Long Service Payment and Severance Payment Calculator
Enter monthly wages, length of service and the reason employment ended to estimate Long Service Payment or Severance Payment, the cap, eligibility conditions and the transition rules for the abolition of MPF offsetting.
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Calculator
How the rules work
- Severance Payment needs at least 24 months of continuous employment and dismissal by reason of redundancy, a fixed-term contract expiring without renewal by reason of redundancy, or lay-off. Long Service Payment needs at least 5 years of continuous employment and dismissal that is neither summary dismissal for serious misconduct nor redundancy, a fixed-term contract expiring without renewal, death, resignation on ill health, or resignation at age 65 or above. You cannot receive both for the same situation.
- For monthly paid employees: (last full month's wages × 2/3) × years of service, where the 2/3 amount is capped at HK$15,000 (2/3 of HK$22,500). Incomplete years are counted pro rata.
- The statutory maximum is HK$390,000.
- MPF offsetting was abolished from 1 May 2025. If employment ends on or after that date, the employer can no longer use accrued benefits from its mandatory MPF contributions to offset the payment for service from that date, but may still use voluntary contributions and service-based gratuities. The abolition has no retrospective effect.
- If employment straddles 1 May 2025, the payment is split in two. The earlier portion (to 30 April 2025) uses the last full month's wages before that date and can still be offset by employer contributions. The later portion uses the last full month's wages before termination and cannot be offset by mandatory contributions. The two portions together cannot exceed HK$390,000.
- This tool covers monthly paid employees only. For daily-rated or piece-rated staff (18 days' wages) and for MPF-exempted occupational retirement schemes, see the Labour Department's Concise Guide to the Employment Ordinance.
- Eligibility also depends on a continuous contract and on whether the employee unreasonably refused a written offer to renew or re-engage. Follow the Labour Department's guidance.
Eligibility and formula at a glance
| Item | Severance Payment | Long Service Payment |
|---|---|---|
| Continuous employment | At least 24 months | At least 5 years |
| Main situations | Dismissed by reason of redundancy; fixed-term contract not renewed by reason of redundancy; laid off | Dismissed other than for redundancy or summary dismissal; fixed-term contract not renewed; death; resignation on ill health; resignation at 65 or above |
| Formula for monthly paid staff | (Last full month's wages × 2/3, capped at HK$15,000 per year) × years of service; overall maximum HK$390,000 | |
Frequently asked questions
What is the difference between Long Service Payment and Severance Payment?
They use the same formula; the difference is eligibility. Severance Payment needs 24 months of continuous employment and applies to redundancy and lay-off. Long Service Payment needs 5 years and applies to dismissal other than for redundancy, contract expiry, death, resignation on ill health and resignation at 65 or above. You do not receive both for the same situation.
What happens to my MPF now that offsetting has been abolished?
If employment ends on or after 1 May 2025, the employer can no longer use benefits from its mandatory MPF contributions to offset the payment for service from that date, so those benefits stay in your MPF account. The abolition is not retrospective: for cases straddling that date, the earlier portion can still be offset.
What is the maximum I can receive?
The statutory maximum is HK$390,000. For employment straddling 1 May 2025 the two portions together cannot exceed HK$390,000, and any excess is deducted from the later portion.
When must the employer pay?
Long Service Payment is due within 7 days after the contract ends. For Severance Payment, the employee must give written notice within 3 months after dismissal or lay-off takes effect, and the employer must pay within 2 months of receiving it.
Which month's wages are used?
Normally the last full month's wages before employment ends. The employee may instead elect to use average wages over the preceding 12 months. This tool uses the monthly wage you enter, so enter the average if you prefer it.
Disclaimer
These results are general information only. They are not tax, legal or financial advice and do not guarantee any outcome. Actual amounts and eligibility are decided by the Labour Department and the other bodies concerned.
Related guides on this site
- Hong Kong MPF Offsetting Abolition 2026 New Rules: Employer's Complete Guide + Long Service Payment Calculation
- Hong Kong Employment Ordinance Complete Guide 2026: Probation, Annual Leave, Sickness Leave, Maternity Leave, Severance Payment and Minimum Wage
- Hong Kong Employer Payroll, MPF and Tax Checklist 2026: Monthly Actions, Common Mistakes and Automation Solutions