A New Formula, a Higher Floor, and Lingering Pressures

As I mentioned in my last update on Hong Kong’s statutory minimum wage in early 2025, Hong Kong changed the formula for determining the SMW at the end of 2024 and has since raised the wage from HKD40 per hour to

HKD42.10 (USD5.40, or slightly higher than increase to HKD41.80 as I noted in my last update). Rather than the rate being determined more or less ad hoc by a panel after extensive discussion, now the formula is based on a calculation tied to CPI, GDP growth, and average GDP growth over the past 10 years.

The current proposed increase by the Minimum Wage Commission is HKD1, or HKD43.10, a 2.38% increase (note, Hong Kong’s GDP for 2025 was 3.5%). The new SMW rate could take effect as of May 1, 2026 if the Hong Kong Legislative Council approves it when tabled on February 25, 2026.

The MWC seems to have decided not to cap the increase to 1% as I wrote earlier. However, the Commission did agree to change the rate annually rather than every two years. It’s also worth noting that the SMW increase follows removal of an annual HKD2,500 student grant for families.(1)

Also worth noting is that only a small percentage (less than 1%) of Hong Kong’s workers earn the minimum wage, as the majority of manual and service jobs pay more than the minimum wage. The SMW is designed to set a floor wage to protect the lowest paid workers. 

Still, for that 1%, earning USD5.51 per hour in a high-cost city like Hong Kong remains a struggle. 

https://www.scmp.com/news/hong-kong/article/3343063/hong-kongs-minimum-wage-set-rise-hk1-hour-hk4310?module=top_story&pgtype=section