Annual Leave in Hong Kong: What Every Employer Needs to Know

Annual leave in Hong Kong starts at 7 days after the first 12 months of service and increases by one day per year up to a maximum of 14 days. Annual leave only applies to employees on continuous contracts — and following the new "468 rule" effective January 2026, more part-time and casual staff now qualify than before.

Annual leave is one of the most frequently mismanaged entitlements in Hong Kong — employers often confuse statutory minimums with contractual offers, miscalculate leave pay, or miss the service-based accrual progression entirely.

Who qualifies for annual leave in Hong Kong?

Annual leave applies to employees on a continuous contract under the Employment Ordinance — from 18 January 2026, that means anyone employed continuously for four weeks who has worked 17 hours per week or 68 hours in aggregate over that period. This means more part-time and casual staff now qualify than under the previous "418" rule, so employers with flexible-hours staff should review their rosters.

How does annual leave accrue in Hong Kong?

Annual leave in Hong Kong starts at 7 days after the first 12 months of service and increases by one day per year, up to a maximum of 14 days. Probation does not pause the accrual clock — the 12-month qualifying period starts from the first day of employment.

How is annual leave pay calculated?

Annual leave pay is calculated at average daily wages over the 12 months preceding the leave — including wages, allowances, and commissions, but excluding discretionary bonuses. On termination, employers must pay out any accrued but untaken statutory annual leave; failing to do so is a statutory breach, not just a contractual one.

Annual leave at a glance

Area	Rule
Qualifying period	12 months of continuous employment
Entitlement	7 days (year 1), +1 day per year, max 14 days
Continuous contract threshold	17 hrs/week or 68 hrs/4 weeks (from Jan 2026)
Leave pay basis	Average daily wages over preceding 12 months
Carry forward	By mutual agreement only
On termination	Must pay in lieu of untaken statutory annual leave
Statutory holidays	Separate from annual leave; 15 days from 2026

In Summary

Annual leave compliance isn't just about offering enough days — it's about tracking service progression correctly, calculating leave pay accurately, and knowing which staff now qualify under the updated continuous contract rules. If those gaps exist in your current HR system, they're the ones most likely to produce a Labour Tribunal claim, and that's exactly what HR Plus helps Hong Kong employers close.