Inflation fuels demand for flexible pay in Hong Kong

Deel’s report shows rising financial stress and growing demand for modern payroll systems.

Rising living costs are putting intense pressure on Hong Kong’s workforce, with employees calling for more flexibility and transparency in how they’re paid. Deel’s Hong Kong Payday Expectations Report shows most employees say their income is no longer keeping up with inflation—fueling widespread financial stress and a growing appetite for modern payroll solutions.

According to Karen Ng, Country Leader, Asia, Deel, “86% of employees actually failed in the inflation paycheck gap, which means they can't keep up with the cost of living because of inflation.” She added that financial fragility is particularly high among younger workers.

The report found that inflation has left employees seeking flexibility in pay cycles and more transparency in salary processes. Ng said that 46% of workers want more flexible payroll options, while 81% support on-demand or earned wage access, where employees can get paid as they work. “That basically opens up flexibility in payment and less reliability on credit cards or buy now, pay later solutions,” she said.

However, meeting these expectations remains a challenge. Barry Tang, Partnership Director at Deel, said that while employee demand is clear, payroll systems aren’t keeping pace. “Only 23% of the payroll teams told us that they are functioning well,” he noted. “Eighty percent told us they are facing staff shortages, 90% said workloads have increased after the abolition of the MPF offset, and 63% are struggling with system integration issues.”

Tang warned that these inefficiencies have direct consequences for workers. “Eighty percent of the Hong Kong workers we surveyed told us they have experienced pay-related issues such as underpayments, delays or wrong deductions,” he said. “If the payroll process is breaking down, it not just creates administrative headaches, it actually amplifies financial stress.”

Ng emphasised that payroll should no longer be viewed as a back-office task. “Payroll is no longer just an administrative function. We do believe that it has to be a strategic function across the organisation,” she said.

Tang added that modernisation is crucial for talent retention. “A modern payroll system can simplify compliance, improve integration across markets, and give employees anytime pay,” he said. “That’s what will help businesses attract and retain talent in today’s competitive market.”