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Your complete guide to MPF in Hong Kong

What’s the best way to improve financial wellness across the workforce, retain experienced employees, and attract top talent for years to come? The answer lies with Hong Kong’s government-mandated approach – the Mandatory Provident Fund (MPF).

In this guide by Pacific Prime Hong Kong, we will go over what the MPF is, the benefits for employees and employers, and how Pacific Prime can help find the right MPF solutions.

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What is the MPF?

Launched in 2000, the Mandatory Provident Fund (MPF) is a privately managed and structured savings scheme in which employers and employees are required to make mandatory contributions to the employee’s MPF account. The MPF helps working citizens, residents, and eligible expats in Hong Kong save for their retirement through a suite of individual, employer-sponsored schemes, as well as industry schemes.

However, not all employees are mandated as there are some exceptions, such as for low earners, certain professions, and non-citizens who are already covered by an overseas retirement fund or have been in Hong Kong for fewer than 13 months.

When are employees enrolled?

Full- and part-time employed citizens and eligible expats in Hong Kong between 18 and 64 years old are typically enrolled by their employers by the 60th day of employment. Even if their probation is set at 90 days, employers must select the appropriate investment options and submit all the required documents before the 60th day of employment.

How does the MPF work?

Once an employee is enrolled, monthly contributions made by both the employee and employer will go towards building a respectable savings fund, in which the employee can withdraw when they reach age 65.

However, under the MPF legislation, there are specific circumstances when scheme members, including locals and expats, may withdraw their accrued MPF before the age of 65. These circumstances include early retirement, leaving Hong Kong permanently, terminal illness, and death, to say the least.

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Monthly MPF contributions for employees and employers

Employers are required to make their monthly contribution for their salaried employees by the 10th day of every month, whereas employees will have their contributions automatically deducted from their salaries. And with the exception of casual employees (those who are contracted), employers and employees are obligated to contribute at least 5% of their minimum relevant income or HKD $7,100 per month.

The minimum MPF contribution for employers and employees also varies depending on the employee’s salary range, as shown below.

Salary range (HKD)

Employer contribution (HKD)

Employee contribution (HKD)

Less than $7,100 5% of the salary

No contribution is required

$7,100 to $30,000 5% of the salary

5% of the salary

More than $30,000 $1,500 (max)

$1,500 (max)

Non-monthly MPF contributions for employees and employers

For non-monthly paid employees or those who are paid daily, weekly, or bi-monthly, the employer must first calculate the minimum and maximum relevant income levels of the wage period. This will be based on the daily minimum and maximum relevant income levels of HKD $280 and HKD $1,000.

For instance, for a weekly paid employee, as there are 7 days in a week, the weekly minimum relevant income level should be HKD $1,960 (HKD $280 x 7 days), and the weekly maximum relevant income level should be HKD $7,000 (HKD $1,000 x 7 days). The contributions required are determined below:

Income/wage of employee (HKD) Employer contribution (HKD)

Employee contribution (HKD)

Less than the minimum level ($280 x the number of days in the wage period)

Income/wage x 5%

No contribution is required

Between the minimum and maximum levels

Income/wage x 5%

Income/wage x 5%

More than the maximum level ($1,000 x the number of days in the wage period)

Maximum level x 5%

Maximum level x 5%

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Why is the MPF important for both employees and employers?

The elaborate system works well on many fronts for both employees and employers. For instance, employers who participate in the scheme will easily attract workers who look for companies that want to invest in their future and provide financial stability.

On the other hand, employees will benefit from a fund that grows over time with fair contributions from their employer. More so, the government’s grander scheme helps solve problems that people may generally encounter when saving for retirement, such as limited investment knowledge and capital to invest.

A fairer playing field

In reality, people come from all walks of life and backgrounds in Hong Kong, and not everyone will have access to the same level of knowledge and tools to buy different types of investment products and, in turn, build a diversified investment portfolio.

The MPF seeks to level that playing field and put all workers in a better position where their wealth grows over time until they seek to withdraw at retirement or earlier. So with little capital, scheme members can easily grow their wealth over time as MPF funds can work with a much larger portfolio of assets since they are required by law to meet minimum diversification standards. This means assets in an MPF fund with better performance can balance out the losses from assets with poor performance to reduce or spread investment risks.

Can MPF Hong contributions affect taxes?

Interestingly, employees and employers can deduct taxes with their MPF contributions. Employees can claim up to HKD $18,000 in contributions annually, whereas employers can claim up to 15% of an employee’s annual salary. Hence, making contributions to an MPF fund is beneficial for employees and employers in the long run.

Pacific Prime: The MPF intermediary of choice in Hong Kong

For over 20 years, we have developed effective solutions to meet the needs of locals, expats, and businesses in Hong Kong. Our retirement solutions, in particular, have formed a major part of what we offer to employers to give employees financial stability and support their long-term needs.

Today, we offer a range of holistic employee benefits solutions, including the MPF, to boost the financial well-being of employees in Hong Kong and support employers in the administration and management of MPF solutions.

Here are some benefits of working with Pacific Pirme:

  1. We can design and customize retirement programs that fit your company culture, compare numerous MPF sponsors, and present the one that meets your needs.
  1. Our MPF experts can filter out all the best vendors via a rigorous vendor-selection process (so you needn’t worry about searching).
  2. We offer regular support for account consolidation processes and leverage our long-running partnerships for your employee benefits plan implementation.

To learn more about what we offer as an MPF intermediary, visit our retirement planning solutions page or view our retirement planning and MPF flyer to learn more.

Contact us today for a FREE benefits review!

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Content Creator at Pacific Prime Hong Kong
Jimmy is a content writer who helps simplify insurance for readers interested in international private medical insurance. He is on a mission in Thailand to support locals, expatriates, and businesses by bring the latest news and updates to his Pacific Prime blog articles.

His expert view and wealth of knowledge on insurance can also be found in his blogs for China, Dubai, Hong Kong, and Singapore.