Hong Kong Employment Termination Settlement Agreement

Streamline Employment Termination with Hong Kong-Compliant Settlement Agreements

Employment termination in Hong Kong requires careful attention to the Employment Ordinance, MPF regulations, and proper documentation. This Hong Kong Employment Termination Settlement Agreement template helps HR professionals, legal teams, and business owners handle redundancies, resignations, and mutual separations with clarity and compliance.

Built for Hong Kong Employment Law

This form template automates the complex calculations required under Hong Kong law, including payment in lieu of notice (PILON) based on contractual notice periods, severance pay calculations for employees with at least two years of service, and pro-rated annual leave entitlements. The form captures all essential details—from employee particulars and employment dates to final payment breakdowns—ensuring nothing is missed during what can be a sensitive process.

Automated Calculations That Save Time

Instead of manually computing payments using spreadsheets or calculators, this template uses Paperform's calculation engine to work out PILON, severance pay (capped at HK$22,500 per year of service), outstanding salary, annual leave payments, and any other entitlements. The calculations update in real-time as you enter employment details, reducing errors and speeding up the settlement process. You can also customize the form to handle different termination scenarios—redundancy, mutual agreement, or resignation with negotiated terms.

Mutual Release and Clear Documentation

The form includes mutual release clauses where both parties acknowledge full and final settlement of all claims, protecting your organization from future disputes. It also covers confidentiality, return of company property, post-employment obligations, and MPF arrangements, creating a comprehensive record that satisfies both legal requirements and good HR practice.

Automate What Comes Next with Stepper

Once the form is submitted, you can use Stepper to automate the entire offboarding workflow. Trigger eSignature requests via Papersign to get the agreement legally executed, notify payroll to process final payments, update your HRIS, archive documents in your company drive, and send reminders about MPF transfers and tax clearances. This end-to-end automation ensures terminations are handled consistently, compliantly, and professionally.

Who This Template is For

This template is designed for HR managers, operations managers, legal teams, and business owners in Hong Kong who need to document employment terminations clearly and comply with local regulations. Whether you're managing a small team or overseeing multiple terminations during restructuring, this form gives you a standardized, professional process that protects both employer and employee.

Paperform is trusted by over 500K teams worldwide and is SOC2 Type II & GDPR compliant, giving you confidence that sensitive employment data is handled securely. Create clear, compliant termination agreements without the need for expensive legal drafting every time.