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Payroll In Macau

Macau’s Employment Act

Over the years, Macau has become one of the most business-friendly countries in the world. The country’s growing infrastructure connectivity, technological innovation, and industrial development through international co-operations contribute to its growth. 

Furthermore, Macau has a simple and low tax system, transparent regulatory bodies, and an efficient legal system to allow easy business setups. All these reasons and several other factors, such as Macau’s ever-growing GDP (29.223 billion USD in 2021), have compelled entrepreneurs from all over to expand here. 

While Macau does have a business-friendly environment, the Labor Relations Law in Macau has 97 articles in detail that govern employment in the country. Businesses must adhere to the labor regulations in Macau while hiring employees, failing which, they can be penalized with heavy fines. 

Read below the guide to Macau’s labor laws to get a comprehensive idea of the regulations operating in Macau. 

Who is Covered by the Employment Act?

The labor regulations in Macau apply to all employment relations in all fields of activity. The labor code in Macau covers both local and foreign employees. However, special legislation exists to govern the following categories of employees:

  • Part-time workers
  • Seafarers
  • Non-resident workers

Employment Contract

As per the labor code in Macau, three types of employment contracts exist in the country; fixed term, variable term, and indefinite contract. The duration cannot exceed two years for both fixed-term and variable-term contracts. Additionally, both cannot be renewed more than twice once the 2-year period is over. 

Parties can sign employment contracts verbally or in writing. However, in the case of variable-term contracts and contracts for minors, it is mandatory to provide them in writing. Employers must provide the following information

  • Identification and address of both parties
  • Term of contract
  • Place of work
  • Designation
  • Working hours and time
  • Name and work description of the replaced employee in situations where an absent employee needs to be replaced
  • Date of agreement
  • Signature of both parties

While employing a minor, the employer must submit the employment contract copy to the Labor Affairs Bureau within 15 days of its conclusion. The employee must submit a copy of a medical certificate proving the concerned minor’s physical and mental well-being. 

Key Provisions of the Act

A total of 97 articles in the Labor Relations Law in Macau govern all aspects of employment. The key provisions of Macau’s labor law are as follows:

Probation period

  • For employees with an indefinite contract, the probation period is 90 days. 
  • For fixed-term contract holders, the probationary period is 30 days. 
  • For employees holding leadership or management positions or whose job requires a high level of technical knowledge and special qualifications, the probation period is 108 days. 

Working hours

  • Macau’s working hours law caps working hours at 8 hours daily and 48 hours weekly.
  • Employees are entitled to at minimum 30 minutes of break after five consecutive work hours. 
  • Furthermore, employees should get at least 24 hours of uninterrupted rest each week. 

Overtime

  • Any additional work done over the regular working hours is overtime work as per Macau’s labor law.
  • For overtime work, an employee will receive an additional 50% of their salary if prior consent from the employee is absent. 
  • With the employee’s consent, the compensation rate for overtime work is an additional 20%. 

Public holidays

January 1

New Year’s Day

January 22- January 24

Lunar New Year

April 5

Cheng Ming Festival

May 1

Labor Day

September 30

The day after the Mid-Autumn Festival

October 1

National Day

October 23

Chong Yeong Festival

December 20

Macao SARE Day

Leave schemes

Annual leave

An employee in his second year is entitled to at least six paid annual leave days.
Employees working for less than a year but over three months will get three paid annual leave days.
Other justifiable leave of absence does not affect annual leave days. 

Sick leave

Employees who have completed the probation period are entitled to 6 days of paid sick leave each year. 

Maternity leave

As per Macau’s paid maternity leave law, a female employee is entitled to 70 days of paid maternity leave. 
Per the labor code in Macau, employer pays for the first 56 days. 
The Social insurance (FSS) pays for the next 14 days. 

Other absences

As per the labor code in Macau, employees can take various other justifiable absences. However, these absences are only remunerable if there is a written agreement.

  • The following are justifiable absences in Macau:
  • Three days for the death of a family member
  • Five days for paternity or adoption
  • Six days for marriage
  • 12 days for fathers if their wives die during childbirth
  • A maximum of 3 months due to pregnancy-related illnesses
  • A maximum of 12 days for providing urgent help or assistance to a family member

Taxes

The following progressive taxation applies to employed individuals in Macau: 

Income slab

Tax rate

Up to 144,000 MOP

0%

144,001 to 164,000 MOP

7%

164,001 to 184,000 MOP

8%

184,001 to 224,000 MOP

9%

224,001 to 304,000 MOP

10%

304,001 to 424,000 MOP

11%

Over 424,001 MOP

12%

For companies incorporated in Macau, profits over 300,000 MOP are taxable at 12%. 

Termination of employment 

Notice period

According to the labor act rules in Macau, the notice period duration depends on who initiates the employee termination. 

  • If an employer initiates an employee dismissal, the notice period is 15 days. 
  • If an employee initiates their dismissal, the notice period is seven days. 
  • No notice period applies when an employee’s dismissal is due to a just cause (such as unjustified absence from work, failure to perform duties, and so on).

Severance pay

According to Article 70 of Macau’s labor laws, if an employer does not provide a notice period for termination, the following severance pay may be applicable:

Compensation Amount

Length of Service

7 days of remuneration

Up to 1 year after the probationary period

10 days of remuneration per year of employment

1-3 years 

13 days of remuneration per year of employment

3-5 years 

15 days of remuneration per year of employment

5-7 years 

16 days of remuneration per year of employment

7-8 years 

17 days of remuneration per year of employment

8-9 years 

18 days of remuneration per year of employment

9-10 years 

20 days of remuneration per year of employment

More than 10 years 

Penalties

Chapter VII of the Labor Relations Law in Macau outlines the rules on penalties in case of violating the provisions mentioned in the labor regulations in Macau. The labor Affairs Bureau supervises compliance with the labor laws or the justified imposition of penalty in the case of violation. The following fines and penalties apply to employers per the labor regulations in Macau:

Payable fine

Non-compliance reason

20,000 to 50,000 MOP

Treating an employee or an applicant in a discriminatory manner

Failing to pay remuneration on time

Arranging pregnant female employees or employees who have given birth in the last three months to perform tasks not suitable for them

Violating the guarantees provided to employees as per Article 10 of the labor code in Macau

Employing minors without following due procedures as outlined by the labor law

10,000 to 25,000 MOP

Employ minors to perform domestic overtime, work from 9 pm to 7 am, at forbidden places, and in prohibited occupations per the labor act rules in Macau.

Breaching the rules regarding the form of payment of salary

Not paying an employee while they are on maternity leave.

Denying an employee’s right to rest

5,000 to 10,000 MOP

Not providing compensation for lack of notice period to an employee with a variable-term contract

Not paying benefits on time

Not correctly calculating an employee’s remuneration

Not arranging regular medical examinations for minor employee

Not doing proper verification while employing a minor

Not issuing certification to employees mentioning the list of the employees’ data stored by the company

Not providing a copy of the employment contract to the employee

Not paying employees while they are on leave 

Arranging obligatory overtime work

Not issuing a payslip

Arranging obligatory work on rest days and holidays

Changing an employee’s working schedule without their consent

1,000 to 5,000 MOP

Concluding a fixed-term contract without mentioning mandatory information

Issuing a payslip that lacks mandatory particulars

Not providing minors with the reports of their periodic health assessments

Not maintaining data records

If and when any penalty is issued following the labor code in Macau, the employer will pay the fine within 15 days. The fine is payable to Macau’s Social Security Fund Revenue. 

Compliance Strategies for Employers

Entrepreneurs must use the following strategies to ensure compliance with the labor code in Macau:

Following the Labor Relations Law: 

  • With 97 articles, Macau’s labor laws cover every aspect of employment and provide a reliable foundation for companies to build on. 
  • Companies can easily comply with local regulations by following the Labor Relations Law without errors. 

Sanctioning an HR team:

  • Employers can also hire a team of qualified HR personnel who understand and employ Macau’s labor laws while hiring and managing employees there. 

Partnering with an EOR: 

  • EOR firms specialize in hiring employees in foreign countries and, subsequently, managing them in compliance with local laws and regulations. 
  • Hence, employers can partner with an EOR to reduce legal liabilities and strictly adhere to the provisions of the labor act rules in Macau.

How Can Multiplier Help?

Since Macau’s labor laws are thorough and cover all aspects of employment, employers can miss out on any particular nitty-gritty of the laws. It is why foreign companies willing to establish themselves in Macau are reaching out to partner with EOR firms. It ensures companies can work with the best talent in Macau while fully complying with the government’s labor guidelines. 

If you want to start your business in Macau, contact us at Multiplier. We help entrepreneurs by providing automated payment contracts in multiple languages, helping nullify the risk of violating the labor code in Macau. Furthermore, our experts can help you expand in the country and hire top talent. 

To ensure smooth management of employees, payrolls, and so much more, contact us as soon as possible!

Frequently Asked Questions

According to the labor code in Macau, the minimum age to start working in Macau is 16 years.

The minimum wage in Macau is 6,656 MOP.

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