Macau Special Administrative Region (“Macau SAR”) Payroll – Basic Facts
By Gary Tok,
Group Chief Commercial Officer, Tricor Group
Macau Special Administrative Region (“Macau SAR”) is about 60 kilometres from Hong Kong, situating at the mouth of the Pearl River Delta and bordering on Guangdong Province. Macau SAR. Macau SAR has no foreign investment restrictions and with its low tax regimes system in the Asia Pacific location, Macau attracts many foreign entities to set up branch offices. There are many foreign banks registered and established in Macau. Macau SAR’s main economic industries include gaming, tourism, hospitality, manufacturing, banking and other financial services.
The tax year for Macau SAR runs from 1st January to 31st December. An employer is required to keep a record of each employee’s data in books, data cards or information system for the duration of the employment and up to 3 years after the cessation of employment.
For a Macau SAR employer, there are certain responsibilities under different Macau labour and employment laws and regulations:
Macau Labour Law
The Macau Labour Law is the main piece of legislation governing basic principles and conditions of employment in Macau, which establishes the basic policy principles in labour and employment rights. Below are several other ordinances that are related to employment related affairs:
- Framework Law on Employment Policy and Worker’s Rights
- Regulation on Prohibition of Illegal Work
- Labour Relations Law
- Minimum Wage for Workers
- Law on Social Security System
- Non-mandatory Central Provident Fund System
- Law and Regulation on Employment and Conditions or Responsibilities to be established in the Employment of Non-Resident Workers
- Employees’ Compensation Insurance Ordinance
For Macau local residents, there is no compulsory requirement to enter into written employment contract (can be entered into verbally) and fixed term but not for non-resident employees. For probation period, it is 90 days and 30 days for non-fixed term and fixed term employment contracts respectively.
Employees’ Compensation Ordinance
In accordance with Decree Law No. 40/95/M Employees’ Compensation Insurance Ordinance, employees’ compensation insurance is compulsory for all employers. Employees are entitled to compensation for loss or injuries resulting from occupational accident or occupational disease in the course of employment.
Macau SAR’s minimum wage, from November 2020, is MOP32 per hour (daily paid to be MOP256 with 8 hours working day and monthly paid to be MOP6,656 with 208 working hours per month).
Compensation and Benefits
Below are some highlights on statutory benefits and entitlements under Macau SAR employment labour laws:
Statutory Leaves Entitlement
The employer and employee can agree upon the notice period for termination of employment but shall not exceed the length of the statutory period
Upon termination of employment, an employer is obliged to issue a certificate of employment if requested by the employee.
Severance payment is applicable if the employer terminates the employment without just cause. The maximum amount of basic monthly remuneration for calculating severance pay is MOP21,000 unless employee and employer agree on a higher amount.
Social Security and Provident Fund Systems
For non-resident employees with valid work permits, there is a MOP200.00 recruitment levies contribution by employer per month.
Professional Tax (Salaries Income Tax)
Macau SAR Professional Tax is using pay as you earn system. Employer deducts the calculated professional tax from employees’ monthly salaries and pays to Macau Finance Services Bureau in every April, July, October and January
For 20/21,the annual tax exception income threshold is MOP144,000.00 and below is the progressive tax rates:
There is a higher tax rate of 5%, by applying the above progressive rates, on taxable income for foreigners with no work visa (for example, freelancers or entertainers).
There is no difference between local residents, expatriates and/or non-residents for salaries tax purposes.
Expatriates in Macau
Work and Resident Permits
Foreign employees must hold a work permit from the Labour Affairs Bureau to work in Macau SAR. It takes 3 to 4 months to complete the work permit application and the employer has to provide substantial proof that the position cannot be hired locally in order to obtain the approval on hiring non-resident employee.
After the approval of the work permit by the Labour Affairs Bureau, the expatriate requires to apply for the residency permit from the Immigration Service of the Public Security Police Force of Macau.
About Tricor Group – Leading Business Expansion Specialist in Asia
Tricor Group (Tricor) is the leading business expansion specialist in Asia, with global knowledge and local expertise in business, corporate, investor, human resources & payroll, and corporate trust & debt services. Tricor provides the building blocks for, and catalyzes every stage of your business growth, from incorporation to IPO.
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