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Information Centre

Self-employed Person

Coverage and Enrolment

1
What is a self-employed person under the MPF System?
If your income is derived from your production of or trading in goods or services, and you are not an employee, you are most probably a self-employed person. In general, sole proprietors and partners in a partnership business are regarded as self-employed persons.
2
What if I am both a self-employed person and an employee?
You will have two MPF scheme memberships:
  • As a self-employed person, you have to enrol yourself in an MPF scheme and make mandatory contributions; and
  • As an employee, your employer is required to enrol you in an MPF scheme and make mandatory contributions for you.
3
I have recently become self-employed. If my relevant income is less than $7,100 a month or $85,200 a year, do I need to enrol myself in an MPF scheme?
Yes. Enrolment is mandatory for a self-employed person who is aged 18 to below 65, regardless of his/her relevant income, unless he/she is an exempt person. You must enrol in an MPF scheme within 60 days from the day you have become a self-employed person.
4
I am a tutor or consultant. Do I need to enrol myself in an MPF scheme?
If you have entered into a contract for service but are not an employee of that company, you may be regarded as a self-employed person. You are therefore required to enrol yourself into an MPF scheme as a self-employed person and make contributions.

If you have entered into a contract of employment with the company and have been employed as an employee for 60 days, the employer is required to enrol you into an MPF scheme and make contributions for you accordingly.
5
Which scheme should I choose?
There are many MPF schemes available in the market. You should consider the following factors when making a choice:
  • types of constituent funds (i.e. investment options) available under the schemes;
  • fees and charges payable under the schemes; and
  • customer service offered by the trustees.
6
What information am I entitled to receive before becoming a scheme member of an MPF scheme?
The scheme trustee is required to disclose the following information to you when you make an application to become a scheme member:
  • the requirements and information required for application for membership in the scheme;
  • the governing rules of the scheme; and
  • the scheme details, including all the fees and charges payable under the scheme.
7
Can my application for membership of an MPF scheme be rejected?
There is a "Non-refusal" provision in the law stating that the scheme trustee cannot refuse an application for membership of the scheme if the applicant provides the information required by the trustee, and agrees in writing to comply with the governing rules of the scheme.

Making Contributions

8
How much do I need to contribute?
Relevant IncomeMandatory Contribution Amount
MonthlyYearly
Less than $7,100Less than $85,200No contributions required
$7,100 - $30,000$85,200 to $360,000Relevant income x 5%
More than $30,000More than $360,000$1,500 per month or
$18,000 per year
Self-employed persons may also make voluntary contributions on top of their mandatory contributions.

 
9
How should my relevant income be calculated if I earn income from more than one business?
Your relevant income is the combined incomes from all of your businesses for that period, including profits and losses.
10
When should I pay the mandatory contribution?
You may choose to contribute on a monthly or a yearly basis on or before the contribution day. You should inform your scheme trustee of your choice when you first enrol in an MPF scheme, and at least 30 days before the end of each financial year of the scheme.

If you choose a monthly basis, you should specify a day to your scheme trustee, and make your monthly mandatory contributions by that day each month.
If you choose a yearly basis, you should pay your mandatory contribution to your scheme trustee by the end of each financial year of the scheme.

If the contribution day falls on a Saturday, a public holiday, a gale warning day or a black rainstorm warning day, the contribution day is extended to the next following day which is not a Saturday, a public holiday, a gale warning day or a black rainstorm warning day.
11
What is "relevant income"?
Your relevant income is your assessable profits calculated in accordance with the Inland Revenue Ordinance. If you contribute on a monthly basis, divide your assessable profits by the number of whole calendar months in the financial period to ascertain your monthly relevant income.
12
If I am a newly self-employed person and have yet to receive a notice of assessment from the Inland Revenue Department, how should I calculate my relevant income?
The relevant income of a self-employed person is basically his assessable profits calculated in accordance with the Inland Revenue Ordinance. Since you do not yet have a notice of assessment issued by the Inland Revenue Department, you have three options:
1) You may use the basic allowance (as defined in section 28 of the Inland Revenue Ordinance) as your relevant income to determine your contribution;
2) You may make a written income declaration to your trustee (Note: It is a criminal offence to make a false declaration to trustee and offenders may be prosecuted.); or
3) You may make mandatory contributions based on the maximum level of relevant income (i.e. $1,500 per month or $18,000 per year).
13
I am a partner of a partnership company. How should I calculate my relevant income?
Your relevant income for the scheme's financial year should be calculated by making proportional adjustments according to your share of the profits of the partnership business for that period.
14
What should I do if I cease to be self-employed during a scheme's financial year?
Your mandatory contribution should be recalculated, adjusting the amount you would have paid for the whole contribution period by the number of days you were self-employed during the period. You should also notify your scheme trustee of the cessation of self-employment status before the next contribution period.
15
What should I do with my accrued benefits when I cease to be self-employed and become employed by an employer?

You may choose to :

  1. transfer your accrued benefits to your contribution account under the MPF scheme of your new employer; or
  2. transfer your accrued benefits to an existing personal account that you hold. 
If you do not hold any personal account, and you are satisfied with your existing MPF scheme, you may retain your MPF benefits in a personal account under the scheme.
If you choose to transfer your benefits, you need to fill in an election form (Form MPF(S)-P(M)) and send it to your new scheme trustee or new employer(if you choose to transfer your benefits to your new employer's scheme). The form can be obtained from your trustee or downloaded here.
16
What should I do if my business sustains a loss?
You may report the loss to your scheme trustee and discontinue payment of mandatory contributions from the current contribution period until your relevant income is not less than the minimum level of relevant income ($7,100 per month or $85,200 a year).

Last Revision Date: 20/06/2017