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IR56F Form IRD Hong Kong

A Look at the IR56F Form in Hong Kong

In Hong Kong, once a business brings an employee on board, it must adhere to a variety of reporting responsibilities. An important one among these is the task of submitting Hong Kong Employer Returns. While many are familiar with the IR56B form, the IR56F form is equally important.

The IR56F form is used when an employee concludes their employment with a company in Hong Kong.

This article aims to shed light on this form, providing employers with the necessary insights.

What is the IR56F Form?

Also known as the “Notice by Employer of Cessation of Employment of Employee,” the IR56F form becomes relevant when an employee leaves the company.

Reasons for cessation of employment might include resignation, retirement, dismissal, death, etc.

Hong Kong employers need to file this form with the Inland Revenue Department (IRD) at least one month before the date of  termination of employment.

If an employee is about to depart from Hong Kong, the IR56G Form, instead of IR56F Form, should be completed.

Apart from employees, the IR56F Form is also applicable to a director who ceases the employment/directorship with the company.

Details Required on the IR56F Form

Completing the IR56F requires specific information:

  • Basic personal details;
  • Date and reason for leaving the job;
  • Detailed income report from April 1 of the current tax year until the employee’s last day, excluding certain payments like severance and long service pay made in accordance with the Hong Kong Employment Ordinance.

Key income details on the form include:

  • For item (f) Back Pay, Payment in Lieu of Notice, Terminal Awards or Gratuition, severance payment or long service payment made in accordance with the Employment Ordinance should not be included. The amount to be reported specifically refers to:
    • a lump sum payment / gratuity paid upon retirement or termination;
    • payment in lieu of notice, whether paid under the term of an employment contract or the Employment Ordinance; and
    • deferred pay or arrears of pay resulting from a salaries or wages award.
  • Item (g) Certain Payments from Retirement Schemes would refer to any employer contribution via the following:
    • Occupational Retirement Schemes provided by the company and unrecognised by the Hong Kong government
    • Occupational Retirement Schemes provided and recognised by the Hong Kong government for any reason other than termination of service with 10 years of service or more, death, incapacity, terminal illness or retirement
    • Mandatory Provident Fund (MPF) Scheme for any reasons other than permanent departure from Hong Kong, death, incapacity, terminal illness or retirement (applicable to employer’s mandatory contributions)
    • MPF Scheme for termination of service with less than 10 years of service (applicable to employer’s voluntary contributions)
    • MPF Scheme for any reasons other than retirement, death, incapacity, terminal illness or termination of services with 10 years of service or more (applicable to employer’s voluntary contributions)
    • Proportionate Benefit Rule
  • Place of residence provided (if any)
    • Similar to IR56E, you should only fill up this field if the company provides the place of residence on the basis of either rent-free or rent-subsidised (can be through rental reimbursement).

Considerations for Submitting the IR56F Form

If IR56F has been filed for an employee, it is not necessary to submit an IR56B form for the same income period.

Should there be additional compensation post-employment, an “additional” IR56F form must be submitted to declare this income.

Should You Engage a Professional Service Provider?

Handling HR and payroll administration can be intricate and time-consuming. Although these tasks divert resources from primary business activities, they are essential for smooth operation and compliance.

HKWJ Tax Law is at your service to manage these critical functions. We can assist in accurately completing your IR56F forms, and other Employer’s Return Forms, as well as execute payroll and other HR services.

Contact us via the form below or info@hkwj-taxlaw.hk for more information.

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