How to Calculate the Amount of MPF Contributions for Non-monthly-paid Employees?

For employers, it is easier to calculate the amount of MPF for employees with a monthly salary. If the monthly salary is more than HK\$30,000, the employer’s amount of mandatory contribution is fixed at HK\$1,500. For employees whose salary is less than HK\$30,000, 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 HK\$1,000 per day and the minimum income level is HK\$280 per day. If it is calculated on the basis of one week, if the employee’s relevant income exceeds HK\$7,000 in one week, the employer will make a fixed amount of contribution of HK\$350, and if it is less than HK\$7,000, it will be calculated on the basis of the actual salary multiplied by 5%.

 Weekly Relevant Income  of Employee Employer’s Mandatory Contribution Employee’s Mandatory Contribution Less than HK\$1,960 Relevant income x 5% No contribution is required HK\$1,960-HK\$7000 Relevant income x 5% Relevant income x 5% More than HK\$7,000 HK\$350 HK\$350

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

Example 1

Mr. Lau is a part-time employee. He works 3 days a week, every Monday, Wednesday and Friday. The daily wage is HK\$400 and the wage period is one week. Therefore, his relevant income is HK\$400 x 3 = HK\$1,200. According to the guidelines of the MPFA, it can be calculated that the minimum relevant income level of weekly income is HK\$280 x 7 = HK\$1,960 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 HK\$1,200 x 5% = HK\$60

 Weekly Relevant Income  of Mr. Lau Mandatory Contribution Employer’s Contribution Employee’s Contribution HK\$400×3=HK\$1,200 HK\$1,200×5%=HK\$60 No contribution is required (Less than HK\$1,960)

Example 2

Miss Wong is a part-time employee. She works 3 days a week, Monday, Tuesday, Wednesday and Friday. The daily wage is HK\$600 and the wage period is one week. Therefore, her relevant income is HK\$600 x 4 = HK\$2,400. According to the guidelines of the MPFA, it can be calculated that the minimum relevant income level of weekly income is HK\$280 x 7 = HK\$1,960 and the maximum relevant income level is HK\$1,000 x 7 = HK\$7,000. Miss Wong is between the maximum and minimum levels, therefore, she and her employer are required to make contributions, each paying HK\$2,400 x 5% = HK\$120.

 Weekly Relevant Income  of Miss Wong Mandatory Contribution Employer’s Contribution Employee’s Contribution HK\$600×4=HK\$2,400 HK\$2,400×5%=HK\$120 HK\$2,400×5%=HK\$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.