When a domestic helper's employment ends, Hong Kong law sometimes adds a statutory lump sum on top of wages, notice money and leave pay. There are two of them — severance payment (SP) and long service payment (LSP) — and they confuse employers endlessly because they share one formula but have completely different triggers. Here is the whole picture.
One formula for both
The amount is identical for SP and LSP:
⅔ × last full month's wages × years of service (pro-rata for incomplete years)
The law caps the monthly wage used in the formula at HK$22,500 and the total payment at HK$390,000 — ceilings that matter for office workers but rarely for helpers. On a HK$5,100 salary, a completed 2-year contract works out to ⅔ × 5,100 × 2 = HK$6,800.
Severance payment — the redundancy money
SP compensates a helper whose job disappears. It requires at least 24 months of continuous service, and is due when:
- the helper is dismissed by reason of redundancy — the family genuinely no longer needs a helper (emigrating, children grown, moving in with relatives), or
- a fixed-term contract expires and is not renewed because the helper is no longer needed.
The second bullet is the one employers miss: a standard 2-year FDH contract is a fixed-term contract, so simply letting it lapse without renewal — because you no longer need a helper — triggers severance for the 2 years served.
Long service payment — the loyalty money
LSP rewards long service where the ending was not the helper's fault. It requires at least 5 years of continuous service (with the same employer — renewals count), and is due when:
- the helper is dismissed for a reason that is neither redundancy nor serious misconduct,
- the contract is not renewed for a non-redundancy reason,
- the helper resigns on certified health grounds or at age 65 or over, or
- the helper dies in service.
Never both — and often neither
SP and LSP are mutually exclusive: a termination qualifies for one, the other, or neither. Common “neither” cases:
- The helper resigns (except health / 65+ with 5 years).
- Summary dismissal for serious misconduct that actually holds up.
- Dismissal before 24 months of service — too short for either sum.
- The employer offers to renew on the same terms at least 7 days before expiry and the helper unreasonably refuses — this defence defeats both SP and LSP.
Note for helpers: unlike office workers, FDHs are exempt from MPF, so the old practice of offsetting these payments against MPF balances never applies — the lump sum is paid in full, in cash.
Deadlines with teeth
- LSP — due within 7 days of termination, like the rest of the final payment. Late payment is an offence.
- SP — the helper should serve a written claim within 3 months of dismissal; the employer must pay within 2 months of the claim.
Work out your exact figure
The HelperDoc termination cost calculator applies this whole eligibility table for you: pick the way the contract is ending (resignation, dismissal, redundancy, non-renewal, health, death in service) and it decides SP / LSP / neither, computes the ⅔ formula with caps, and adds it to the rest of the settlement — notice money, leave pay, statutory holidays, return flight and the daily food and travel allowance.