Employer

Calculation of severance payment (SP)/ long service payment (LSP)

Employees whose employment commences before the transition date

Employee's SP/LSP will be divided into pre-transition portion and post-transition portion, with the calculations as below:

Monthly-paid employee	Daily-rated/piece-rated employee
Pre-transition portion of SP/LSP
(last full month's wages immediately preceding the transition date × 2/3） × years of service before the transition date	(any 18 days' wages chosen by the employee out of his/her last 30 normal working days immediately preceding the transition date ) × years of service before the transition date
Post-transition portion of SP/LSP
(last full month's wages immediately preceding the termination of employment × 2/3) × years of service starting from the transition date	(any 18 days' wages chosen by the employee out of his/her last 30 normal working days immediately preceding the termination of employment) × years of service starting from the transition date

In the circumstance when the total SP/LSP exceeds $390,000

According to the Employment Ordinance, the existing maximum amount of SP/LSP is $390,000. After the abolition of MPF offsetting arrangement, the maximum amount of SP/LSP remains unchanged. If an employee's total SP/LSP (i.e. the sum of pre- and post-transition portion of SP/LSP) exceeds $390,000, the amount in excess will be deducted from the post-transition portion (i.e. the amount of post-transition portion of SP/LSP should be equal to the remainder of $390,000 minus the amount of pre-transition portion of SP/LSP).

Employees whose employment commences on or after the transition date

The calculation and cap of SP/LSP under existing provisions in the Employment Ordinance remain unchanged:

Monthly-paid employee	Daily-rated/ piece-rated employee
(last full month's wages immediately preceding the termination of employment × 2/3) × years of service	(any 18 days' wages chosen by the employee out of his/her last 30 normal working days immediately preceding the termination of employment) × years of service

Employment period preceding the transition date	Calculation ratio for pre-transition portion of SP/LSP
Less than 12 months but more than or equals to 1 month	(a) Last full month's wages immediately preceding the transition date; or (b) Average wages for the employment period before the transition date
Less than 1 month	First full month's wages after commencement of employment

Employment period preceding the transition date	Calculation ratio for pre-transition portion of SP/LSP
Less than 12 months but more than or equals to 30 days	(a) Any 18 days' wages chosen by the employee out of his/her last 30 normal working days immediately preceding the transition date; or (b) Average wages for the employment period before the transition date.
Less than 30 days	Any 18 days' wages chosen by the employee out of his/her first 30 normal working days after the commencement of employment