Statutory Holidays vs General Holidays vs Annual Leave

At a glance

Day counts, eligibility and calculation methods are as set out in the Employment Ordinance and as most recently published by the Labour Department.

15 days or 17 — which two are the difference?

Good Friday and the day after Good Friday.

The law only requires an employer to give 15 days of statutory holiday. Plenty of companies give all 17 general holidays, but that is company policy or a contractual term, not a legal requirement.

And the two numbers are converging — statutory holidays are increasing in stages: 15 days in 2026 (Easter Monday added), 16 in 2028 and 17 in 2030, at which point they align with general holidays entirely.

In practice there is only one decision to make: whether the employment contract says “statutory holidays” or “general holidays”. That one phrase decides whether your employees get two days more or two days fewer each year.

Trap one: statutory holidays cannot be bought out

This is a hard rule — it does not become permissible because the employee agrees.

If an employee has to work on a statutory holiday, you have to arrange either:

• An alternative holiday — within 60 days before or after that statutory holiday, with at least 48 hours’ notice to the employee; or
• A substituted holiday — with the employee’s agreement, within 30 days before or after.

Annual leave is different: the portion of an employee’s annual leave above 10 days may, at the employee’s own election, be paid out instead; the first 10 days cannot.

Which is to say “we’re very busy this year, I’ll pay you instead of you taking it” simply does not work for statutory holidays.

Trap two: everyone gets the day off; whether it is paid depends on service

Owners frequently get this the wrong way round.

The day off — every employee gets it, with no service threshold.

Holiday pay — requires that the employee has been employed under a continuous contract for 3 months before that statutory holiday. The amount is based on average daily wages over the preceding 12 months.

So an employee one month into the job who reaches a statutory holiday still gets the day off; it may simply be unpaid. Doing it the other way round — asking them to work as compensation — is unlawful.

The continuous contract threshold itself changed in January 2026 (from “418” to “468”); see Employment Ordinance basics.

When annual leave is taken, and when it has to be paid out

Annual leave becomes available after 12 months under a continuous contract. The employer must arrange for it to be taken within the 12 months in which it is available; the dates are the employer’s to set, but only after consulting the employee and with advance notice. Annual leave pay is likewise based on average daily wages over the preceding 12 months.

Where an employee leaves with annual leave untaken, the untaken portion is paid out — and it belongs to the group of payments due within 7 days of termination, not something that can wait for the next payday.

Three actions and you need not think about it again all year

One: write it clearly in the contract — 15 days or 17. Do not use vague wording like “company holidays”.

Two: put the year in the calendar at the start, so you can see the whole year’s holidays and whether any alternative holidays need arranging.

Three: record every employee’s start date — both the 3-month line (holiday pay) and the 12-month line (annual leave) run from it, and it is the same date that MPF and employees’ compensation insurance run from.

Want someone to keep on top of the records and filings that come with hiring? Talk to us.

This is general information and does not constitute legal advice. Holiday entitlements, eligibility and calculation methods are as set out in the Employment Ordinance and the Holidays Ordinance and as most recently published by the Labour Department.