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Understanding Mandatory Provident Funds in Hong Kong.

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Understanding Mandatory Provident Funds in Hong Kong

This is a fundamental guide to understanding the Mandatory Provident Fund (MPF) in Hong Kong.

It is required that eligible employees in Hong Kong be registered under the Mandatory Provident Fund and contribute to the fund monthly.

What is the mandatory provident fund in Hong Kong?

The mandatory provident fund (MPF) in Hong Kong is a compulsory saving scheme or pension fund covering employees and self-employed individuals aged 18 to 64. The MPF intends to help Hong Kong’s workforce save up for their retirement.

Three types of mandatory provident funds

There are three types of MPF schemes in Hong Kong, which are:

  • Master Trust Schemes
  • Employer-sponsored Schemes
  • Industry Schemes
Scheme typeEligibilityCharacteristic
Master Trust SchemesOpen to employees whose employers participate in the scheme, self-employed individuals, and persons with accrued benefits to be transferred from other schemes.
Suitable for small- and medium-sized enterprises.
The most common type of MPF scheme.
Pools together contributions from different participating employers and employees and self-employed persons to enjoy economies of scale in investment and administration.
Employer-Sponsored SchemesOpen to employees of a single employer and associated company.
Suitable for large corporations
Cost-effective only for companies that have a large number of employees.
Industry schemesApplicable to employees of industries where the degree of labour mobility is high, i.e., the catering and construction industry and casual employees.Casual employees are not required to change the type of MPF scheme when they change jobs if they stay within the catering and construction industry, as long as the old and new employer are registered under the same industry scheme.

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Choosing the best scheme

Before choosing an MPF scheme, there are certain factors that you must consider, such as company stability, the risk level of funds, miscellaneous charges and customer support.

The seven funds under the Master Trust Scheme, which are the MPF Conservative Fund, Money Market Fund, Guaranteed Fund, Bond Fund, Mixed Assets Fund, Equity Fund and Index Fund, have different risk levels from relatively low risk to high risk.

You should choose the fund that is most appropriate for you as each type of fund has a different set of suitability requirements. More details on the funds can be read on the Mandatory Provident Fund Schemes Authority website.

Exempted persons

The following lists those who are not required to join the MPF scheme in Hong Kong:

  • Employees and self-employed individuals who are under the age of 18 and over 65 years old
  • Domestic employees, i.e., babysitters, domestic servants and gardeners who render their services at the employer’s house and security guards employed by an individual to provide security services for his/her residential premises
  • Self-employed hawker
  • People covered by statutory pensions or provident fund schemes, such as civil servants and grant schoolteachers
  • Members of occupational retirement schemes which have been granted MPF exemption certificates
  • People from overseas who enter Hong Kong under section 11 of the Immigration Ordinance for employment of not more than 13 months or are covered by overseas retirement schemes.
  • Employees of the European Union Office of the European Commission in Hong Kong

How to enrol employees

Employers are required to enrol both full-time and part-time employees ages 18 to 64 within 60 calendar days of the employment. An employee’s probation period is also included within 60 days.

If the 60th day falls on a weekend or public holiday, the deadline is extended to the next day.

To enrol the employee, an enrolment form must be submitted with the following information:

  • The MPF scheme chosen
  • Personal particulars
  • Tax residency self-certification
  • Employee’s signature

After completing the form, you will need to submit the form to your trustee to set up the MPF account.

Once the enrolment has been approved and the employee is a member of the MPF scheme, a notice of participation will be issued to the employee, which will include the following information:

  • MPF scheme in which the member enrolled
  • Trustee’s name and address
  • Scheme member name
  • Notice issuance date

If the employee does not complete the enrolment form, the employer will still need to submit the form to the trustee before the deadline to fulfil an employer’s obligation.

In case that the employer fails to submit the enrolment form on the 60th day, the employer is liable to a maximum fine of HKD 350,000 and imprisonment of three years.

Employer contribution to the mandatory provident fund

Employers and employees must contribute 5% of the employee’s relevant income to the MPF scheme.

Even if the income is less than the minimum relevant income (HKD 7,100), it is still required to contribute to the MPF. The contribution for income exceeding the maximum income level (HKD 30,000) will be capped at HKD 1,500.

The rates for the MPF contribution are the following:

Monthly relevant income (HKD) Employer’s contribution (HKD) Employee’s contribution (HKD)
Less than 7,100Relevant income x 5%Not required
7,100 –30,000Relevant income x 5%Relevant income x 5%
More than 30,0001,5001,500

MPF contribution calculation

Examples of calculating the MPF are as follows:

  1. Elizabeth earns HKD 17,000 a month and will need to contribute HKD 850 (5%) of the salary. The employer also needs to contribute 5% (HKD 850) of Elizabeth’s salary.
  2. Robert receives a salary of HKD 53,000 a month; the MPF contribution of Robert and his employer will be HKD 1,500 each.

When to start making contributions?

Contributions must be made on the 10th day of the following month.

New employees who have not yet been employed for more than 60 days will be under a contribution holiday.

The first contribution should be paid to the trustee on or before the 10th, after the last day of the calendar month which the 60th day of employment falls.

Tax deductions on MPF contributions

Employers can claim a tax deduction from the MPF contributions made for an employee to the extent that it does not exceed 15% of the employee’s annual income.

Employees can claim deductions for contributions made to the MPF scheme of a maximum of HKD 18,000.


The contribution to the MPF in Hong Kong is 5% of the employee’s income and is capped at HKD 1,500 for any income that exceeds HKD 30,000. Contributions must be made on the 10th day of every month or the next day if the 10th falls on a weekend or public holiday. If you need any additional advice, feel free to contact Acclime.

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