − 15) ÷ 365 × 12 = 11.5; average monthly wages = (600,000 − 1,500) ÷ 11.5 = HK$52,043, so one month's payment in lieu is HK$52,043. Switch the tool to the 12-month mode: its default values are this example.
Simple example: HK$20,000 a month, fully paid leave. Contract silent on notice, probation completed → statutory 1 month, payment in lieu = HK$20,000. Still in the second month of probation with a silent contract → 7 days; average daily wages = 20,000 × 12 ÷ 365 = HK$657.53; payment in lieu = 657.53 × 7 = HK$4,602.74.
Probation, annual leave and other termination rules
Annual leave during notice: when the employer terminates with notice, statutory annual leave cannot be counted within the notice period. When the employee resigns, the Court of Final Appeal has held that this restriction does not apply and the employee may choose to take statutory annual leave during the notice period; cases differ and a dispute is for the court. Untaken leave and pro-rata annual leave pay on termination can be estimated with the annual leave calculator.
When an employer may not dismiss: an employee confirmed pregnant who has served a notice of pregnancy; an employee on paid sick leave; by reason of giving evidence or information in proceedings under the Employment Ordinance, work accidents or work safety legislation; for trade union membership or activities; and an injured employee before a compensation agreement or certificate of assessment. The maximum fine is HK$100,000.
Termination without notice: an employer may summarily dismiss, without notice or payment in lieu, an employee who wilfully disobeys a lawful and reasonable order, misconducts themselves, is guilty of fraud or dishonesty, or is habitually neglectful of duties — a serious disciplinary action reserved for very serious misconduct or repeated warnings without improvement; taking part in a strike is not a lawful ground. An employee may terminate without notice if they reasonably fear physical danger by violence or disease, are subjected to ill-treatment by the employer, or have at least 5 years' service and are certified by a registered medical practitioner or Chinese medicine practitioner as permanently unfit for the work.
Payment deadline: all termination payments other than severance payment — outstanding wages, payment in lieu of notice, untaken and pro-rata annual leave pay, end of year payment, long service payment and so on — must be paid as soon as practicable and not later than 7 days after termination. Late wages carry interest, and wilful non-payment carries a maximum fine of HK$350,000 and 3 years' imprisonment. For the amounts see the severance / long service payment calculator and the leave calculator.
Sources
- Labour Department, Concise Guide to the Employment Ordinance, chapter 9 Termination of Contract of Employment (Tables 1 and 2, termination payments):ConciseGuide/09.pdf
- Concise Guide Appendix 1, calculation on the basis of the 12-month average wages (specified dates, disregarded periods, Example 4):Appendix1.pdf
- Concise Guide chapter 3 Wages (definition of wages, overtime pay):ConciseGuide/03.pdf
- Labour Department FAQ, Termination of Contracts of Employment (annual leave during notice):cap57d_whole.htm
- 1823, How to calculate the notice period or payment in lieu of notice (how a notice period is counted):1823.gov.hk
- Labour Department 12-Month Average Wages Calculator (official tool, useful as a cross-check):lr.labour.gov.hk
FAQ
How is payment in lieu of notice calculated in Hong Kong?
Notice in days or weeks: average daily wages in the 12 months before the day notice is given × the number of days in the notice period for which wages would normally be payable. Notice in months: average monthly wages in those 12 months × the number of months. If no notice was given, use the 12 months before the day the contract ended. For a fixed monthly salary with fully paid leave, one month's payment in lieu is normally one month's wages.
Is notice required during probation?
Within the first month of probation neither side needs to give notice or payment in lieu. After the first month of probation: the agreed notice (but not less than 7 days), or 7 days if the contract is silent. With no probation, or after probation, on a continuous contract: the agreed notice (not less than 7 days), or one month if the contract is silent.
Can a contract set a 3-day notice period?
No. Under the Employment Ordinance, after the first month of probation and on a continuous contract after probation, an agreed notice period cannot be shorter than 7 days; a shorter clause is treated as 7 days.
When does a one-month notice period end?
For notice in months, the day notice is given counts, and the period ends the day before the corresponding date in the following month (notice on 13 February → last day 12 March). If the following month has no such date it ends on that month's last day, and notice given on the last day of a month ends on the last day of the following month. For notice in days, the day notice is given may be left out to avoid disputes.
Can annual leave be taken during the notice period?
When the employer terminates with notice, statutory annual leave cannot be counted within the notice period. When the employee resigns, the Court of Final Appeal has held that this restriction does not apply and the employee may choose to take statutory annual leave during the notice period; individual cases differ and a dispute is for the court.
When must payment in lieu of notice be paid?
All termination payments other than severance payment, including payment in lieu of notice, must be paid as soon as practicable and not later than 7 days after the date of termination. Late payment carries interest; wilful non-payment is an offence with a maximum fine of HK$350,000 and 3 years' imprisonment.
Can I rely on this calculator legally?
No. It is for general estimation and education only, not legal advice. Rely on the Labour Department's Concise Guide (chapter 9 and Appendix 1), its 12-Month Average Wages Calculator and Cap. 57.