- The required information for the employer’s return
- Employer’s returns
- Can employers extend the filing period?
- What are the penalties for employers if not complying with the requirements?
- No idea on how to fill out the form? Download the specimen here
- Download the employer’s return
- Submit employer’s return with Workstem!
The annual tax filing season is coming. As an employer, you need to file an “Employer’s Return” to the Inland Revenue Department (IRD) to report your employees’ salaries. On the first working day of April each year, the IRD will send the Employer’s Return (IR56 forms) to most employers. You need to submit this form within the specified period (within 1 month), otherwise you may be subject to a penalty.
According to the regulations, you are responsible for keeping your employees’ salaries records and reporting them to the IRD. After the tax return is completed, you should provide the employee a copy. Once the employee receives it, he/she can complete his/her own return based on the information on the form.
The required information for the employer’s return
- Employee’s Name
- Hong Kong Identity Card Information
- Personal Residential Address
- Employment Period
- All variety sources of income, including bonuses, commissions, etc.
- Marital status and spouse information (if married)
The employers have to inform IRD once there is any change in the employee’s personal particulars or in the employee’s terms of employment, and the employers are required to keep business accounting records, including payroll records, for at least 7 years. Each year, employers are required to file a “BIR56A” for each employee’s salary. Please find the details below.
Employers can download the required forms from the IRD website.
|IR56B||For continuously employed employees, including single and paid an annual income of $132,000 or more; all married employees; all part-time employees and directors.|
|IR56E||Employers are required to file it within 3 months of commencement of employment of an employee.|
|IR56F||Employers are required to file it 1 month prior to the cessation of employment of an employee.|
|IR56G||If an employee may leave Hong Kong for a long period or permanently, the employer is required to file two copies of this form one month before the employee’s expected departure date from Hong Kong.
Meanwhile, the employer should not pay the employee any further salary from the form submission date, until the employee has completed the tax clearance process and is able to produce the “Consent to Release” form issued by the IDR.
|IR56M||A remuneration payment notice to people other than employees.|
Employers are required to provide copies of the above forms (IR56B/IR56E/IR56F/IR56G/IR56M) to the relevant employees upon completion.
Can employers extend the filing period?
In Hong Kong, if you are an employer, you are required to submit an Employer’s Return by the end of May each year, together with the amount of salaries tax. If you fail to submit the return by the deadline due to not employing anyone, not starting work, or have stopped working during that financial year, you may face penalties or other consequences.
However, IRD will usually consider the application of extending the employer returns, only if the application is requested before the deadline with a reasonable justification. If your application is approved, you will be given a new deadline to file your return. You may face penalties or other consequences if you submit an invalid application or submit it overtime without previous approval. Therefore, if you are unable to file your return on time, please file an extension application to the IRD as soon as possible.
What are the penalties for employers if not complying with the requirements?
- Fine: The Hong Kong IRD may impose a fine on employers who file the employer returns overdue or file a false one. The amount of the penalty depends on the number of days overdue and the amount of tax.
- Interest: If an employer fails to pay the wage tax by the due date, the IRD may require an interest to be paid.
- Penalty: If an employer is found to have filed a false report, a penalty may be imposed. According to the Inland Revenue Ordinance, the penalty might be equivalent to three times of the tax owed amount, or up to HK$10,000.
- Legal action: If an employer’s report is confirmed false, the IRD may initiate legal action against the employer, he or she may face legal sanctions.
No idea on how to fill out the form? Download the specimen here
Download the employer’s return
Feel free to download tax returns from the IRD website.
Submit employer’s return with Workstem!
Filing a tax return is a tedious and important task which includes many factors to consider. If you are not familiar with tax regulations and calculation methods in Hong Kong, we highly recommend completing it with the Workstem‘s tax filing feature, which provide seamless tax returns connections, automatic taxable amounts calculation, automatic payroll generation, various electronic tax form generation, easy online tax filing, tax form push to mobile App, paperless storage of past tax information and more. In addition, our partner accountants or tax consultants can also offer professional tax filing advice and guidance to ensure your wage tax returns are legally compliant and correct.