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.
Minimum Wage
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:
Hours of Work
The normal working hours shall not exceed 8 hours a day and 48 hours per week with a break interval of at least 30 consecutive minutes in order to ensure that he does not render more than 5 consecutive hours of work to ensure that the employee will not work more than 5 consecutive hours.
Mandatory Holidays
10 days per calendar year, including January 1; Lunar New Year (the first, second and third days of Lunar New Year); Cheng Ming Festival; May 1; The day after the Mid Autumn Festival, October 1, Chong Yeong Festival, Macau SAR Establishment Day, being the 20th of December.
Compensation for Work Performed on Mandatory Holidays
the employee shall compensate by one of the following ways:
- 1 rest day within 3 months and 1 day of additional compensation
- 2 days of additional compensation or
- 2 rest days within 3 months
Rest Day
24 consecutive hours for every week of work.
Overtime
Overtime work shall be arranged by employer on the following situations: 1) by employee consents with 120% pay rate of overtime hours; 2) by prior determination of employer in force majeure cases or imminence of major losses, 150% overtime pay rate and total daily working hours cannot be more than 16 hours; 3) by employer’s prior determination due to increased unforeseen demand of work, with 150% pay rate of overtime hours and total daily working hours cannot be more than 12 hours.
13th Month Payment
There is no legal requirement under the Labour Law for an employer to pay end of year payment, which includes bonus and double pay, unless included in the employment agreement.
Statutory Leaves Entitlement
- Annual leave: after completion of 1 year of service, employees are entitled to a minimum of six working days of paid annual leave for every calendar year. For employee who has completed probation but with less than 1 year of services, the 0.5 day of annual leave for each complete month of services.
- Sick leave: after confirmation of employment, the employee is entitled to 6 days of paid absence with medical certificate for sickness or accident in each calendar year.
- Paternity Leave: 5 paid days leave, which can be taken, consecutively or interpolated, since the mother completes three months pregnancy and up to thirty days after the child’s birth.
- Maternity leave: 70 days, 63 of which are mandatorily enjoyed after bay birth and the remaining 7 days may be taken by the decision of the employee.
- Termination of Employment
Notice Period
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
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
Social Security Fund System
Law No. 4/2010, Social Security Fund System came into effect from 1 January 2011. Employers and their resident employees require to make obligatory contributions to the Social Security Fund. Since January 2017, the monthly contribution is:
For non-resident employees with valid work permits, there is a MOP200.00 recruitment levies contribution by employer per month.
Non-mandatory Central Provident Fund System
The Non-mandatory Central Provident Fund System (“NMCPF”) is a defined contribution scheme with an employee’s individual account, comprises of 3 sub-accounts: a government-managed, a contribution and a preserved sub-accounts.
Although voluntarily, the employer can set up the joint scheme contribution sub-account for the employees. Both employers and employees make monthly contributions calculated at 5% of the employee’s monthly wages with lower and upper contribution cap to be MOP7,007 and 33,280 respectively.
Medical and Life Insurance
The medical and related insurance benefits are optional schemes in Macau SAR employment.
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.
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