Hong Kong MPF

Hong Kong MPF

  • MPFAdmin
    Ease your workload on MPF administration

Mandatory Provident Fund’s (“MPF”) are compulsory retirement schemes / pension funds that are created by the Hong Kong government and are provided by approved private organisations. MPF’s are a key aspect of Hong Kong payroll calculations and are guided by the Mandatory Provident Fund Schemes Ordinance (“MPFSO”).

In accordance with the MPFSO, Hong Kong employees and their employers are required to make monthly contributions to their employee’s MPF scheme, making MPF administration a key component of payroll calculations. Unfortunately, managing all the aspects of MPF administration and various other pension schemes can be time-consuming, especially for those that are not familiar with Hong Kong MPF laws and need to focus their time and energy on the core aspects of running their business.
FastLane HR offers a full range of MPF administration services, allowing you to concentrate on what you do best:
  • Authority to act as the authorized signatory
  • Compile a monthly executive summary of your Hong Kong MPF activities
  • Provide a monthly Hong Kong MPF remittance statement for the MPF trustee
  • Enrollment, termination, and contribution arrangement for all every employee

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FAQ

Is MPF applicable to all Hong Kong employees?

MPF’s are only intended to cover individuals who are either employed in, or are from Hong Kong. To the extent that an employee is working outside of Hong Kong, they may be covered under the Hong Kong MPF system if they can provide sufficient evidence of a connection between themselves and Hong Kong.

What are my MPF obligations as an employer?

Employers have a range of obligations they must meet to ensure that they are properly supporting their employees Hong Kong MPF schemes. Firstly, they must complete the one-time obligation of assisting their employees in opening MPF accounts. After, they must meet ongoing obligations of remitting contributions to their employees MPF schemes once every contribution period (generally the wage period).
As part of MPF administration, employers and employees are each required to make regular mandatory contributions of 5% of the employee’s relevant income to an MPF scheme, subject to relevant income levels. Relevant income refers to all monetary payments paid or payable by an employer to an employee. Such payments include wages, salary, leave pay, fees, commissions, bonuses, gratuities, perquisites or allowances as outlined under Chapter 57 of the Hong Kong Employment Ordinance.
As part of the payroll process, employers are required to calculate their employee’s relevant income and the amount of mandatory contribution that must be made for each contribution period. The employer must then deduct the calculated amount from their employee’s income and remit that sum to the respective account.

Are there exemptions under an MPF Scheme?

Not all employees working in Hong Kong must be enrolled under a Hong Kong MPF scheme. Expatriates residing in Hong Kong for employment purposes can obtain permission to be exempted by the Hong Kong Government. Permission can only be granted if the employee in question is either a member of an overseas retirement scheme, or will reside in Hong Kong for a period of 13 months or less.

What happens in the event of non-compliance?

In the event an employer fails to adhere to their MPF obligations, the Mandatory Provident Fund Schemes Authority (“MPFA”) will issue the employer with a “surcharge notice”. This notice will impose a 5% surcharge on default contributions and the surcharge received will go entirely to the employee’s MPF account. Defaulting on contributions is a criminal offence and the defaulter is liable to a maximum penalty of a HKD 450,000 fine and imprisonment for four years. The MPFA can also impose a financial penalty of HKD 5,000 or 10% of the default amount, whichever is greater, on the defaulting employer.

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