Filing the Hong Kong Employer's Return is an annual compliance ritual that HR and finance teams cannot afford to miss. For the 2025/2026 assessment year, the Inland Revenue Department (IRD) issued Form BIR56A on April 1, 2026. Employers have exactly one month to submit their declarations, making the effective deadline May 4, 2026, due to the Labour Day public holiday.
However, 2026 brings more than just routine tax filings. The Mandatory Provident Fund Schemes Authority (MPFA) has proposed significant reforms, including a 33% increase in the maximum MPF contribution cap and a strict new two-tier surcharge mechanism for late payments.
This guide breaks down exactly what employers need to know to file Form BIR56A correctly and prepare their payroll systems for the upcoming MPF changes.
The Employer's Return is a mandatory annual disclosure to the Hong Kong government detailing the remuneration paid to employees during the tax year, which runs from April 1 to March 31. The submission consists of two primary documents:
Employers must file these forms for all full-time and part-time staff, pensioners, and even employees stationed overseas who receive remuneration from the Hong Kong entity. Crucially, if a company has zero employees to report for the year, they are still legally required to submit Form BIR56A with the "NO" box ticked. Ignoring the form entirely can trigger compliance penalties.
When completing Form IR56B, employers must report all forms of taxable income. This extends far beyond basic monthly salaries. The IRD requires the declaration of bonuses, gratuities, holiday journey benefits, back pay, termination payments, and gains from share options.
Housing benefits require special attention. If an employer provides housing, the IRD calculates a "rental value" based on a percentage of the employee's other income, unless the actual rent paid is higher. Payroll records must clearly distinguish between these different income categories to ensure accurate tax assessments.
Missing IRD deadlines can result in fines and increased scrutiny. Below are the critical dates employers must track for the 2025/2026 assessment year:
| Form | Purpose | 2026 Deadline |
|---|---|---|
| BIR56A + IR56B | Annual Employer's Return | May 4, 2026 (extended from May 1 due to public holiday) |
| IR56E | New employment notification | Within 3 months of the hire date |
| IR56F | Cessation of employment | 1 month before the last working day |
| IR56G | Employee leaving Hong Kong | 1 month before departure date |
Employers who require additional time to file the annual return can apply for an extension in writing. The request must include the employer's file number, company name, the reasons for the delay, and the specific extension period requested. However, the IRD does not guarantee approval, so early application is highly recommended.
The IRD strongly encourages employers to file electronically via the eTAX platform, which reduces errors and streamlines the process. Employers can choose between the Business Tax Portal (BTP) for corporations and partnerships, or the Individual Tax Portal (ITP) for sole proprietors.
For companies with large workforces, the IRD allows the submission of data files containing up to 5,000 sets of IR56 records. Payroll teams can use the IR56 Forms Preparation Tool or pre-approved self-developed software to generate these files.
While paper filing remains an option, it comes with strict rules. Forms must be printed on white A4 paper, and both the BIR56A and every IR56B must bear the original signature of the same authorized person. The IRD explicitly rejects photocopies, scanned documents, and faxed copies.
While the Employer's Return is an annual routine, the MPF landscape in 2026 is undergoing significant shifts that will directly impact payroll calculations and compliance risks.
Currently, mandatory MPF contributions are set at 5% of an employee's relevant income for both the employer and the employee, capped at a maximum relevant income of HK$30,000 per month. This limits the maximum monthly contribution to HK$1,500 for each party.
In late March 2026, proposals advanced to raise the maximum relevant income threshold to HK$40,000 [2]. If approved, the maximum mandatory contribution will jump to HK$2,000 per month. This 33% increase is designed to match the rising cost of living in Hong Kong and is expected to affect approximately 78,000 employees. Employers must ensure their payroll systems are updated to handle this new cap once it takes effect.
Late MPF contributions are a persistent issue in Hong Kong. The MPFA currently issues over 30,000 payment notices each month to defaulting employers, yet only one in six bosses settles their arrears promptly.
To combat this, MPFA Chairman Alice Lau announced a proposed two-tier surcharge mechanism on March 29, 2026. Under the current system, late payments incur a flat 5% surcharge. The new mechanism will introduce a second-level penalty for employers who fail to settle their arrears after receiving a payment notice. This aggressive enforcement strategy means that manual payroll errors or missed deadlines will become significantly more expensive in 2026.
With the impending MPF cap increases, the introduction of two-tier surcharges, and the strict formatting rules of the BIR56A filing, managing Hong Kong payroll via spreadsheets is no longer viable.
Modern HR and payroll systems like HR Forte are built specifically for Asia's complex compliance landscape. HR Forte automates the generation of IR56B forms in the exact format required by the IRD, calculates MPF contributions dynamically based on the latest statutory caps, and flags upcoming deadlines to ensure zero late payments.
As the MPFA tightens its grip on compliance, upgrading to an automated, compliance-first payroll system is the most effective way to protect your business from unnecessary surcharges and IRD scrutiny.
A: The deadline to file the Hong Kong Employer's Return (Form BIR56A and IR56B) for the 2025/2026 assessment year is May 4, 2026. The usual May 1 deadline was extended due to the Labour Day public holiday.
A: Yes. Even if your Hong Kong company has zero employees or no payroll to report for the tax year, you are legally required to submit Form BIR56A to the Inland Revenue Department (IRD) with the "NO" box ticked.
A: The Mandatory Provident Fund Schemes Authority (MPFA) has proposed increasing the maximum relevant income threshold from HK$30,000 to HK$40,000 per month. This would raise the maximum mandatory MPF contribution from HK$1,500 to HK$2,000 per month for both employers and employees.
A: Currently, late MPF payments incur a flat 5% surcharge. However, the MPFA has proposed a new two-tier surcharge mechanism for 2026, which will introduce a second, higher penalty tier for employers who fail to settle arrears after receiving an initial payment notice.
Filing BIR56A manually and tracking changing MPF caps is a recipe for costly penalties. HR Forte is the only compliance-first payroll SaaS built specifically for Asia. Powered by AskGenie AI, our system automatically generates IRD-compliant tax forms, dynamically updates statutory contribution caps, and ensures your payroll is 100% accurate every single month.
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