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Hiring in Macau (macao)
Macau, officially known as the Macao Special Administrative Region of the People's Republic of China (MSAR) is an autonomous Chinese special administrative region. It is a former Portuguese colony. Macanese Pataca is the official currency. Macau is a service based economy. Its economy relies on casino gambling and tourism. Main trading partners are Hong Kong, China, and Japan. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Macau’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. Labor Code stipulates that employees are entitled to 6 days of annual leave. Professional tax is payable by anyone receiving income from employment services performed in Macau or from a Macau employment. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Macau’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- The parties can agree on the probation period, which cannot exceed 90 days except in some specific positions such as managers (can be increased to 180 days) and fixed term contracts (reduced to 30 days).
Annual Leave
- A minimum of 6 working days of annual leave after one year of service.
Public Holidays
- New Year’s Day (1st January)
- Lunar New Year’s Eve (24th January)
- Lunar New Year Holiday (28th to 29th January)
- Cheng Ming Festival Holiday (6th April)
- The First Working Day After the Day Before Easter (13th April)
- National Day Holiday (5th October)
- Chung Yeung Festival Holiday (26th October)
- All Souls Day (2nd November)
- Feast of the Immaculate Conception (8th December)
- Macau Special Administrative Region Establishment Day (20th December)
- Dongzhi Festival (21st December)
- Christmas Eve (24th December)
- Christmas Day (25th December)
Maternity Leave
- According to article 54 of the Macau Labor Relations Law, female employees are entitled to, after childbirth, 56 days of maternity leave.
- Effective from 1st November 2020, Employer-paid maternity leave has been increased from 56 to 70 days, with the additional days initially being subsidized for a transitional period by the Social Security Fund (FSS).
Paternity Leave
- Male employees are entitled to a five-day employer-paid paternity leave
Sick Leave
- Employees are entitled to 6 days of sick leave
Work Hours
- The standard work week in Macau is eight hours a day, or forty-eight hours per week.
Overtime
- Employee-consented overtime is paid at a rate of 120% of the base pay while forced overtime is paid at a rate of 150% of the base pay.
Notice Period
- Dismissal without cause is subject to a minimum notice of 15 days (contracts may impose longer periods), or payment to the employee in lieu of notice.
- For the dismissal with cause to be valid, the employer must set out in writing to the employee the reasons for dismissal with cause within 30 days of becoming aware of the said cause.
Severance
- Employees dismissed without cause are entitled to a redundancy compensation based on the number of years of service (up to a maximum amount of MOP240,000).
13th / 14th Month Pay
- Yes
- There seems to be a statutory requirement to pay the 13th month salary, this is paid at the end of the year.
income tax
- Generally, professional tax is payable by anyone receiving income from employment services performed in Macau or from a Macau employment, irrespective of the following:
-
- Where the income was received.
- The number of days spent in Macau and where the services were performed.
- Whether the recipient is a resident or not.
- Whether the recipient is paid in money or in kind. Where income other than cash is received, the Macau Finance Bureau (MFB) may assess the value of benefits so received.
- Earnings of self-employed persons are also subject to professional tax.
- For the tax year 2020, the professional tax rates are progressive and cumulative up to a maximum rate of 12%.
- Foreign freelancers and artists engaged by Macau entities without valid work visas are taxed at the higher of 5% on taxable income and the tax amount arrived by applying the progressive tax rate table on taxable income.
|
Assessable income (MOP) |
Marginal cumulative tax liability (MOP) |
Each range (%) |
|
|
Over |
Not over |
||
|
0 |
144,000 |
0 |
0 |
|
144,000 |
164,000 |
1,400 |
7 |
|
164,000 |
184,000 |
3,000 |
8 |
|
184,000 |
224,000 |
6,600 |
9 |
|
224,000 |
304,000 |
14,600 |
10 |
|
304,000 |
424,000 |
27,800 |
11 |
|
424,000 |
And above |
- |
12 |
deductible expenses
Standard Deduction
- A standard deduction of 25% of taxable income is available for both self-employed individuals and salaried employees.
Personal Allowances or subsidies
- According to the Budget for the financial year 2020, which has already been approved by the Legislative Assembly, the personal allowance is MOP 144,000 per annum or MOP 12,000 per month (previously, MOP 95,000 per annum or MOP 7,916 per month) for income derived in the tax year 2020.
- The personal allowance for employees over the age of 65 or proved to be 60% disabled or above is further increased to MOP 198,000.
- Medical claims for medical/hospital expenses incurred by the employee and/or family members with relevant supporting documents.
- The following allowances are non-taxable, up to the prescribed limits, provided that such allowances have also been included as remuneration items in the employees’ employment contracts:
-
- Family allowance (spouse and parent, children aged 18 or under, and children aged above 18 but with proof of student status: MOP 880/month.
- Marriage allowance: MOP 3,960.
- Birth allowance: MOP 5,280.
- Housing allowance: MOP 3,520/month.
- Rental allowance, applicable when a stamped tenancy agreement is produced: Ranging from MOP 3,500/month to MOP 12,000/month, depending on the size of the rented property.
- Death allowance: Six times the basic salary.
- Funeral allowance: MOP 4,840.
- Transportation of remains allowance: Ranging from MOP 62,410 to MOP 265,580, depending on the location.
- Safety allowance in compensation for hardship and unsafe conditions (e.g. police, guards): The maximum amount is MOP 30,000 per annum.
- Reimbursed entertainment and travel expenses with supporting receipts.
- Reimbursed transportation expenses, daily allowance, and travel allowance for business trips, up to the limit of those applying to civil servants, with supporting receipts.
- Compensation for termination of employment within the statutory limit, provided that the employment relationship will not be reinstated within the next 12 months.
- Compensation in lieu of mandatory holidays or benefits in accordance with the Macau Labor Law due to certain rights forfeited by the employees.
- Allowance for error transactions (e.g. cashiers, tellers): The maximum limit is 12% on gross employment income in cash and in kind.
Business Deductions
- Business deductions are applicable only to self-employed individuals (i.e. business or professional income) whose income is taxed under the professional tax regulation.
- For salaried employees, there is no provision in the tax regulation for business deductions.
|
Deductible Expenses |
|
|
Standard Deduction |
|
|
Personal Allowances |
|
|
Business Deductions |
|
immigration
- Before a Non-resident Worker’s Identification Card (blue card) is granted by the Immigration Department, a work permit must be obtained from the Macau Labor Affairs Bureau (Direcção dos Serviços para os Assuntos Laborais, or DSAL), the government authority that handles the employment of foreign nationals and local workers.
- Before a work permit application is made to the DSAL, the employer must register the vacant position with the employment section of the DSAL and must indicate the identity of the employer, title of the position, remuneration, working hours, and qualifications and experience required.
- Vacancy order forms are available in the DSAL’s employment section.
- An employer that is unable to find a local employee with comparable experience and qualifications to fill a vacancy may apply for a work permit to bring in a qualified nonresident.
- The employer must prove that the DSAL was notified of the vacant position and was unable to provide a prospective employee.
- To obtain work permits from the DSAL for their foreign employees, employers must generally submit the following documents to the DSAL:
- A prescribed application form completed in full with details of the employer, reason for employing the foreign national, and number and positions of existing resident and nonresident employees
-
- Photocopy of the employer’s commercial registration document from the Identification Services Bureau and photocopy of the legal representative’s identity card
- Photocopies of the employer’s business license, industrial registration or equivalent registration document, and business tax payment record
- Evidence of the employer’s contribution to the Social Security Fund
- Photocopy of proof for local recruitment from the DSAL
- Photocopy of the foreign employee’s passport or other travel document
- Evidence of the foreign employee’s qualification and experience
- If an application is approved by the DSAL, a letter of approval is issued to the applicant for submission to the Immigration Department to process the foreign employee’s blue card.
- A foreign national may not undertake employment in Macau until a blue card application is submitted.
- The work permit and blue card are normally granted for employment with a specific employer.
- Work permits are normally granted for a maximum period of two years and are renewable by the DSAL.
- The application form for the renewal of a work permit, together with other required documents, must be submitted to the DSAL three months before the expiration date of the work permit.
- The applicant must also apply for renewal of a blue card from the Immigration Department when the work permit is renewed by the DSAL.
- Foreigners who enter Macau to set up their own businesses are also required to obtain a work permit to work in Macau.
- They must follow the procedures for recruiting nonresident skilled workers and submit the following documents:
- Copy of the applicant’s identification document
- Copy of the latest Business Tax Registration or Declaration of Start/Alteration of Activity Form M/1
- Proof of the activities performed by the applicant, such as academic certificates or work reference letters
- Proof of applicant’s economic capacity in Macau
- Copy of the contributions to the Social Security Fund
- Personal information of recruited local workers, including positions, remuneration and identity documents
- The government’s policy is to encourage people of financial standing, who will make substantial investment in the territory, to become residents of Macau.
- To qualify, an applicant must demonstrate his or her financial ability to invest significantly in an enterprise in Macau.
- Management and/or technical personnel employed or likely employed by a Macau-registered company with qualifications and professional experience that contribute to Macau’s economy may also be granted a residence permit on application.
- The temporary residence permit is normally granted for an initial period of three years, depending on the validity of the applicant’s travel document.
- A residence permit expires 30 days before the expiration of an applicant’s travel document.
- In general, a temporary residence permit holder may, after seven years of continuous residence in Macau, apply for permanent residence status.
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Work Permit (Employment) |
|
2 years (renewable) |
|
|
Work Permit (Self-employed) |
|
2 years (renewable) |
|
|
Temporary Residence Permit |
|
3 years (renewable) |
|
value added tax
- There is no VAT regime in Macau.
- Consumption tax is imposed only on tobacco and spirits entering into Macau.
withholding tax
- There is no withholding tax on dividends, interest, royalties or technical service fees in Macau
termination
- Employees can terminate their contracts at will at any time. This is provided they have given a minimum of seven days’ prior notice (longer periods can be imposed under the contract) or payment to the employer in lieu of notice.
- Under Law 7/2008 there is a distinction between dismissal by the employer with cause and dismissal without cause:
-
- Dismissal without cause is subject to a minimum notice of 15 days (contracts may impose longer periods), or payment to the employee in lieu of notice.
- Employees dismissed without cause are entitled to a redundancy compensation based on the number of years of service (up to a maximum amount of MOP240,000).
- Dismissal with cause is immediate and does not entitle the employee to any compensation.
- For the dismissal with cause to be valid, the employer must set out in writing to the employee the reasons for dismissal with cause within 30 days of becoming aware of the said cause.
- Reasons for dismissal with cause include:
- Willful disobedience of orders.
- Repeated lack of commitment in fulfilling duties.
- Chronic lateness, leaving early or abandoning work during the working hours without authorization.
- Unjustified absences from work and false statements regarding the justification of absences.
- Abnormal reduced productivity intentionally caused by the employee.
- Repeated provocation of disputes with other employees.
- Acts of physical violence, insult or other abuse.
- Severe harm to the company's interests.
- Violation of regulations on occupational hygiene and safety.
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, and severance pay
- Statutory benefits also include social security benefits
|
Statutory Benefits |
|
Probationary Period |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Paternity Leave |
|
Sick Leave |
|
Overtime Pay |
|
Notice Period |
|
Severance Pay |
|
Social Security Benefits |
payments and invoicing
- The Macau tax year is the calendar year.
- In Macau, the professional tax reporting, withholding, and remittance obligations rest with the employer.
- The quarterly professional tax return is due on 15 of January, April, July, and October of each year.
- The annual professional tax return (namely 'M3/M4') is due by the end of February of the following year.
- Husbands and wives are taxed separately in Macau.
- There is a pay-as-you-earn (PAYE) system, similar to those used in other countries, which is applicable to salaried individuals only.
- The employer is obligated to report and collect the amount of professional tax payable from its employees each month and remit such payments to the MFB before the 15th day of the month following the quarter-end for local resident employees and foreign employees with valid work visas.
employee accruals
| Christmas Bonus% |
Based on one month bonus (generally treated part of the basic remuneration) |
| Christmas Bonus Over Vacations % |
0% |
| Severance per Year % |
Employees are entitled to severance pay that equals to 1 week of pay after one year of service (1.37% of annual salary) |
| Vacations % | A minimum of 6 working days of annual leave after one year of service (1.64% of annual salary) |
| Notice % |
Employees are entitled to 15 days of notice period for one year of service or more (4.12%) |
| Christmas Bonus Over Notifications% | 0% |
| Vacations Plus% | 0% |
| Total percentage of Salary (yearly) | The total employment accruals as a percentage of salary per anum are equal to 15.46% |
employer accruals
Additional information (Country Accruals)
| Social security | 60 |
| Description |
Apart from professional and complementary taxes, there is also a social security fund contribution. A total contribution of MOP 90 per |
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | A minimum of 6 working days of annual leave after one year of service. | This equals 1.64% (6/365 days) of annual income |
| Maternity Leave | According to article 54 of the Macau Labor Relations Law, female employees are entitled to, after childbirth, 56 days of maternity leave. Effective from 1st November 2020, Employer-paid maternity leave has been increased from 56 to 70 days, with the additional days initially being subsidized for a transitional period by the Social Security Fund (FSS). |
This equals 19.2% (70/365 days) of annual income |
| Paternity Leave | Male employees are entitled to a five-day employer-paid paternity leave | This equals 1.36% (5/365 days) of annual income |
| Sick Leave | Employees are entitled to 6 days of sick leave | This equals 1.64% (6/365 days) of annual income |
| Overtime | Employee-consented overtime is paid at a rate of 120% of the base pay while forced overtime is paid at a rate of 150% of the base pay. | Depends on the number of overtime hours worked |
| Severance | Employees dismissed without cause are entitled to a redundancy compensation based on the number of years of service (up to a maximum amount of MOP240,000). | Subjective |
| Social Security | A total contribution of MOP 90 per month is payable for resident employees. The employer contributes two-thirds of the amount (i.e. MOP 60) and the employee contributes one-third of the amount (i.e. MOP 30). |
This equals 720 MOP per anum |
