Annual Leave

What is annual leave?

Annual leave is a welfare clause under labor laws, which guarantees employees a certain amount of rest each year. According to the Employment Ordinance, employees are entitled to paid annual leave after every 12 months of employment under a continuous contract. The number of days of paid annual leave increases from 7 days to a maximum of 14 days according to the employee’s seniority.

The importance of annual leave

The annual leave of labor law stipulates that paid annual leave is reasonable and legal, and is protected by employment regulations.

An employer who fails to grant annual leave to an employee without reasonable excuse may be prosecuted and, upon conviction, liable to a fine of up to HK$50,000.

Employers who fail to pay annual leave pay to their employees can be prosecuted and, upon conviction, can be fined up to HK$50,000.

Annual leave calculation

The calculation method of paid annual leave is as follows: in the first two years of service, employees are entitled to 7 days of paid annual leave for every 12 months of employment. Starting from the completion of the third year of service, the number of days of paid annual leave will be reduced from 8 days to Step up by one day, up to a maximum of 14 days after 9 years of service. Annual leave must be for an uninterrupted period. However, if the employee requests, and the number of annual leave does not exceed 10 days, the employer can allow the employee to take the leave not exceeding 3 days separately, and the remaining annual leave should be granted consecutively. If the number of annual holidays exceeds 10 days, the employer must grant at least 7 consecutive days of annual leave, and the remaining annual leave can be granted separately by employees.

How is annual leave pay determined?

Before explaining annual leave pay, it is important to know that employees can accept certain payments from their employers in lieu of part of their annual leave, but only for the portion of annual leave that exceeds 10 days. The daily rate of annual leave pay is the average daily wages (ADW) earned by the employee on the day of annual leave or in the 12 months preceding the first day of annual leave. If the employee has been employed for less than 12 months, the shorter period shall be used for calculation. Employers are required to pay annual leave pay to employees no later than the first payday after the annual leave.

Read more: How paid Annual Leave should be calculated?


Through Workstem One App, employees can self-check their leave balance and submit leave applications; supervisors or HR can approve them in the client anytime, anywhere, and every document is not missed.

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