The HKSAR Government has launched a new round of 2022 Employment Support Scheme (“ESS 2022”) to provide wage subsidies with the intention of enabling employers to retain their current employees or employ more staff when the economic situation revives as soon as the epidemic situation permits. The ESS 2022 will focus more on supporting small and medium enterprises. Eligible employers will receive up to HK$8,000 wage subsidies per month for each eligible employee for a period of three months, while eligible self-employed persons can also apply for a one-off subsidy.

It is expected that the ESS 2022 will help businesses restore their confidence to rebound from the pandemic and increase job opportunities as the local epidemic situation eases in conjunction with the relaxation of social distancing measures and the recent handing out of a new round of consumption vouchers.

 

Application period

The ESS 2022 is open for online application from 29 April 2022 (8:00 am) to 12 May 2022 (11:59 pm).

 

Subsidy period

May, June, and July 2022 (3 months).

 

Eligibility for ESS 2022 

Employer

Self-employed person

Should apply in the capacity of a company/ corporation/ organisation/ natural person; Is not an employer listed in Part I of Exclusion List (see list); Must have participated in MPF Schemes or set up ORSO Schemes on or before 31 December 2021; Has not been involved in winding up, deregistration or striking-off process, or has not become dormant; and Has fully settled all clawback/penalty of 2020 Employment Support Scheme (if any) on or before 10 May 2022.

Should apply in an individual capacity as a self-employed person; Must have successfully created an MPF “self-employed person” account (MPF SEP account) on or before 31 December 2021, and have not terminated the account at the time of application; and If an eligible self-employed person has more than one MPF SEP account, only one application can be submitted.

 

Application procedures

• Only online application is accepted.
• Applicants should duly complete and submit the online application forms and upload the necessary documents (regardless of whether an application for the 2020 ESS was made before).
• Employer applicants with applications approved in the 2020 ESS are required to submit applications by using their 2020 ESS application number and business registration number.
• Only applications successfully submitted online will be processed. A confirmation email and SMS will be sent to the applicant to acknowledge receipt of his/her application.

 

Subsidized quota and maximum subsidy amount

Subsidized quota is divided into 3 categories. The amount of subsidy is calculated based on the monthly wage of applicants’ records in the “reference month”:

	Monthly wage in "reference month"	Monthly subsidy amount (for each employee)
Full subsidy quota	HK$8,000 or more	HK$8,000
Half subsidy quota	At least HK$3,000 but less than HK$8,000	HK$4,000
Elderly subsidy quota	Employees aged 65 or above with less than HK$3,000	HK$4,000

 

Sector-specific cap

	Maximum number of employees eligible for subsidies in each subsidy month
If employer applicants’ declared core business belongs to sectors in the Restricted List	100 (applicants can only apply for a maximum of 100 subsidized headcounts)
Other applicants	1,000 (applicants can only apply for a maximum of 1,000 subsidized headcounts even if they have over 1,000 employees)

 

Subsidy disbursement arrangements 

The employers’ wage subsidies will be paid in four tranches. Applicants will be notified of their application results via SMS and email. If approved, the subsidy will be credited to the applicant’s bank account listed in the application form.

1st tranche	100% of subsidies of May 2022
2nd tranche	100% of subsidies of June 2022
3rd tranche	70% of subsidies of July 2022
4th tranche	30% of subsidies of July 2022 after deducting subsidies to be returned to the Government and penalties to be paid

 

Employers’ undertaking and penalty 

In each subsidy month, applicants shall undertake to:

• Employ sufficient number of employees;
• Spend all the wage subsidies received for that month during the subsidy period on paying wages to employees in the same month.

The Secretariat and the government-appointed agent may conduct further reviews and randomly verify the information submitted by employer applicants, and conduct on-site audits at the employer organization during and after the vetting process of an application.

If applicants fail to fully fulfil the above undertaking in any month within the subsidy period, apart from returning the relevant subsidy amount, they are also liable to a penalty equivalent to 10% of the subsidy amount to be returned.

 

Subsidy for self-employed persons

Eligible self-employed persons will be granted a one-off subsidy of HK$8,000.

For more information about the ESS 2022, please visit the website of the HKSAR Government 2022 ESS website.

For further enquiries, please feel free to contact your usual PKF tax executives, or reach out to our Tax Partner Henry Fung (henryfung@pkf-hk.com) or Tax Manager Jeffrey Lau (jeffreylau@pkf-hk.com).

 

 

IMPORTANT NOTE: The information contained in this article is only for general information and is not intended to address the circumstances of any particular entities or individuals. Accordingly, this article does not constitute accounting, tax, legal, investment, consulting, or other professional advice or services. No action should be taken solely on the basis of the contents of this article which only contain a brief outline of the relevant laws. Before taking any action, please ensure that you obtain advice specific to your circumstances from your usual PKF tax partners or other advisers. We accept no responsibility or liability to any persons choosing to take action or implement business plans or activities solely or partially based on this article