Mandatory Provident Fund (MPF)

Mandatory Provident Fund (MPF) is a retirement scheme introduced on December 1, 2000. This scheme covers all employees aged over 18 and under 65 with exemptions. An employer must comply with all MPF-related legal obligations under the law. These include enrolling all qualifying employees in MPF schemes and making MPF contributions for them. Employers and employees must both contribute five percent of the employee’s relevant income to the MFP, subject to the minimum and maximum relevant income levels.

For a monthly-paid employee, the current minimum and maximum relevant income levels are HK$7,100 and HK$30,000 respectively. Please note that the figures may vary from year to year according to the government policy.

Mandatory Contributions Payable by Employer and Employee by Monthly Relevant Income

Monthly relevant Income

Amount of mandatory contributions payable by employer

Amount of mandatory contributions payable by employee

Less than HK$7,100

Relevant income x 5%

No contributions required

HK$7,100 to HK$30,000

Relevant income x 5%

Relevant income x 5%

More than HK$30,000



“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.

Both employees and employers are free to make voluntary contributions in addition to mandatory contributions.

An employee can claim tax deduction for the employee’s mandatory contributions made to an MPF scheme, subject to the maximum amount of HS$18,000 for the year of assessment 2015/16 and each subsequent year of assessment. And employees can claim tax deductions for their voluntary contributions made to an MPF scheme, subject to the maximum amount of HK$60,000 for the year of assessment 2019/20 and each subsequent year of assessment. 

[tips title="Did You Know"]Employers can claim tax deductions for the mandatory and voluntary contributions made for their employees, to the extent that they do not exceed 15 percent of the employee’s total remunerations.[/tips]

Besides MPF, there is another pension scheme under Occupational Retirement Schemes Ordinance (ORSO), which operates on a voluntary basis. However, if an employer offers both ORSO scheme and MPF scheme, it must provide options to existing members and new eligible staff, if applicable, to choose between the two schemes.

Employee’s Compensation Insurance (EC)

Under the Employee’s Compensation Ordinance, employers in Hong Kong are obliged to hold an employee’s compensation insurance policy to cover their liability to compensate employees for “injury by accident” or “death” arising during the normal course of their work, irrespective of the length of employment contract or working hours, full time or part time employment.

The amount of the liability which must be insured is determined by reference to the total number of the employer’s employees:

Number of employees

Amount of the liability which must be insured per event

Not more than 200

Not less than HK$100 million

More than 200

Not less than HK$200 million

The minimum amount of insurance cover is not the maximum liability that the party concerned is required to bear. The employer should therefore carefully assess the possible risk and consult insurers for professional advice on whether an insurance policy for an amount more than the minimum should be taken out. An employer shall not make any deduction from the earnings of an employee in order to defray the cost of insuring against their liability to pay compensation.


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