What is MPF?

In the face of the surge in the number of elderly residents in Hong Kong, the government has set up the Mandatory Provident Fund Scheme Ordinance (MPFSO) as a retirement protection scheme to ensure the financial well-being of retirees. To fight against the rapid increase of aging issues, the government has established the MPF system to support workers in building up their retirement savings and mitigate the financial challenges that can arise during their late adulthood stage.

 

Who is Mandated to join the MPF scheme?

Except for exempt persons, employees and self-employed persons aged 18 to 64 are required to join an MPF scheme under MPFSO.

How to calculate contributions?

  • If an employee’s relevant income falls within the range of HKD7,100 and HKD30,000 per month, the employee and the employer must each contribute 5% of the income into the employee’s MPF account.
  • If an employee’s monthly income is less than HKD7,100, they do not need to contribute to the account. However, the employer must still make a 5% contribution based on the employee’s income.
  • For cases where the employee’s income exceeds the maximum HKD30,000, both the employee and the employer must contribute HKD1,500 each.

Relevant income

In general, employee’s relevant income could be wages and salaries (Bonus and end-of-contract gratuity excluded), allowances, car subsidy in cash, etc. Various types of income are counted as relevant income. For further information, please refer to the government official website.

Is MPF Taxable in Hong Kong?

HKD 18,000 will be the annual maximum tax deduction an employee can receive for their contributions to an MPF scheme. Voluntary contributions may or may not be claimed, depending on the payment types and MPF scheme. 

How can FastLane HR offer help?

The MPF scheme can be tedious and complicated tasks that increase the burden of both the employer and employees. Delegate the tasks to us and let go of the old days of living with uncertainty and burden, struggling to meet the rigid reporting rules and heavy paperwork involved.

Collaborating with our professional team allows you to enjoy high-quality, one-stop HR services while reducing costs. Should you have any inquiries, please contact us via WhatsApp, WeChat, or phone calls. You can also schedule a meeting with us for further information. We look forward to seeing you.