MPF

MPF or Mandatory Provident Fund is a compulsory saving scheme for the employees of most companies in Hong Kong. As a self-employed person, it is really necessary to enroll yourself in this fund. The system was created as a safety mechanism for everyone in Hong Kong. So by retirement , everyone has some kind of money saved and that self-reliance isn’t an issue. It is only in your interest and benefit that you must apply for MPF. Furthermore, as an employer you need to file for MPF twice. Since its legally obligatory for you as an employer to provide MPF to all your employees, so that they benefit from the scheme too.

There are three types of MPF Schemes:

1. Master Trust Scheme

Where number of employers,self-employers and employees coordinate and contribute together a fund, which is normally known for its economic features

2. Employee-Sponsored Scheme

For Huge companies, which can afford to have their own private fund

3. Industry Scheme

Usually for casual employees, working for a shorter period of time. If their previous and new employers are both registered with the same scheme, they won’t need to change schemes

Some tips for applying:

  • As an employer it is a legal offense not to apply for MPF for your employees

  • Also, you would be the one making the required minimum contribution plus whatever extra your employee wants and it should be done before the 10th of each month and thereafter you can deduct that amount from his salary

  • Delay in payment of the contribution will lead to an objection and a 5%surcharge on that amount.

  • It would be a huge benefit for you, if you can go in depth of the various schemes available by various banks and choose the one which suits you the most. And, we have found you a great website for analysis

  • If an employer resigns or gets terminated, you must transfer his “Grown” Contributions into a private/new MPF Scheme

  • Also and most importantly MPF is a great way for tax as long as the contribution is less than 15% of their salary

  • For foreign employees, they are exempted from MPF, unless they're working for more than 13 months in HK

For more information log on to http://www.mpfa.org.hk

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