Garden Leave Hong Kong 2027: Your Pay, Rights & Next Job

Garden leave in Hong Kong is when your employer tells you to stay away from work for some or all of your notice period while still paying your full salary and benefits. The Employment Ordinance doesn't mention garden leave: it comes from your contract, so the clause in your contract decides when it can be used. You remain an employee throughout, so your salary, MPF contributions and work visa continue, and you cannot start a new job until the notice period ends. In finance, notice periods of 3 or 6 months are common for senior and front-office staff, and garden leave often covers most of that time.

This guide covers how garden leave works in Hong Kong, how it differs from payment in lieu of notice, your pay, leave, tax, visa and SFC licence position, and how to negotiate it down. For the wider rules on ending employment, see our guide to dismissal and termination rights in Hong Kong.

What Is Garden Leave in Hong Kong?

Garden leave is a period, usually during your notice, when you're still employed and paid but told not to come to the office, contact clients or do any work. The name comes from the idea that you spend it in the garden.

Employers use it to keep you away from clients, deals and confidential information before you join a competitor. Lewis Silkin's December 2025 analysis of Hong Kong practice describes it as a form of administrative leave used after either side has given notice, with full pay and benefits continuing and the employee still bound by their contractual duties apart from actually working.

It can follow your resignation or the employer's notice to you. Either way, the employment contract is still alive until the last day of notice.

If you're about to move and want to line up your next role now, browse English-speaking jobs in Hong Kong on ExpatJobBoard. Most employers here are used to waiting out a notice period.

Is Garden Leave Legal in Hong Kong?

Yes, if your contract allows it. The Employment Ordinance sets minimum notice periods and lets either side pay wages in lieu of notice, but it says nothing about garden leave. The legal basis is the contract.

The Legal 500 2026 Hong Kong employment guide makes the key point: with an express garden leave clause, the employer can require you not to attend work as long as full salary and benefits continue. Without one, employees generally have a right to work during notice, so an employer can't normally keep you out unless the contract permits it.

In practice, garden leave without a clause is rarely challenged, especially for short notice periods. This guide doesn't rely on any specific court decision, so if you have a large bonus or a long notice period at stake, get advice from an employment lawyer on your specific contract.

What the Employment Ordinance does say about notice

The Labour Department's guide to the Employment Ordinance sets the minimum notice for a continuous contract:

Source: Labour Department, A Concise Guide to the Employment Ordinance (December 2025).

Your contract can set a longer period, and in banking, asset management and law it usually does. Garden leave can only run as long as your notice period, not beyond it.

Garden Leave vs Payment in Lieu of Notice (PILON)

Garden leave keeps you employed until the end of notice. Payment in lieu of notice (PILON) ends your employment immediately and pays you the notice period as a lump sum.

PILON is in the Employment Ordinance: under sections 6 and 7, either party can end a continuous contract by giving notice or by paying wages in lieu. The Labour Department's guide says PILON is calculated from your average monthly (or daily) wages over the previous 12 months, multiplied by the notice period. It also says that if an employer asks you to leave before your notice runs out, it must pay wages in lieu for the rest of the period.

Source: Labour Department; MPFA; Inland Revenue Department, 2026.

Which is better for you? PILON almost always is, because you're free to start your new job and get paid twice for the overlap. Employers choose garden leave precisely to stop that.

Are You Paid in Full on Garden Leave?

Yes. Garden leave means you get your full contractual pay and benefits as if you were working. That includes:

• Base salary: Paid on the normal payday.
• Allowances: Housing, transport and other fixed allowances in your contract.
• Medical and life insurance: Your cover should continue. Check your dependants are still on the policy.
• MPF: Your employer keeps contributing 5 per cent of relevant income and deducting your 5 per cent, capped at HK$1,500 each a month above HK$30,000, according to the MPFA.
• Stock vesting: Usually continues to vest until your last day, subject to the plan rules.

What about your bonus?

This is where most garden leave disputes happen. A discretionary bonus usually depends on the plan rules, and many banks pay only to staff who are employed and not under notice on the payment date. If your garden leave runs past bonus day, read the bonus clause before you resign.

A guaranteed 13th-month or double pay is different. The Labour Department's guide says an end of year payment is presumed not to be discretionary for contracts made after 27 June 1997 unless a written term clearly says otherwise. Pro rata payment needs at least 3 months' service in the payment period, and the guide lists continuing employment or dismissal (other than summary dismissal) as the routes to it, not resignation. Our guide to double pay and bonuses covers the rules in detail.

Can You Take Annual Leave During Garden Leave?

It depends who gave notice. The Labour Department says statutory annual leave shall not be included in the notice needed to end a contract. But the Court of Final Appeal has said that restriction doesn't apply when the employee resigns, so a resigning employee has the right to choose to take statutory annual leave during notice.

In practice:

• If your employer gave notice: It can't count your statutory annual leave towards the notice period. Untaken leave must be paid out.
• If you resigned: You can choose to take annual leave during notice. Many employers will ask you to use up leave during garden leave instead of paying it out; check what your contract says.
• On termination: You are entitled to payment for annual leave not yet taken, calculated on your average daily wages over the last 12 months.

Payment for untaken leave and other final pay is due within 7 days of your last day, according to the Labour Department.

Can You Start a New Job During Garden Leave?

No. You are still employed by your current employer until the last day of notice, and your contract almost certainly bars you from working for anyone else, especially a competitor. Breaking that can let your employer seek an injunction and claw back pay or deferred bonus.

What you can do:

• Sign your new contract: Accepting an offer and agreeing a start date after your notice ends is normal.
• Complete onboarding paperwork: Background checks, visa forms and medicals.
• Study and rest: Take a course or exam, as long as it isn't paid work. Many people use the time to travel.

What you shouldn't do without written consent: start work early, contact your old clients, or recruit former colleagues. Your contract and any non-solicit clause will set the limits.

How garden leave interacts with a non-compete

Garden leave and a non-compete often stack: 3 months of garden leave followed by a 6-month non-compete keeps you out of the market for 9 months. The Legal 500 guide notes that courts may look at the combined period when deciding if a non-compete is reasonable, and Lewis Silkin recommends contracts say whether garden leave counts towards the non-compete.

Look for that wording in your contract. If the clause offsets garden leave against the non-compete, you're in a much better position. We explain how Hong Kong courts treat restrictive covenants in our employment contract guide.

Garden Leave in Banking and Finance

Garden leave is standard in Hong Kong banks, brokers and fund managers. The Legal 500 guide says senior executives, directors and finance, legal and compliance professionals commonly have notice periods of 3 months, 6 months or sometimes longer. Front-office staff (sales, trading, coverage, portfolio management) are the most likely to spend most of that on garden leave.

Our investment banking jobs guide covers how banks hire laterally and what packages look like.

Your SFC licence during garden leave

If you're a licensed representative, your licence is tied to your firm (your principal). You stay accredited to the old firm until it ceases your accreditation, and you can't carry on regulated activities for the new firm until your accreditation is transferred.

The SFC's licensing procedures say:

1. Your old firm notifies the SFC within 7 business days after you cease to act for it, through WINGS-LIC.
2. You apply for a transfer of accreditation through WINGS-LIC within 180 days after that cessation.
3. Processing takes about seven business days for the same regulated activities you held before.

The 180-day clock starts from cessation, not from your resignation. Some firms cease your accreditation when garden leave starts, others on your last day, so ask HR which date they'll use. If you miss the 180 days, an older SFC FAQ says your licence will be revoked and the SFC has no power to extend the period. Check the current steps on the SFC's licensing application procedures page.

What Happens to Your Work Visa on Garden Leave?

Nothing changes while you're on garden leave. You're still employed by the company that sponsored your visa, so your permission to stay on employment terms continues.

The issue is the next job. The Immigration Department's General Employment Policy page says professionals admitted under GEP must get prior approval from the Director of Immigration for any change of employment, and processing normally takes four weeks once ImmD has every document. Your new employer can't start you until that approval is in place.

Use garden leave to get the change of employment application in early, so it's approved by the time your notice ends. Top-tier professionals on time limitation only (2 years under GEP plus HK$2 million assessable income) only need to notify ImmD of a job change. Our guide to changing jobs on a Hong Kong work visa walks through the documents.

Is Garden Leave Pay Taxed?

Yes. Garden leave pay is ordinary salary, so it's taxed as income in the year you receive it and reported by your employer on your normal tax forms.

PILON is also taxable. The Inland Revenue Department lists payment in lieu of notice accrued on or after 1 April 2012 as chargeable to salaries tax, along with leave pay, bonuses, gratuities and terminal awards. Your departing employer reports it when it files your employer's return on termination.

There's no tax advantage in choosing one over the other, but timing can matter if your garden leave crosses 31 March and pushes income into a new tax year.

Sample Garden Leave Clause, Explained

Here's a typical clause, written in plain terms. Yours will differ, so read it against this.

"During all or any part of any period of notice, the Company may require you not to attend work, not to perform any duties and not to contact any client, supplier or employee of the Company. During this period you will remain an employee, will continue to receive your salary and contractual benefits, and must not be employed by or work for any other person. Any period of garden leave will reduce the duration of the restrictions in clause X."

What each part means:

• "All or any part of any period of notice": Your employer can put you on garden leave from day one of notice or partway through. It applies if you resign and if you are given notice.
• "Not to contact any client... or employee": Covers your personal network too. Don't message clients you managed, even socially, without checking.
• "Remain an employee... continue to receive your salary and contractual benefits": This is the trade-off that makes garden leave enforceable. If your employer stops paying, the clause falls away.
• "Must not be employed by or work for any other person": Your new job waits.
• "Will reduce the duration of the restrictions": The offset wording. If your clause has it, garden leave counts against your non-compete. If it doesn't, try to negotiate it in.

How to Negotiate a Shorter Garden Leave

Most garden leave is negotiable, especially once your employer has protected the clients and handed over your work. Plenty of garden leave periods end well before the notice date.

1. Ask at resignation. Offer a full handover and ask for an early release date in the same meeting.
2. Show the risk is gone. If you're moving to a non-competitor or a different business line, say so in writing.
3. Get your new employer involved. A hiring manager who calls your old boss can move things faster.
4. Offer something: Forgoing unvested awards or part of the notice pay can buy an earlier release.
5. Get the release in writing. It should state your new last day, what you'll be paid and whether any non-compete is shortened.

Write your resignation letter carefully, as it starts the clock. Our resignation letter guide has templates for Hong Kong notice periods.

Common Garden Leave Mistakes

• Starting work early: Even a "quick intro call" with your new team's clients can breach your contract.
• Missing the SFC 180 days: Find out your cessation date and diarise the deadline.
• Assuming your bonus is safe: Check the bonus plan's "not under notice" condition before resigning.
• Forgetting the visa step: Your new employer can't start you without ImmD approval, so apply during garden leave.
• Cancelling medical cover too early: You're still covered until your last day; don't drop it before the new policy starts.
• Leaving things verbal: Get any early release, payout or non-compete change in writing.

FAQs: Garden Leave in Hong Kong

Is garden leave paid in Hong Kong?

Yes. You receive your full salary and contractual benefits during garden leave, because you're still employed. Your MPF contributions also continue.

Does the Employment Ordinance cover garden leave?

No. The Employment Ordinance sets minimum notice and allows payment in lieu of notice, but it doesn't mention garden leave. Garden leave depends on what your employment contract says.

Can my employer put me on garden leave without a clause in my contract?

It's risky for the employer. Without an express clause, employees generally have a right to work during notice. In practice it's rarely challenged for short notice periods, but a long garden leave imposed without a clause could support a constructive dismissal argument.

Can I work for another company during garden leave?

No. You're still employed by your current company until the end of notice, and your contract will almost certainly prohibit it. You can sign a new contract and prepare to start, but not begin work.

What is the difference between garden leave and PILON?

On garden leave, you stay employed and are paid monthly until notice ends. With payment in lieu of notice, your employment ends immediately and you get a lump sum, so you can start a new job straight away.

Do I still get MPF contributions on garden leave?

Yes, because your salary is relevant income. A PILON payment is different: the MPFA says it isn't relevant income, so no MPF is deducted from it.

Is garden leave pay taxable in Hong Kong?

Yes. Garden leave pay is salary and is chargeable to salaries tax. Payment in lieu of notice is also taxable when accrued on or after 1 April 2012.

Can I use annual leave during garden leave?

If you resigned, you can choose to take statutory annual leave during your notice. If your employer gave notice, it can't count your statutory annual leave as part of the notice period, and untaken leave must be paid out.

Does my work visa continue during garden leave?

Yes. You're still employed by your sponsor, so your visa continues. Your new employer needs Immigration Department approval for the change of employment before you can start, which normally takes four weeks.

How long is garden leave in banking in Hong Kong?

It can run for the whole notice period. Senior and front-office finance staff commonly have notice periods of 3 or 6 months, and garden leave often covers most of it.

Key Takeaways

• Garden leave comes from your contract; the Employment Ordinance doesn't mention it.
• Without a contract term, the statutory minimum notice after probation is 1 month, and never less than 7 days.
• You get full salary and benefits on garden leave, plus MPF of up to HK$1,500 a month from each side.
• PILON ends employment at once, carries no MPF and is taxable if accrued on or after 1 April 2012.
• SFC licensed representatives must apply to transfer accreditation within 180 days of cessation; processing takes about seven business days.
• GEP visa holders need ImmD approval before starting a new job, which normally takes four weeks.
• Final payments, including untaken annual leave, are due within 7 days of your last day.

Line Up Your Next Role Before Garden Leave Ends

Garden leave is the best time to secure your next move. Browse English-speaking jobs in Hong Kong on ExpatJobBoard, including finance and banking roles that expect a notice period.