Helper Contract Termination in Hong Kong: How to Calculate the Final Settlement Payment

Overview

When a foreign domestic helper's contract ends — whether by employer notice, helper resignation, or contract expiry — the employer must settle all outstanding financial entitlements before the helper departs. Getting this right matters: late or short payment is a breach of the Employment Ordinance, and disputes can escalate to the Labour Tribunal.

This guide covers every component of a standard FDH termination settlement.

Step-by-Step: What to Calculate

1. Outstanding wages

Pay all wages earned up to and including the last working day. Daily rate: monthly wage × 12 ÷ 365. If the employer pays a cash food allowance (HK$1,236/month for current contracts), include that too.

2. Wages in lieu of notice

• Standard notice: Either party must give one month's written notice — or pay one month's wages instead.
• Employer terminates without notice: Employer pays one month's wages to the helper.
• Helper terminates without notice: Helper owes one month's wages to the employer; this may be deducted from the final settlement.
• Summary dismissal (serious misconduct such as fraud or wilful disobedience): The employer may dismiss without notice pay — but all other entitlements still apply.

3. Pro-rata annual leave pay

FDHs are entitled to annual leave after 12 months of continuous service:

Years of service	Annual leave
1–2 years	7 days
3 years	8 days
4 years	9 days
5 years	10 days
6 years	11 days
7 years	12 days
8 years	13 days
9+ years	14 days (maximum)

On termination:

• Unused leave from completed leave years must be paid in full.
• Current partial leave year (service 3+ months): pro-rata days = (full-year entitlement) × (days worked this year ÷ 365), paid at average daily wage.
• No entitlement if service is under 3 months.

4. Statutory holiday compensation

If any of the 14 annual statutory holidays were worked without a replacement day off being granted, compensation at the average daily wage rate is owed.

5. Severance Payment or Long Service Payment

These are usually the largest items in any settlement:

	Severance Payment (SP)	Long Service Payment (LSP)
Eligibility	24+ months of service	60+ months (5 years) of service
Trigger	Dismissal or non-renewal due to redundancy	Dismissal or non-renewal for reasons other than misconduct or redundancy
Formula	Monthly wage × 2/3 × reckonable years	Same formula
Monthly wage cap	HK$22,500	HK$22,500
Total cap	HK$390,000	HK$390,000

Redundancy examples: family relocating overseas, reducing household size, or no longer needing a helper.

Example (SP): Helper with 3 years 4 months at the MAW of HK$5,100:

• HK$5,100 × 2/3 = HK$3,400 per reckonable year
• 3 years 4 months = 3.33 reckonable years
• SP = HK$3,400 × 3.33 ≈ HK$11,333

Domestic Helpers are exempt from MPF, so the MPF offset abolition (May 2025) does not affect FDH SP/LSP calculations.

Note: Employers are not obliged to pay LSP or Severance Payment if it is the domestic helper that is resigning rather than being dismissed by the Employer. These rules are commonly misunderstood by domestic helpers and may ask for it half way through their service thinking they have surpassed the 5 years mark. This is not how LSP works and Employers are not obliged to pay it. If you are unsure, you can call Labour and ask about this or your employment agency, and you can show your domestic helper the rules here: Labour Rules: Employer's Corner. See the specific conditions in our blog here at this link.

SP and LSP are statutory entitlements — any agreement to waive them is void under Section 70 of the Employment Ordinance.

6. Return passage

The employer must provide a free return ticket to the helper's place of origin, including any domestic leg of the journey. This applies regardless of who terminates and regardless of reason — including summary dismissal.

7. Daily travel and food allowance

HK$100 per day from departure in Hong Kong until arrival at the helper's home, calculated on the most direct route.

Important Notes

• Payment deadline: All final payments must be made within 7 days of the last working day.
• Immigration notification: Submit Form ID 407E to the Immigration Department within 7 days of the termination date.
• Helper's stay in HK: After termination, the helper has up to 14 days to remain in Hong Kong before departure.
• Unused sick leave: Accrued sick leave days lapse at contract end — they are not paid out on termination.
• Cannot waive statutory rights: SP and LSP cannot be reduced or waived by private agreement; any such agreement is void under Section 70 of the Employment Ordinance.

Calculate Your Settlement

Working out the numbers manually takes time — and mistakes can be costly. GMA's free termination settlement calculator walks through every component, checks SP/LSP eligibility automatically, and produces a printable receipt.

Try the FDH termination settlement calculator →

Related Resources

• Labour Department — FDH FAQ and Guide
• Standard Employment Contract (ID 407)
• Notification of Termination (ID 407E)
• Chapter 11: Severance and Long Service Payment — Labour Department