Arrangement for employees whose employment commences on or after 1 May 2025-
Calculation of severance payment (SP) / long service payment (LSP) is the same as it was if the offsetting arrangement had not been abolished, i.e. calculated on the basis of the last full month’s wages immediately preceding the termination of employment
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Cannot be offset by employers’ MPF mandatory contributions (ERMC)
Zoom
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The employee retains the full amount of SP/LSP (i.e. $60,000)
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The employee retains the full amount of ERMC (i.e. $50,000)
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The employee’s aggregate benefits
= SP/LSP + ERMC
= $60,000 + $50,000
= $110,000
(The above figures are for illustrative purpose only.)
Calculation of SP/LSP
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The maximum amount of SP/LSP is $390,000.
An employee may also select to use his/her average monthly wages over the last 12 months immediately preceding termination of employment for the calculation.
The sum should not exceed 2/3 of $22,500 (i.e. $15,000).
An employee may also select to use 18 times of his/her average daily wages over the last 12 months immediately preceding termination of employment for the calculation.
The sum should not exceed 2/3 of $22,500 (i.e. $15,000).
