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 the current calculation, i.e. calculated on the basis of the last full month’s wages immediately preceding the termination of employment
-
Cannot be offset by employers’ MPF mandatory contributions (ERMC)
Zoom
-
The employee retains the full amount of SP/LSP (i.e. $60,000)
-
The employee retains the full amount of ERMC (i.e. $50,000)
-
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
-
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).
