Document background
The Deferred Salary Agreement is utilized when an employer and employee wish to establish a formal arrangement for deferring part of the employee's compensation to a future date. This arrangement is common in Hong Kong, particularly in financial services and professional services sectors, where it can serve various purposes including tax planning, employee retention, and alignment with long-term company performance. The agreement must comply with Hong Kong employment law, including the Employment Ordinance (Cap. 57) and relevant tax regulations. It typically includes detailed terms about the deferral mechanism, payment conditions, tax treatment, and MPF implications. This document is particularly relevant during employment contract negotiations, company restructuring, or implementation of new compensation schemes.
