When it comes to working or conducting business in Hong Kong, a thorough understanding of the Mandatory Provident Fund (MPF) contribution system is crucial.

Just as the Employment Ordinance outlines fundamental employment terms and conditions, the MPF scheme holds significant importance in securing financial stability and retirement benefits for employees, necessitating careful attention from both parties in Hong Kong.

To give you a closer look at the scheme, we’ve crafted an informative article that delves into MPF contributions in Hong Kong. This comprehensive resource will help employers and employees alike navigate the intricacies of this crucial financial safety net.

Overview of MPF Contribution in Hong Kong

To gain a deeper understanding of the contributions, it’s important to explore their origin and the intended purpose behind the establishment. Understanding this background can help both employers and employees view these contributions not just as mandatory requirements but as an essential financial security strategy.

The MPF contribution refers to the payments or contributions made by both employees and their employers into the retirement savings accounts within the MPF system in Hong Kong.

Before the creation of the MPF system, retirees relied heavily on government assistance, which was unsustainable in the long run.

To address this issue, on December 1, 2000, the government implemented the Mandatory Provident Fund Scheme with the goal of providing a secure and standardized retirement savings option for Hong Kong’s workforce. This initiative aimed to ensure people have better financial stability during their retirement years.

Key components of the MPF system in Hong Kong include:

The MPF Scheme Ordinance (MPFSO)

This is a set of rules and regulations that establishes the framework for the MPF system in Hong Kong, similar to the Employment Ordinance which governs the relationship between employers and employees in Hong Kong.

The MPF Authority (MPFA)

The MPF Authority is the regulatory body responsible for overseeing and regulating the MPF system. Its key functions include enforcing rules and regulations as per the MPFSO, approving and monitoring the performance of MPF funds, raising public awareness as well and developing policies to improve different aspects of the MPF scheme.

Approved trustees

Approved Trustees are financial institutions that are authorized by the MPFA to manage the contribution and MPF accounts on behalf of scheme members. These entities are responsible for various functions within the MPF system, including fund management, record-keeping, and member services.

The MPF Funds

MPF funds refer to the investment options offered within the MPF system. These funds are managed by Approved Trustees. Each Approved Trustee typically offers a range of MPF funds, each with its own investment strategy and asset allocation. The funds can include equity funds, bond funds, mixed asset funds, and other specialized options.

Employers and employees

Employers and employees play crucial roles in ensuring that the MPF system works effectively. The contributions made by both parties are invested in the MPF funds offered by their Approved Trustees. The returns and gains from these investments serve as a future source of income for employees during their retirement.

Purpose of creating the MPF system

The primary purpose of the MPF system is to ensure that individuals have a financial foundation upon retirement.

By mandating contributions, the system aims to cultivate a culture of saving and financial responsibility, which is crucial in a time when life expectancies are increasing, and the traditional family support system might not be as robust as in the past.

Benefits of joining the MPF contribution

The MPF system offers several benefits:

  • Financial security for retirement: It provides a financial cushion for individuals in their retirement years, reducing reliance on government welfare.
  • Compounded growth: The regular contributions, combined with investment returns, allow for compounded growth of the retirement fund.
  • Flexibility and choice: With different types of schemes and funds, individuals have the flexibility to choose according to their risk appetite and investment strategy.
  • Regulatory protection: The MPFA’s regulatory oversight ensures that the interests of members are protected, and the funds are managed efficiently and transparently.

How does the MPF system work in HK?

The MPF system operates with a set of defined rules and responsibilities for its participants. Here’s a deep dive into how the MPF works in Hong Kong, including eligibility, responsibilities, exemptions, and more.

Eligibility & exemption

The MPF contribution applies to all individuals aged 18 to 64, regardless of their employment status (full-time, part-time, casual, or contractual).

Both employees and employers are obligated to make contributions to the MPF for eligible workers.

However, certain groups are exempted from mandatory MPF participation, which includes:

Age exemptions: Individuals who are either under the age of 18 or over the age of 65 are not required to participate in the MPF scheme.

Low-Income exemption: When an employee’s monthly relevant income falls below a specified minimum threshold (e.g., HK$7,100 per month), both the employer and the employee are exempt from making MPF contributions for that month.

Non-resident workers: Non-resident workers in Hong Kong who earn income for services rendered outside Hong Kong are generally exempt from MPF contributions.

Domestic workers: Domestic employees, including babysitters, domestic servants, gardeners, and security guards providing residential security services exclusively within their employer’s residence, are exempt from the MPF requirement if they work exclusively within their employer’s residence.

Self-employed individuals: Self-employed individuals can voluntarily contribute to the MPF scheme, but they are not mandated to do so.

Statutory pension or provident fund coverage: Individuals who are already covered by statutory pension or provident fund schemes, such as civil servants and grant schoolteachers, are exempt from the MPF requirement.

Occupational retirement schemes: Members of occupational retirement schemes that have received MPF exemption certificates are also excluded from the MPF scheme.

Overseas workers: People from overseas who enter Hong Kong under section 11 of the Immigration Ordinance for employment lasting no more than 13 months or who are covered by overseas retirement schemes do not need to join the MPF scheme.

Specific industry exemptions: Some industries or specific categories of employees may have exemptions or variations in their MPF contribution requirements. For instance, employees of the European Union Office of the European Commission in Hong Kong are exempt from MPF participation.


The responsibilities under the MPF system are as follow:

Employer’s responsibility

  • Contribution: Employers are required to make contributions to the MPF scheme on behalf of their employees.
  • Enrollment: Employers have a legal obligation to ensure that eligible employees are enrolled in the MPF scheme, and they are responsible for the enrollment process.
  • Timely remittance: Employers are responsible for remitting these contributions to the selected MPF schemes within set deadlines, typically on a monthly basis.
  • Information provision: Employers must furnish employees with information related to the MPF and maintain accurate records of contributions.

Employee’s responsibility

  • Contribution: Employees are accountable for contributing a portion of their relevant income to their MPF accounts. This contribution is generally deducted from their salary by the employer and transferred to the chosen MPF scheme.
  • Investment choice: Employees have the freedom to select the specific MPF scheme where they want their contributions invested, based on their investment preferences and risk tolerance.
  • Monitoring: It is crucial for employees to regularly monitor their MPF contributions and account balances to ensure they are effectively saving for their retirement.

Self-employed persons

  • Voluntary contribution: Self-employed individuals have the option to voluntarily contribute to the MPF scheme.
  • Amount and frequency: They are responsible for determining the amount and frequency of their contributions.
  • Personal savings: Self-employed individuals can choose to make contributions to the MPF on their own behalf as a means of saving for their retirement.

Contribution of employer, employee, and self-employed

The contribution to the MPF scheme in Hong Kong is as follows:

Employer contributions

The standard contribution rate for employers is fixed at 5% of the employee’s relevant income, with a cap of HK$1,500 per month (whichever is lower).

If an employee’s monthly salary exceeds HK$30,000, the employer is only required to contribute a maximum of HK$1,500 to the employee’s MPF account.

Employee contributions

The employee’s contribution rate is set at 5% of their relevant income, with the same cap of HK$1,500 per month. This means that the maximum contribution an employee can make is HK$1,500 per month, regardless of their income.

The following table shows the specific rates of contribution of monthly-paid employees and their employers

Monthly relevant income (HK$)Amount of mandatory contributions
Employer’s contributionsEmployee’s contributions
Less than $7,100Relevant income × 5%Not required
$7,100 to $30,000Relevant income × 5%Relevant income × 5%
More than $30,000$1,500$1,500

For the rate of contribution to non-monthly employees, please refer to the MPF Non-monthly employee contribution.

In addition to the compulsory contributions, both employees and employers have the option to make additional contributions to the Mandatory Provident Fund to boost their retirement savings plan. They have the freedom to decide the amount they wish to contribute, as long as it falls within the limits established by the MPFA..

Self-employed contributions

Self-employed individuals are not subject to a fixed mandatory contribution rate, they have the option to voluntarily contribute to the MPF scheme. The amount and frequency of voluntary contributions are determined by the self-employed individual based on their own financial circumstances and retirement savings goals.

Contribution period

The contribution period for both employers and employees follows a monthly basis to ensure that contributions are consistently made and invested.

Contributions should be made by the 10th day of the subsequent month for the wages earned in the preceding month. For example, contributions for the wages earned in January should be made by the 10th day of February.

New employees have a contribution holiday for their first 30 days of employment. During this period, neither the employer nor the employee is required to make MPF contributions.

The first contribution becomes due within 10 days after the 60th day of employment for new employees. Once this initial contribution is made, the subsequent contributions for new employees will follow the same monthly basis as for existing employees.

Example of the contribution period:

Let’s consider a new employee named Jane, who begins her job on September 15th and receives her salary monthly. In this case:

  • Contribution holiday: Jane’s first 30 days of employment are considered a “contribution holiday”. During this period (from September 15th to October 14), neither Jane nor her employer is required to make contributions.
  • First contribution: After the 30-day contribution holiday, Jane’s first contribution becomes due within 10 days after the 60th day of her employment. In this case, the 60th day falls on November 14, 2023.
  • Contribution period: Jane’s first contribution covers the period from October 15 to November 14 (one month). Therefore, her first contribution should be remitted to the chosen MPF funds by November 24 (10 days after the 60th day of her employment).

Tax implications

MPF contributions can be tax deductible:

  • Employer’s tax deduction: Employers can claim a tax deduction for their contributions to the MPF, which is limited to 15% of the employee’s annual income.
  • Employee’s tax deduction: Employees can also deduct their MPF contributions from their taxable income, with a maximum limit of HKD 18,000.

Types of MPF Schemes in Hong Kong

In Hong Kong, there are several types of Mandatory Provident Fund schemes available to individuals.

You have the freedom to select from various MPF schemes provided by different Trustees, allowing you to align your choices with your investment objectives and risk tolerance.

Keep in mind that specific MPF schemes and their characteristics may change over time, so it’s essential to stay updated on your choices and any updates within the MPF system.

Here are some of the typical MPF scheme types:

Master trust scheme

Key features

Master Trust Schemes are the most common type of MPF schemes in Hong Kong. They are designed to pool contributions from various employers and scheme members together for administration and investment. This pooling aims to benefit from economies of scale, potentially leading to more efficient management and potentially better investment returns.

Who can apply

These schemes are open to a broad range of participants, including employers, employees, self-employed individuals, and individuals interested in establishing personal accounts or tax-deductible voluntary contribution (TVC) accounts.

Investment options

Within Master Trust Schemes in Hong Kong, participants can choose from a range of investment options, including different types of funds like equity funds, bond funds, mixed asset funds, and money market funds, among others. Each fund offers a specific balance of potential returns and associated risks.

Employer-sponsored scheme

Key features

An employer-sponsored scheme in Hong Kong is typically established by an employer for the benefit of its employees and, in some cases, for its subsidiaries or associated companies.

Who can apply

These schemes are solely accessible to the employees of the sponsoring employer. This includes full-time, part-time, and sometimes even casual or temporary employees. Depending on the design of the scheme, it may also cover employees of the sponsoring employer’s subsidiaries or associated companies.

The specifics of who is covered by an employer-sponsored scheme can vary from one scheme to another, so employees should refer to their employment contract or consult with their employer to understand the scope of coverage and benefits.

Industry Scheme

Key features

Industry scheme is a specialized type of MPF scheme designed to cater primarily to casual employees in specific industries.

These schemes are created to address the unique employment patterns and needs of workers in particular sectors, such as the catering and construction industries.

Who can apply

The eligibility criteria for industry schemes in Hong Kong may vary depending on the specific scheme and the industry it serves. However, in general, the following categories of businesses and employees can apply to industry schemes:

  • Catering industry: Businesses in the catering industry that hold food business licenses or permits are typically eligible to participate in industry schemes. This includes a wide range of food-related establishments, such as food factories, restaurants, school and workplace canteens, cooked food stalls in public markets, and more.
  • Construction industry: Various construction-related activities fall under this category, including foundation works, civil engineering, demolition, refurbishment, general building construction, and various specialized construction works.

How can employers enroll employees in the MPF scheme?

In order to make MPF contributions for an employee in Hong Kong, the employer must first enroll the employee in the MPF scheme. This enrollment process is applicable not only to new employees but also to existing employees who meet the eligibility criteria.

Employers who fail to enroll eligible employees in the scheme or who do not comply with the MPF enrollment requirements may face a maximum fine of HKD 350,000 and a potential prison sentence of up to three years.

Here’s a clear outline of the enrollment process:

Step 1: Gather the necessary information

To complete the employee’s enrollment, employers should gather the required information and complete an enrollment form. The form should include:

  • The selected MPF scheme
  • Personal details of the employee
  • Tax residency self-certification
  • Employee’s signature

If the employee fails to complete the enrollment form, it remains the employer’s responsibility to submit the form to the trustee before the deadline to fulfill their obligation.

Step 2: Submit information to the Trustee

Once the enrollment form is properly filled out, it should be submitted to the trustee responsible for managing the MPF scheme.

Step 3: Receive the Notice of Participation

Upon successful enrollment, the employee becomes a member of the MPF scheme. A notice of participation is then issued to the employee. This notice contains essential information, such as:

  • The specific MPF scheme in which the employee is enrolled
  • Name and address of the trustee
  • Name of the scheme member
  • Date of notice issuance

How do employers make MPF contributions?

Employers in Hong Kong can contribute to the MPF for their employees by following these 5 clear steps:

Step 1: Calculate the employee’s relevant income

Determine each employee’s relevant income, which encompasses wages, salaries, bonuses, commissions, and other forms of remuneration. Exclude overtime pay and severance payments from this calculation.

Step 2: Calculate the contribution amount

Calculate the mandatory contribution amount for each employee. Both employers and employees are required to contribute 5% of the employee’s relevant income, with a maximum monthly contribution of $1,500.

Step 3: Deduct the employee’s mandatory contribution

Deduct the employee’s mandatory contribution from their income. This deduction ensures that the employee’s share of the MPF contribution is withheld from their earnings.

Step 4: Remit the combined total

On or before the 10th calendar day of each month, transfer the combined total of both the employer’s and employee’s contributions to the MPF trustee. This timely payment ensures that the contributions are promptly deposited into the employee’s MPF account.

Step 5: Keep records

Maintain detailed records of the contributions made, including employee names, relevant income, contribution amounts, and payment dates. Accurate record-keeping is essential for compliance, audits, and providing employees with relevant information about their MPF accounts.

How to withdraw contributions from the MPF scheme?

Withdrawal at the age of retirement

Under the MPF Scheme Ordinance, members can initiate the withdrawal of their funds, which encompass both mandatory and tax-deductible voluntary contributions, upon reaching retirement age.

Withdrawal in parts

Members can opt for a phased approach to withdrawing their MPF savings, allowing them to manage their retirement funds flexibly. Trustees are required to permit at least four free withdrawals annually. Additional withdrawals may be subject to charges imposed by the trustee.

Withdrawal as a single amount

Alternatively, members can choose to receive their MPF savings as a single lump-sum payment if they prefer a one-time withdrawal.

To initiate an MPF withdrawal, members must submit a completed claim form and the necessary supporting documents, such as proof of identity for individuals aged 65 or older. It’s important to note that these documents should be submitted directly to their MPF trustee, not to the MPFA.

Members also have the option to leave their funds invested in the MPF scheme, allowing them to continue growing their retirement savings.

Withdrawal before reaching the age of retirement

Individuals in Hong Kong can access their MPF contributions before reaching the retirement age of 65 under specific conditions. These scenarios include:

  • Early retirement;
  • Permanently departure from Hong Kong;
  • Complete incapacity;
  • Terminal illness;
  • Having a small account balance; or
  • In the event of death, the beneficiaries can make a claim.

If you are in the mentioned circumstances and want to withdraw the MPF contribution early, here is the general procedure:

  • Ensure that you meet one of the specific scenarios that allow for early withdrawal.
  • Depending on the reason for early withdrawal, gather the necessary supporting documents. For example, provide evidence such as plane tickets, lease termination documents, and employment termination letters when leaving Hong Kong.
  • Inform the MPFA about your intention to make an early withdrawal. This notification is typically done by submitting the appropriate application form to the MPFA.
  • After submitting your application and supporting documents, await confirmation from the MPFA or the trustee regarding the approval and processing of your early withdrawal request.


In conclusion, the Mandatory Provident Fund (MPF) scheme in Hong Kong stands as a cornerstone of financial security and retirement planning for both employers and employees.

Understanding its intricacies, from contribution calculations to tax deductions, is essential for all stakeholders. By adhering to the MPF regulations and fulfilling obligations, individuals can pave the way for a more secure financial future, ensuring that retirement years are characterized by peace of mind and financial stability.

If you are planning to do business in Hong Kong, feel free to contact us via service@bbcincorp.com

Frequently Asked Questions

What is the minimum salary for MPF contribution in Hong Kong?

The minimum salary for MPF in Hong Kong is HK$ 7,100 per month.

What is the percentage of MPF contributions in Hong Kong?

The mandatory percentage of MPF in Hong Kong is 5%. The maximum contribution for employees earning over HK$30,000 per month is HK$1,500. Employees can choose to contribute more than 5% voluntarily.

What is the relevant income in MPF?

“Relevant income” in MPF refers to the income components that are considered for the calculation of MPF contributions. It includes various forms of remuneration that an employee receives from employment, such as wages and salaries, bonuses, commissions, allowances, and so on.

Let’s say an employee earns a monthly salary of HK$20,000, receives a year-end bonus of HK$ 10,000, and has no other income components.

Relevant Income = Monthly Salary + Year-end Bonus = HK$ 30,000

How can I make my MPF contribution voluntary?

To make voluntary MPF contributions, you can follow the steps below:

  • Determine if you are eligible to make voluntary contributions.
  • Get in touch with your MPF trustee to express your intent to make voluntary contributions
  • Decide how much you want to contribute voluntarily. You can contribute any amount you choose, subject to certain limits and regulations.
  • Fill out the voluntary contribution form and submit to the Trustee.

How to get your MPF contribution when leaving Hong Kong?

When leaving Hong Kong permanently or ceasing employment, you can apply to withdraw your MPF contributions. Here’s the general process:

  • Reach out to your MPF trustee to inquire about the withdrawal and fill out the withdrawal application form provided by your trustee.
  • Prepare any supporting documents that may be required, such as proof of your departure from Hong Kong (e.g., plane tickets, lease termination documents, employment termination letter)
  • Submit the completed withdrawal application form and supporting documents to your MPF trustee and await for results.
  • Once your withdrawal request is approved and processed, your MPF contributions, including both your contributions and your employer’s contributions, will be transferred to your designated bank account.

Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.

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