What is Employee Mandatory Contributions?
In Hong Kong, except for persons exempted under the Mandatory Provident Fund Schemes Ordinance, full-time and part-time employees, as well as self-employed persons, must participate in the MPF scheme. Both the employee and the employer must contribute to the Mandatory Provident Fund (MPF) account respectively. Contribution of 5% of relevant income, different types of employees have different contribution methods and are limited by the minimum and maximum relevant income levels.
The importance of Employee Mandatory Contributions
Hong Kong is facing the challenge of a rapidly aging population. As the overall population ages, future workers will have to support more retirees. On December 1, 2000, the Mandatory Provident Fund System was officially implemented, which included mandatory employee contribution requirements for the purpose of saving for the retirement life of employed people. Employee mandatory contribution is one of the important financial sources for plan members’ retirement life, and is also an important part of Hong Kong’s retirement protection system.
Benefits of Employee Mandatory Contributions
The MPF can help wage earners make early preparations for retirement life through joint regular contributions by employers and employees, provide protection for wage earners’ retirement life, and increase retirement savings. Employees’ mandatory contributions help employees prepare for the future as soon as possible. Employees’ MPF contributions are also a manifestation of Hong Kong residents’ being prepared for danger in times of crisis and preparing for a rainy day.
Employee Mandatory Contributions calculation
For monthly salaried employees, the current minimum and maximum relevant income levels are HK$7,100 and HK$30,000 respectively.
|Monthly Relevant Income||Employer Mandatory Contribution||Employee Mandatory Contributions|
|Below HK$7,100||5% of the relevant income||no contribution required|
|HK$7,100 – 30,000||5% of the relevant income||5% of the relevant income|
The contribution period is around the corner, how to make contributions to the MPF scheme for different types, different ages, and new employees at the same time?
Through the Workstem Mandatory Provident Fund function module, the system marks the omissions of the MPF plan registration according to the employee’s entry time, closely following the employment regulations, and at the same time, the monthly contribution amount of both employers and employers is included in the salary calculation process;
When backing up information related to insurance benefits, you can also check the complete and detailed employee contribution records in the system, and realize the MPF reports of Manulife MPF, HSBC MPF, BOC MPF, Sunlife MPF, and AIA MPF companies with one-touch export.
Join Workstem now, get rid of a series of MPF Hong Kong calculation problems caused by too many employees and messy information, and let the focus return to business.