For employers, it is easier to calculate the amount of MPF for employees with a monthly salary. If the monthly salary is more than $30000, the employer’s amount of mandatory contribution is fixed at $1500. For employees whose salary is less than $30000, the amount of mandatory contribution is also fixed, based on the monthly salary multiplied by 5%.
Some part-time employees (not in the construction industry and catering industry) are paid daily or weekly salary instead of one month, and some of them are paid half a month. Is this the same as the monthly salary of employees, calculated on the basis of minimum / maximum income and the monthly salary multiplied by 5%?
According to the MPFA, if the employee’s wage period is shorter than one month, the relevant maximum income level is $1000 per day and the minimum income level is $280 per day. If it is calculated on the basis of one week, if the employee’s relevant income exceeds $7000 in one week, the employer will make a fixed amount of contribution of $350, and if it is less than $7000, it will be calculated on the basis of the actual salary multiplied by 5%.
Therefore, what employers need to do is:
- Calculate the maximum and minimum relevant income levels(multiple the daily maximum and minimum relevant income levels by the number of days of that wage period)
- Check whether the employee’s relevant income is more than or less than the minimum relevant income level for that wage period
- Check whether or not an employee is required to make contributions for a wage period
Mr. Lau is a part-time employee. He works 3 days a week, every Monday, Wednesday and Friday. The daily wage is $400 and the wage period is one week. Therefore, his relevant income is $400 x 3 = $1200. According to the guidelines of the MPFA, it can be calculated that the minimum relevant income level of weekly income is $280 x 7 = $1960 Therefore, he is below the minimum relevant income level, and no need to make a contribution. However, the employer needs to make a contribution, paying $1200 x 5% = $60
Miss Wong is a part-time employee. She works 3 days a week, Monday, Tuesday, Wednesday and Friday. The daily wage is $600 and the wage period is one week. Therefore, her relevant income is $600 x 4 = $2400. According to the guidelines of the MPFA, it can be calculated that the minimum relevant income level of weekly income is $280 x 7 = $1960 and the maximum relevant income level is $1000 x 7 = $7000. Miss Wong is between the maximum and minimum levels, therefore, she and her employer are required to make contributions, each paying $2400 x 5% = $120.
If the company has employees in different wage periods, the payday and the pay items are also different. The payroll function of Workstem can calculate and pay employees with different wage periods. The payroll process from calculation to payment can be done in only one platform without using spreadsheets to do the tedious manual work.
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(The article on this website is intended to be for reference and general information purposes only. Workstem does not warrant or represent that such information is complete, accurate or up to date. It should not be treated as a complete and authoritative statement of law or court practice, or a substitute for professional legal advice.)