What is Average Monthly Wage

The Average Monthly Wage is applied to: 

• Wages in lieu of notice (by month)

• Bonus Average Regarded Wages

• Double Pay

• User-Defined Formula

For Monthly Rate employees,

Average Monthly Wage = Accumulated Regarded Wages ÷ Round((Accumulated Regarded Days ÷ 365 × 12), 1)

Please note that the number of months is rounded to one decimal place before the calculation is performed, based on Example 4 below.

Monthly wages refer to the employee’s average monthly wages earned in the 12 months immediately preceding the termination date. It generally includes:

• Basic salary

• Overtime pay

• Commissions

• Shift allowances

• Productivity bonuses

• Regular payments for work performed

For Daily/Hourly Rate employees, 

The Average Monthly Wage is 18 times the Average Daily Wage over the last 12 months.

Reference: 

• Labour Department - The Employment Ordinance, Cap. 57 

• A Concise Guide to the Employment Ordinance