How Can Osome Help You Manage MPF Contributions for Your Hong Kong Employees?

The Mandatory Provident Fund (MPF) is a compulsory pension scheme set up by the Hong Kong government. All regular, casual, and self-employed persons aged 18 to under 65 must join an MPF scheme. Osome can help employers set up MPF accounts and manage contributions for their staff.

Key Benefits of MPF:

• Provides a tax-efficient way to save for retirement. Contributions made by both employer and employee are tax-deductible.
• Portable: Employees can transfer their MPF account when changing jobs.
• Coverage details are available on the MPFA website.

Mandatory Contribution Rates:

• Monthly income below HK$7,100: Employer contributes 5%, employee does not contribute.
• Monthly income between HK$7,100 and HK$30,000: Employer and employee each contribute 5%.
• Monthly income above HK$30,000: Employer and employee each contribute a maximum of HK$1,500.

Requirements for Employer Contributions:

• Employee must be hired first and employed in Hong Kong.
• First contribution is due after 60 days of employment.
• Eligibility depends on where the employment contract was signed, where salary is paid (only payments through HK bank accounts count), and where the employee carries out their duties.
• MPF holiday may apply if the employee has not completed a full month of employment.

MPF Withdrawal Rules:

• Employees above 65 can withdraw their MPF.
• Employees below 65 may withdraw if permanently leaving Hong Kong, suffering from a terminal illness, or having outstanding debts that creditors can claim against MPF savings.
• Withdrawals are typically processed within a few weeks of application.