What is the MPF contribution rate for employers and employees

The MPF Contribution Rate in Hong Kong Explained

The Mandatory Provident Fund Schemes Ordinance requires a 5% contribution from both employer and employee to a Mandatory Provident Fund scheme. This statutory rate applies to every enrolled employee.

MPF Employer Contribution

Contribute 5% of the employee's monthly relevant income to their MPF scheme. This obligation applies regardless of the employee's income level. Enrol new employees within 60 days of their start date. Calculate the contribution on the employee's relevant income, which encompasses wages, salary, leave pay, fees, commissions, bonuses, gratuities, and other allowances paid or payable by the employer.

MPF Employee Contribution

The employee also contributes 5% of their monthly relevant income. Deduct this amount from their wages and remit it with the employer's contribution to the MPF trustee.

MPF Contribution Cap

Contributions are calculated on relevant income up to a maximum of HK$30,000 per month. The maximum mandatory contribution from each side is therefore HK$1,500 per month (5% of HK$30,000). If the employee's relevant income exceeds HK$30,000, the mandatory contribution remains capped at HK$1,500 from each party. Employers may make additional voluntary contributions above this cap.

Relevant Income MPF

Relevant income is the basis for calculating MPF contributions. It includes all cash payments made by the employer to the employee in connection with employment, such as wages, commissions, bonuses, and overtime pay. It excludes certain payments like severance pay, long service pay, or end-of-year payments where these are paid on termination of employment.

Where an employee's monthly relevant income is below HK$7,100, no employee contribution is required. The employer still contributes the 5% even when income falls below this threshold. Relevant income is capped at HK$30,000 for contribution calculation purposes, and the contribution from each side is capped at HK$1,500 per month.

Monthly Contribution Calculation Example

For an employee earning HK$20,000 in monthly relevant income, the monthly contribution is HK$1,000 from the employer (5%) and HK$1,000 from the employee (5%), totalling HK$2,000 paid to the MPF scheme each month. If the employee earns HK$6,000, the employer contributes HK$300 (5%) and the employee makes no contribution required because the income is below the HK$7,100 threshold.

Practical Points for Employers

• Calculate contributions on the employee's relevant income each contribution period, typically monthly.
• Remit both employer and employee contributions to the MPF trustee within the statutory deadlines.
• Keep records of contributions and relevant income calculations for compliance purposes.
• The MPF contribution cap and threshold figures are reviewed periodically and may be adjusted.