Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 240

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 19
Chunk 240
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 when incurred if the amortization period of the asset that
the Group otherwise would have recognized is one year or less.

The Group generates revenues
from fees charged for the services (payroll outsourcing services and employment services) provided to its clients.

There are two revenue streams
within the Group’s operations: payroll outsourcing services and employment services.

Employment services

For the employment services,
the Group (i) employs candidates who are sourced by the customers themselves under the name of the Group’s entities or under the
name of the Group’s in-country partners and then the Group seconds the employees back to the customers; (ii) handles the seconded
employees’ payroll and other administrative matters as their employer of records directly or through its in-country partners; and
(iii) makes sure the employment is complied with the Labor Law in the respective jurisdictions.

The performance obligations
in the agreements are generally combined into one performance obligation, as they are considered a series of distinct services, and are
satisfied over time because the client simultaneously receives and consumes the benefits provided as the Group performs the services.
The Group uses the output method based on a fixed fee per employee serviced to recognize revenue, as the value to the client of the goods
or services transferred to date (e. g. number of payees or number of payrolls processed) appropriately depicts performance towards complete
satisfaction of the performance obligation. The fees are typically billed in the period in which services are performed.

F-10

The Group considers the guidance
in ASC 606 with respect to principal versus agent considerations, in determining the appropriate treatment for the transactions between
the Group and the Group’s in-country partners and the customers related to employment of candidates. The classification of transactions
under the arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations
of the participants. The Group arranges the employment for the Group’s customers who bear the cost of candidates’ salary.
The Group collects the payroll and pays the candidate on behalf of its customers. Therefore, the Group acts as an agent in the provision
of such services and recognizes the revenue with the gross billings to the customers less the amounts the Group pays to the candidates
sourced by the customers.

The service fee for each seconded
employee is charged on a monthly basis during the service period based on an agreed percentage of the seconded employee’s monthly
remuneration package or at a fixed fee per seconded employee, at an agreed currency exchange rate on the monthly rem