Termination Letter + SP/LSP Calculation

TERMINATION LETTER AND SEVERANCE / LONG SERVICE PAYMENT CALCULATION

Employee: ✓Employee name Position: ✓Position Date of notice: Date of notice Last working day: Last working day

This letter gives notice of termination under the Employment Ordinance (EO, Cap. 57) and sets out the calculation of severance payment (SP) / long service payment (LSP), if payable, following the abolition of the MPF offsetting arrangement with effect from 1 May 2025.

1. TERMINATION 1.1. Reason: Reason for termination 1.2. Notice given / payment in lieu: Notice given / payment in lieu of notice

2. SP/LSP CALCULATION — PRE-TRANSITION PORTION (SERVICE TO 30 APRIL 2025) 2.1. Years of service to 30 April 2025: Years of service up to 30 April 2025 2.2. Monthly wage as at 30 April 2025: Monthly wage as at 30 April 2025 2.3. Formula: 2/3 × monthly wage (capped at HK$22,500) × years of service. For this portion, accrued benefits attributable to the employer's mandatory MPF contributions MAY be used to offset the amount payable. 2.4. Pre-transition amount: SP/LSP amount — pre-transition portion

3. SP/LSP CALCULATION — POST-TRANSITION PORTION (SERVICE FROM 1 MAY 2025) 3.1. Years of service from 1 May 2025: Years of service from 1 May 2025 3.2. Last full month's wage: Last full month's wage before termination 3.3. Formula: 2/3 × monthly wage (capped at HK$22,500) × years of service. For this portion, mandatory MPF contributions may NOT be used as an offset — only voluntary contributions or gratuities attributable to service may reduce it. 3.4. Post-transition amount: SP/LSP amount — post-transition portion

4. TOTAL 4.1. Total SP/LSP, subject to the overall cap of HK$390,000: Total SP/LSP (capped at HK$390,000) 4.2. Employers facing difficulty funding the post-transition, non-offsettable portion may be eligible for the government's 25-year Subsidy Scheme; the MPFA's EasyCal tool may be used to verify this calculation.

5. FINAL PAYMENT 5.1. All final payments (wages, unused leave, SP/LSP) are due by: Final payment date.

Employer ______________ Employee (acknowledged receipt) ______________ / ✓Employee name /

— — — ⚠️ This is a boilerplate template, not legal advice. Hong Kong's Employment Ordinance, MPF, Employees' Compensation, and PDPO compliance regimes are subject to near-term and phased changes — including the abolition of MPF offsetting for severance/long service payments (in effect since 1 May 2025), the "468 rule" for continuous contracts (in effect from 18 January 2026), the Statutory Minimum Wage rising to HK$43.1/hour (from 1 May 2026, now subject to annual review), the growing statutory holiday schedule (15 days in 2026), and a pending public consultation on cooling-off periods for prepaid beauty/fitness contracts (29 June – 31 August 2026) — have this template reviewed and adapted by a lawyer before use, and confirm the current rules and thresholds at labour.gov.hk, mpfa.org.hk, pcpd.org.hk, and fehd.gov.hk on the date of use.