Calculating, Deducting and Remitting Contributions

Employers and employees are each required to make regular mandatory contributions of 5% of the employee’s relevant income to an MPF scheme, subject to the minimum and maximum relevant income levels. For a monthly-paid employee, the minimum and maximum relevant income levels are $7,100 and $30,000 respectively. The table below shows the amount of mandatory contributions for you and your employees.

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

The current minimum relevant income level of $7,100 per month applies to contribution periods commencing on or after 1 November 2013 while the current maximum relevant income level of $30,000 per month applies to contribution periods commencing on or after 1 June 2014.

“Relevant income” refers to all monetary payments paid or payable by an employer to an employee, including wages, salary, leave pay, fees, commissions, bonuses, gratuities, perquisites or allowances, but excluding severance payments or long service payments under the Employment Ordinance (Chapter 57, Laws of Hong Kong).

You are required to calculate your employee’s relevant income and the amount of mandatory contributions for each contribution period (wage period), deduct the amount from the employee’s income as their mandatory contributions, and remit to the MPF trustee the employee’s contributions, together with the employer’s contributions from your own funds.

The mandatory contributions for a contribution period should be remitted to your MPF trustee on or before the contribution day. Generally, for monthly-paid employees, the contribution day is the 10^th day of each month. For example, the contributions for the contribution period of September should be paid to your trustee on or before 10 October. For the contribution day of each month in this year, please refer to the “MPF Contribution Days” Calendar.

Penalty for Non-compliance
The MPFA will issue a “surcharge notice” to a defaulting employer to impose a 5% surcharge on default contributions. The surcharge received goes entirely to the employee’s MPF account.

Defaulting on contributions is a criminal offence and the defaulter is liable to a maximum penalty of a $450,000 fine and imprisonment for four years. The MPFA can also impose a financial penalty of $5,000 or 10% of the default amount, whichever is greater, on the defaulting employer.