Firms freezing salaries also reached a new high since 2022
The average salary growth in Hong Kong hit a "relatively low level" in 2025 at 2.7%, according to a new report, as more employers implement wage freezes for the year.
Data released by the Hong Kong Institute of Human Resource Management (HKIHRM) showed a 0.5 percentage point decline in average pay rises in Hong Kong for 2025.
The majority of employers (88%) implemented salary increases, according to the report. However, 11.4% of organisations froze salaries, a 3.1 percentage point hike from last year and the highest since 2022.
Lawrence Hung Yu-yun, Immediate Past President & Executive Council Member of HKIHRM, said many companies adopted a more cautious approach to salary adjustments amid economic pressures and operational considerations.
More than three in four (76%) employers cited company performance as their primary consideration in pay adjustment decisions. Others said:
- Economic conditions (44%)
- Individual performance (40%)
- Market or competitor's pay adjustment (35%)
"We have observed that the salary adjustment rate for 2025 is at a relatively low level in recent years," Hung said in a statement.
"However, it is noteworthy that over 80% of employees still received pay increases, with no reported pay cuts. This reflects companies' efforts to balance operational competitiveness with the need to retain talent."
Bonuses in Hong Kong
But while the average pay rises declined, the guaranteed bonuses for employees slightly increased to 1.06 months of base salary, up from the 1.00 month recorded in the previous year.
According to the report, 36.5% of organisations offered guaranteed bonus schemes to employees, while 87.4% offered non-guaranteed bonus plans.
These non-guaranteed bonus plans amounted to an average of 1.38 months of employees' basic salary, up from 1.23 months a year ago.
Estimates for 2026
Meanwhile, pay adjustments in Hong Kong are expected to rise to an average of 3.5%, according to the HKIHRM.
Three in 10 employers are expecting to implement salary increases, while two per cent are anticipating pay cuts. The remaining 68% are still undecided.
Hung attributed the increase to signs of economic improvement in Hong Kong, as well as recruitment and retention of talent.
"By 2026, companies are expected to increase salary adjustment rates to attract and retain talent, aligning with the demands of economic transformation," he said.
"It is suggested that companies respond proactively to market dynamics through timely measures – such as by reviewing and adjusting compensation strategies – and adopt a holistic approach to total rewards. This includes enhancing employee training, improving corporate benefits, and fostering family-friendly workplaces to strengthen talent retention and workforce planning."
