Mpf mandatory contribution

Hong Kong MPF Contribution Guidelines

1. Learn how to set up an MPF account?

Establishing an MPF account is a straightforward process. Hong Kong’s Obligatory Provident Fund Schemes Writerity (“MPFA”) maintains a list of MPF Approved Trustees which employers may consider. For instance, the HSBC MPF plan provides people with a wide number of investment schemes comparable to those targeted more on global bonds, Hong Kong and Chinese equities and so on. Simply contact your chosen MPF providers and full the related employer application forms for the scheme of your choice. Once an employer has successfully enrolled in an MPF scheme, they will be issued an employer’s identification number, demonstrating your obligation to assist your employees in their retirement schemes.

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2. What are an employers’ obligations under the Hong Kong MPF regulations?

Employers should additionally complete the one-time obligation of helping their employees in opening MPF accounts. Except for exempt persons, an employer ought to enroll each full-time and part-time employees who are a minimum of 18 but under 65 years of age in an MPF scheme within the first 60 days of their employment. Nonetheless, if an employment relationship ends prior to the sixtieth day of employment, no MPF arrangement is required.

Upon successful enrollment, employers should meet ongoing obligations of remitting contributions to their staff MPF schemes once every contribution period. Contributions for month-to-month-paid full-time employees are typically made on the 10th day of every month.

Employers and employees are every required to make regular obligatory contributions to an staff MPF scheme. The MPF employee contribution and MPF employer contribution ought to every be 5% of the employee’s related income, topic to related revenue levels. For a monthly-paid worker, the minimum and maximum relevant income levels are $7,100 and $30,000 respectively.

To make payments to their employees, employers are required to calculate their employee’s related revenue and the amount of necessary contribution that should be made for each contribution period. The employer should then deduct the calculated amount from their employee’s revenue and remit that sum to their MPF account.

3. What are the worker contribution rules under the Hong Kong MPF rules?

Staff do not face as many compliance obligations as their employers do. Nonetheless, it is vital for workers to ensure that they make the common necessary contribution of 5% of their related earnings to their related scheme as mentioned above.

4. Are there exemptions under a Hong Kong MPF contribution guidelines?

Not all workers working in Hong Kong have to be enrolled under an MPF scheme. Expatriates residing in Hong Kong for employment functions can obtain permission to be exempted by the Hong Kong Government. Permission can only be granted if the employee in query is either a member of an abroad retirement scheme, or will reside in Hong Kong for a interval of 13 months or less.

5. Penalty

Within the occasion an employer fails to adhere to their MPF obligations, the MPFA will situation the employer with a “surcharge notice”. This notice will impose a 5% surcharge on default contributions and the surcharge obtained will go totally to the employee’s MPF account. In addition, defaulting on contributions is a criminal offence and the defaulter is liable to a maximum penalty of a HK$450,000 fine and imprisonment for 4 years. Employers who’ve failed to comply with their MPF employer obligations are liable to potential financial penalties of HK$5,000, or 10% of the default quantity, whichever is bigger, on the defaulting employer.

Conclusion

We understand that issues referring to MPF calculation and payroll administration are time-consuming tasks that require a significant amount of the company’s resources. FastLane can manage these essential business tasks, akin to payroll, MPF account setup and your worker’s enrollment into your chosen MPF scheme in your behalf.

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