When must I notify the IRD that I have hired a new employee (IR56E)?

Section 52(4) of the Inland Revenue Ordinance requires an employer to give the Inland Revenue Department (IRD), in writing and within 3 months of engagement, the particulars of any new employee who is likely to be chargeable to salaries tax. The IRD form for this is IR56E.

Practical steps

1. Complete IR56E with the employee's identity, start date, pay and benefits (including housing).
2. File it with the IRD within 3 months of commencement; electronic filing is available.
3. Give the employee a copy.
4. Record it in payroll so the annual IR56B at year-end is consistent.

Why it matters. The IRD uses these forms to open or update the employee's tax record. Skipping them is an offence for which the employer can be prosecuted; the maximum fine under section 80(1) for employer reporting offences is HK$10,000.

Related duties

• Annual employer's return (BIR56A with IR56B for each person).
• IR56F when employment is ending, and IR56G if an employee is leaving Hong Kong for good or for a substantial period.
• Keep payroll records for at least 7 years.

For a new company hiring its first staff, this notification and Mandatory Provident Fund (MPF) enrolment are often the first compliance tasks.