MPF System

Mandatory Contributions

Mandatory contributions made for an employee are fully and immediately vested in the employee once they are paid into his/her MPF account. Any investment return derived from the mandatory contributions is also fully and immediately vested in that employee.

Regular employees

Expand All Collapse All

How to calculate contributions?

Employees and employers are both required to make mandatory contributions of 5% of the employee’s relevant income into the employee’s MPF account, subject to the minimum and maximum relevant income levels.

 

Employers must make mandatory contributions for their employees with their own funds. They must also deduct the employee’s contributions from his/her relevant income for each contribution period (generally the wage period).

For monthly paid employees, the current minimum and maximum relevant income levels are $7,100 and $30,000 respectively.

Learn about the adjustments made to the minimum and maximum relevant income levels for employee contributions  over the years.

Monthly paid employees

Monthly Relevant Income
Employer's Mandatory Contribution
Employee's Mandatory Contribution
Less than $7,100
Relevant income x 5%
No contribution is required
$7,100 to $30,000
Relevant income x 5%
Relevant income x 5%
More than $30,000
$1,500
$1,500

Non-monthly paid employees


If an employee is paid daily, weekly or bi-monthly, the employer must first calculate the minimum and maximum relevant income levels of the wage period based on the daily minimum and maximum relevant income levels of $280 and $1,000.  The contributions to be made should be determined as follows:   
Relevant Income of Employee
Employer's Mandatory Contribution
Employee's Mandatory Contribution
Less than the minimum level ($280 x number of days in the wage period)
Relevant income x 5%
No contribution is required
Between the minimum and maximum levels
Relevant income x 5%
Relevant income x 5%
More than the maximum level ($1,000 x number of days in the wage period)
Maximum level x 5%
Maximum level x 5%
For a weekly paid employee, as there are seven days in a week, the weekly maximum relevant income level should be $7,000 ($1,000 x 7 days) and the weekly minimum relevant income level should be $1,960 ($280 x 7 days).
Relevant Income of Employee
Employer's Mandatory Contribution
Employee's Mandatory Contribution
Less than the minimum level ($1,960)
Relevant income x 5%
No contribution is required
Between the minimum and maximum levels ($1,960 to $7,000)
Relevant income x 5%
Relevant income x 5%
More than the maximum level ($7,000)
Maximum level x 5%
Maximum level x 5%
Relevant income

Relevant income refers to all monetary payments paid or payable by an employer to an employee.


Including: any wages, salary, leave pay, fees, commissions, bonuses, gratuities, perquisites or allowances


Excluding: severance payments or long service payments under the Employment Ordinance

Examples


The following is a list of examples of different types of income:
 
Types of Income
Relevant Income? (Y/N)
1. Wages and Salaries  
13th month pay (double pay)
Y (How many months of pay an employee receives is determined by his/her employment contract) 
Bonus
  • at employer’s discretion
  • performance linked
Y
End-of-contract gratuity
Y
2. Reimbursement / Allowance

 

Nature of reimbursement 
  • self-improvement education expenses
  • uniform laundry expenses
  • meals provided or obtained during office hours
  • mobile phone service charges
  • professional organization membership fee
  • entertainment expenses
  • mileage duty expenses
N (Reimbursement of expenses incurred by employees for employment related goods and services which are necessary in the performance of employment duties) 
Cash allowance
Y (Allowance provided by the employer in cash, which employees may spend as they see fit) 
Internship allowance
Y (Allowance provided by the employer in cash in connection with a vocational training programme)
Paid leave allowance
  •  annual leave
  • compassionate leave
  • examination leave
  • marriage leave
  • sick leave
Y
3. Transportation and Car Subsidy

 

Transportation subsidy
  • free ticket / pass for use of public transport
  • parking coupons
N (Non-monetary benefits) 
Car subsidy
  • free use of car 
 
N (Non-monetary benefits)

Car subsidy in cash

  • fuel and oil
  • maintenance expenses
  • payment of car registration and licence fees for car owned by an employee
(Employer provides cash payment for the benefit of employees)
4. Commission

 

Calculated based on transaction amount, number of transactions or on project basis

Y

5. Tips

 

Tips collected by the employer
Y (Tips collected via the employer and service charges included in the bill (including the tips given by customers when paying the bill with a credit card) which are subsequently distributed partly or fully to employees)
Tips not collected by the employer
N (The tips paid directly to employees, put in a tip box or left on the table by customers.  (The tips are retained by the employee or shared among employees without any intervention by the employer.))
6. Employee Benefits

 

Marriage gifts
N
Holiday tour package
N (Non-monetary benefits. Expenses paid by the employer to cover expenses included in the holiday package, such as transportation, accommodation, food, etc.)
Meals consumed on the spot
N (Non-monetary benefits) 
Meals provided in the form of vouchers
N (Non-monetary benefits)
7. Court Award and Termination Payment

 

Award determined by a court or tribunal as:

 

  • wages
  • salary
  • leave pay
  • fee
  • commission
  • bonus
  • gratuity
  • perquisite
  • allowance
 
Y
 
Payment in lieu of notice
N (Payment that does not fall within the definition of relevant income (i.e. not wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance))
Severance payment
N (Specifically excluded from the definition of “relevant income”) 
Long service payment
N (Specifically excluded from the definition of “relevant income”) 
8. Others

 

Dividend income
N (Returns on investment received by shareholders) 
Share options
N (Non-monetary benefits)
Gains realised from share options
N  
Medical claims reimbursement
N (Payments that are made by third parties, rather than the employer, to employees pursuant to an insurance contract purchased by the employer covering the employees)
Employment-related medical expenses paid directly by the employer
N
Contribution day

Monthly paid employees


Generally, for employees who are paid on a monthly basis, the contribution day is the 10th day of each month. For example, contributions for the wage period of September should be paid to trustees on or before 10 October.

 

For new employees, employers must make their first-time contributions to trustees on or before the next contribution day (the 10th day of each month) after the calendar month in which the 60th day of employment falls.

 

If the contribution day falls on a Saturday, a public holiday or a gale/black rainstorm warning day, the contribution day is extended to the next day which is not a Saturday, a public holiday or a gale/black rainstorm warning day.

For the contribution day of each month in this year, please refer to the MPF Contribution Days Calendar. A digital version of the calendar can be installed on Android and iOS devices.

Contribution period

Employer’s contribution period

Generally, the contribution period refers to the wage period. The calculation of an employer’s contribution for an employee should begin from the first day of the employee’s employment. 

Employee’s contribution period

New employees enjoy a contribution holiday, meaning that they are not required to make contributions for the first 30 days of employment, nor do they have to make contributions for: 

  1. any incomplete wage period that immediately follows the 30-day contribution holiday (if the employee’s wage period is a month or shorter than a month); or 

  2. the calendar month in which the 30th day of employment falls (if the employee’s wage period is longer than a month). 

Example


Ms D’s first day of employment is 5 June. Since she enjoys a contribution holiday for the first 30 days of employment, no MPF contribution should be deducted from her income earned during the 30-day period, i.e, from 5 June to 4 July.


In addition, since her 30th day of employment falls in July, she is not required to make MPF contribution for July (because the contribution holiday extends to the end of the incomplete wage period that immediately follows the 30-day period). The employer should only deduct MPF contribution from Ms D’s income for the contribution period of August and remit the contribution to the trustee on or before 10 September.

Given the contribution holiday does not apply to the employer, the employer’s contributions for Ms D should be calculated from her first day of employment, i.e. 5 June.


Remittance statement
A remittance statement shows every employee’s relevant income, and the contributions made by both the employer and employees. Trustees will allocate the contributions into the account of each of the employees based on the information in the remittance statement.

When to submit?


Employers must provide their trustees with a remittance statement when they make contributions to their trustees.

How to submit?


Written form: some trustees would provide pre-printed remittance statements to employers every month.

Electronic Form: some trustees would provide software to facilitate employers’ preparation and submission of remittance statements online.

Important note


If the trustee does not provide a pre-printed remittance statement or related software,  employers are still required to prepare and submit their own remittance statements.

What if an employee has no relevant income for a particular contribution period?


Even if an employee has no relevant income for a contribution period, the employer is still required to include that employee in the remittance statement. The employer should report '$0' as the employee’s relevant income, or fill in the remittance statement according to the trustee’s instructions.
Contribution record

Monthly pay-record


For every month, after remitting contributions to the trustee, employers should provide each employee with a monthly pay-record within seven working days. The pay-record should include the following information:

 

  • the employee’s relevant income
  • the amount of mandatory contributions made respectively by the employer and the employee 
  • the amount of voluntary contributions (if any) made respectively by the employer and the employee
  • the date on which the contributions were paid to the trustee

Annual benefit statement


An MPF trustee must provide its scheme members with an annual benefit statement (ABS) within three months after the end of each financial period.


ABS must set out:

  • the total amount of contributions the employer paid for the employee during the year;
  • the opening and closing balances of the MPF account for the year; and
  • the gains and losses associated with the MPF account during the year.

Employees' Rights

Employees' responsibilities


Employees should regularly check their pay-records and ensure that contributions are made on time by their employers and the amounts are correct.

Employees' rights


Employees may contact trustees directly to check their account details. Trustees will usually provide different channels (such as hotlines, websites, automatic teller machines and customer service centres) for employees to enquire about account details. 

Lodging a complaint


If an employee suspects that his/her employer has failed to make contributions, he/she should first clarify with the employer or the trustee. If the employer has indeed defaulted on contributions, the employee should contact MPFA immediately to lodge a complaint.

Persons employed in the construction industry and the catering industry for less than 60 days (Casual employees)


If employers choose to enrol their casual employees in a Master Trust Scheme, please note that:

 

  • Casual employees do not have a contribution holiday.
  • Employers shall pay the contributions within 10 days after each contribution period ends (even if the contribution period is less than one month). If the contribution day falls on a Saturday, a public holiday or a gale/black rainstorm warning day, the contribution day will be extended to the next day which is not a Saturday, a public holiday or a gale/black rainstorm warning day.
  • Employers must provide their trustees with a remittance statement when they make contributions to their trustees.
  • Employers should also provide each employee with a monthly pay-record and keep the contribution record.

If employers choose to enrol their casual employees in an Industry Scheme, the calculation of contributions is different from that for casual employees in a Master Trust Scheme. For details, please refer to Industry Schemes.