If an employee’s employment period before 1 May 2025 (transition date) is less than 2 or 5 years, will his/her entitlement to SP/LSP be affected?

The existing entitlement to severance payment (SP)/long service payment (LSP) under Employment Ordinance (EO) remains unchanged after the abolition. Dividing an employee’s employment period into pre-transition employment period and post-transition employment period is only for the sake of calculating his/her pre-transition and post-transition portion of SP/LSP. This will not affect the employee’s entitlement to SP/LSP.

Example

Assumptions –

• Years of service before the “transition date”: 6 months
• Years of service starting from the “transition date”: 5 years
• Last month’s wages immediately preceding the “transition date”: $15,000
• Last month’s wages before termination of employment: $18,000

The employee’s years of service is 5 years and 6 months, and the calculation of SP/LSP is as follows:

Employers and employees may use the calculating tool "EasyCal" on Labour Department Abolition of MPF Offsetting Arrangement thematic website to make initial calculation on the amount of SP/LSP after the abolition comes into effect.

This is not a legal document. The Ordinance remains the sole authority for the provisions of the law explained.