What is Hong Kong 713 Ordinance?

JustLogin’s payroll is fully enhanced to follow Hong Kong’s 713 Ordinance. Details of this ordinance are below:

  • All employees covered by the Employment Ordinance are entitled to basic protection which includes payment of wages, restrictions on wages deductions and the granting of statutory holidays, etc.
  • Employees who are employed under a continuous contract are further entitled to benefits such as rest days, paid annual leave, sickness allowance, severance payment and long service payment, etc.

Note: ADW calculation is only applicable for continuous contract employee

* Continuous contract - An employee who has been employed continuously by the same employer for four weeks or more, with at least 18 hours worked in each week is regarded as being employed under a continuous contract.

A video guide regarding HK713 is available through this link: HK713 Ordinance Video Guide

Pay Element/Statutory Entitlement

Pay elements that require ADW:

  • Holiday Pay
  • Annual Leave Pay
  • Paid Sick Leave Allowance
  • Maternity/ Paternity Allowance
  • Bonus
  • Payment in Lieu of Notice
  • Severance/ Long Service Payment

Average Daily Wage

  • Regarded wage
    Regarded wage = Total wage – disregarded wage

  • No. of days in preceding 12-month period
    Note: value is generally 365 days
    Note: Preceding 12-month period
    (Eg. Calculate for holiday in Sep 2020, 12 months preceding, to be from Sep 2019-Aug 2020)

  • Disregarded days
    Note: To include periods of all disregarded wages

Average Daily Wage - Regarded wage


  • For all relevant pay elements, to select the regarded wage check box.



Regarded Wage/Period

Average Daily Wage- Disregarded days (period)

  • Disregarded period: Days in which employee is not paid his wages or his full wages.
  • Depending on payroll configuration setting for no pay or partially paid pay elements (eg. No pay holiday for first 3 month)
  • To keep track of the number of days for pay elements where disregarded period is relevant

Disregarded Wage/Period


  • Rest day:
    >Entitled to not less than 1 rest day in every period of seven days
    >Whether rest day is paid or not is to be agreed by employer and employee
    >Note: Affects basic salary daily rate
  • Statutory Holiday:
    >Paid Holiday entitled only after first 3 months of employment
    >Note: Thus first 3 month of employment, all Holiday are considered as disregarded
    >Daily rate for Paid Holiday = 100%ADW (regarded wage)
  • Annual Leave:
    >Daily rate for Paid Annual Leave =100%ADW (regarded wage)
  • Sickness Leave: (disregarded)
    >Paid Sickness Leave entitlement only for ≥ 4 consecutive days of leave taken (Exception)
    >Daily rate for Paid Sickness Leave = 80%ADW
    >Daily rate for No Pay Sickness Leave = 0
  • Maternity/Paternity Leave: (disregarded)
    >Daily rate for Paid Maternity/Paternity Leave = 80%ADW
  • Payment in Lieu of Notice:
    >Calculation of payment in Lieu of notice depends on agreed period of notice

Payroll impact - Rest Day

Pay Element:

  • Basic Salary

Pay element calculations:

  • Paid/unpaid rest day affects Basic Salary daily wage (Pay rate)
  • Note the number of no pay rest day as disregarded period (for ADW calculation)


Payroll impact- Holiday

Pay Element:

  • Holiday Pay
    Note: For HK, 12 statutory Holiday in a year

Legislation impact on Pay element:

  • For employee is in the first 3 month of service, no pay holiday
    Note: No pay holiday = 0
    (Regarded wage = 0)
  • Note the number of unpaid holidays as disregarded days (for ADW calculation)
    (During employee first 3 month of employment)


Payroll impact - Holiday

Legislation impact on Pay element:

  • For Employee with more than 3 months of employment,
    > Holiday Pay = 100%ADW
    > Regarded wage = 100%ADW
    > Note: For Statutory Holiday in which employee is required to work, employee to be given off-in lieu

Example Rest Day & Holiday


> Pay run for month of May 2020


> Employee Join Date = 1/1/2020

> Basic Salary = $5000

> Total number of days in the month = 30 days

> No. of Rest Day in the month = 12 days

> 3 Holiday in the month

Pay Slip details:

> Eg. Employee rest day is not paid

Calculation of Holiday Pay (ADW)

  • Eg. Calculating holiday pay for 1 January 2008

Payroll impact- Annual Leave Pay

Pay Element:

  • Annual Leave Pay

Legislation impact on Pay element:

  • Annual Leave Pay = 100%ADW
    > Regarded wage = 100%ADW
    > Note: Employee has sufficient paid Annual Leave


Calculation of Annual Leave Pay (ADW)

  • Eg. Calculating Annual Leave Allowance

Sickness Leave

Leave type:

  • Sick Leave

Pay element:

  • Paid Sick Leave Allowance
  • No pay Sick Leave Allowance

Legislation impact on Pay element:

After employee’s application of leave and leave item is processed, pay element will be generated accordingly, thus the amount of sickness allowance will be based on the generated pay element.

  • Process Leave items
    >Paid Sick Leave = 80%ADW
    >No Pay Sick leave = 0
  • Since both are not full wage amount, allowance is disregarded, regarded wage = 0
  • Note the number of sick leave taken = disregarded days (to be used for ADW calculation)

Sickness Leave

Example: Sickness Allowance

Calculation of Sickness Allowance (ADW)

  • Eg. Calculating Sickness Leave Allowance

Payroll impact- Maternity/Paternity Leave

Pay Element:

  • Maternity/Paternity Allowance

Legislation impact on Pay element:

  • Paid Maternity/ Paternity Allowance = 80%ADW
    > Note the number of Maternity/Paternity leave days taken as disregarded days
    > Note: Maternity/Paternity allowance is not full wage amount, thus allowance is disregarded, regarded wage = 0

Example: Maternity Allowance

Payment in Lieu of Notice

Calculation of payment in Lieu of Notice depends on the agreed period of notice as shown in contract. (no. of days/ months determined by contract)

For cases of eligibility, admin to add pay element and edit formula/calculation accordingly. (Manual entry)

Note: When keyword ADW is made available, the above will be catered for.


Calculation of Payment in Lieu of Notice (ADW)

•Eg. Calculating 1 month payment in lieu of notice

Pay Slip

  • Show relevant pay element for addition and deduction (current system)
  • Pay Rate of each pay element base on per unit multiply by number of unit (days) respectively
    > Note: For pay element where ADW is relevant,
    > Pay Rate = respective calculated ADW
    > Note: All other details in current pay slip to remain

Example: To do pay run for month of April 2020


> Employee join date = 1/1/2020

> Basic Salary = $5000

> Total number of days in the month = 30 days

> Fixed OT allowance of $500 per month

> 1 Holiday in the month

> 2 days paid Annual Leave taken

> Total no. of paid sick leave balance = 2 days

> Total no. of sick leave taken = 4 days

> 3 days Paternity Leave taken

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