What Types of Payment Do You Consider for Your Employees?

If you are the executive of a large company, please forward this article to your HR. But if you’re an entrepreneur who needs to hire employees, and pays wages to them, please take some time to read the following article. Here are things that you should pay attention to when you pay to them.

Labour Legislation Guideline

According to Labour Legislation, wages shall be paid at the last day of the wage period. An employer should pay wages to an employee as soon as practicable but in any case not later than seven days after the end of the wage period. Employment contracts should clearly state the last day of the payroll period, so the time will be more flexible for you to pay wages within seven days. However, the payday might not be the same every month. If the payday falls on holiday or weekend, most companies will pay earlier than the regular payday.

Payment Methods

Many companies in Hong Kong pay wages to the employee through automatic bank transfer. Paycheque or cash are also open in other ways. Here are two payment methods call for your attention:

Autopay

An automatic transfer service is not only time-saving and convenient, but all transactions have history to check. As long as the employer and employee hold bank accounts, an autopay is available for any company. For example, you can create up to 50 autoPay groups with a maximum of 200 entries per group in Business Internet Banking, HSBC. It means that you can pay for 10,000 employees at the same time. If there are only a few employees in a small company, the employer can even use e-banking to transfer.

When using automatic transfer, please pay attention to the bank account numbers format and the time of transfer from one bank to another. Many the job seekers and the employers have doubts about the different formats of the banks account numbers. They are usually divided into three parts with a little difference in various banks. Basically, bank account numbers include three-digit bank codes, three-digit branch codes, and the remaining seven to nine-digit account numbers. But most bank cards do not show any bank codes or six-digit numbers start with “622 ” on the front, you should recognize the combinations of 3 and 8-units, or 3 and 9-units.

There are some limitations when transferring from one bank to another, but transfer from HSBC, Hang Seng Bank, Bank of China, Bank of East Asia, DBS and Standard Chartered Bank online is free of charge only have to verify by a PIN-protected security device. To transfer money between bank accounts at the same banks, the payment will be received in a few hours; to transfer money between bank accounts at the different banks, the payment may be received on the next day.

NOTES: Transfer amount should take into consideration.

Paycheque

Some small companies are still using cheques to pay wages through bank transfer, for example, small traditional company that lacks technical knowledge. There are people who suspect that paycheque is a way to evade taxes or provide MPF, however, it is not true. Mandatory Provident Fund Schemes Authority and Inland Revenue Department accept paycheque, so it is legal and will not be the grey zone of law. And it turns out that paycheque is safer for a large amount of transfer than online transfer. Transaction in paycheque needs one to two workdays to finish and become the available balance; otherwise, it shows as the ledger balance after the deposit.

In recent years, people have more convenience from having electronic cheque(e-Cheque) available for online financial management. A large amount of transaction can be done without requiring other bank accounts. E-Cheque is in encrypted PDF format, and once the recipient uploads the file in Internet Banking, the transaction is finished.

In general, an automatic transfer is suitable for those who are familiar with Internet Banking and have no time for trivia while those who would like to do everything on their own and there are not many employees in the company, then a cheque is a good choice. It seems easy to pay wages, but it is still like a fussy admin work. Try e-Cheque next time, for your large-sum transaction!