The Mandatory Provident Fund (MPF) is Hong Kong's compulsory retirement savings system, introduced in 2000. Every employer in Hong Kong must enrol eligible employees, deduct their contribution from payroll, add the employer's own contribution, and remit both to an approved MPF trustee each month.
This guide covers who must contribute, the exact rates and income thresholds, which employees are exempt, the 3 types of MPF schemes, tax deductions, withdrawal rules, and what changed in 2025. For the broader employer compliance calendar, see our annual requirements guide.
Highlights of this article
- MPF applies to employees and self-employed persons aged 18 to 64, with exceptions for civil servants, domestic helpers, short-stay expatriates, and others.
- Both employer and employee contribute 5% of the employee's relevant income per month. The minimum relevant income is HKD 7,100/month; the maximum is HKD 30,000/month (so the maximum mandatory contribution is HKD 1,500 per side per month).
- Employees earning below HKD 7,100/month do not contribute, but employers must still contribute 5% of their wages.
- New employees have a 60-day contribution holiday. First contributions are due by the 10th of the month after the 60th day.
- From 1 May 2025, mandatory MPF contributions made on or after that date cannot be used to offset severance or long service payment obligations.
- Employees can deduct up to HKD 18,000/year in mandatory MPF contributions from their Salaries Tax assessment.
Who must enrol in MPF
MPF is mandatory for employees and self-employed persons aged 18 to 64. Employers must enrol every eligible employee within 60 days of their employment start date.
Who is exempt from MPF
| Exempt group | Reason |
|---|---|
| Civil servants and judicial officers | Covered by government provident fund or pension |
| Teachers in grant schools | Covered by statutory pension schemes |
| Members of ORSO schemes | Already covered by Occupational Retirement Schemes Ordinance |
| Expatriates employed for 13 months or fewer | Short-stay exemption |
| Expatriates who are members of a foreign retirement scheme | Already covered |
| Domestic employees | Excluded by ordinance |
| Self-employed hawkers | Excluded by ordinance |
| Employees under 18 or aged 65 and above | Age bracket exclusion |
| Persons employed for fewer than 60 days (excluding casual employees) | Below threshold |
The 3 types of MPF schemes
| Scheme | Who joins | Best for |
|---|---|---|
| Master Trust Schemes | Employees, self-employed, and those transferring from other MPF schemes | Small and medium-sized businesses (pooled funds reduce fees) |
| Employer-Sponsored Schemes | Employees of one employer and its associated companies | Large corporations wanting a single scheme across the group |
| Industry Schemes | Employees in the catering and construction industries | High-turnover roles and casual workers who move between employers frequently |
Employees in catering and construction can stay in the Industry Scheme regardless of which employer they work for within the sector, eliminating the need to transfer funds on each job change.
Contribution rates and income thresholds
Both employer and employee contribute at 5% of the employee's relevant income per month.
Monthly-paid employees
| Monthly relevant income (HKD) | Employer contribution | Employee contribution |
|---|---|---|
| Below 7,100 | 5% of actual wages | Not required |
| 7,100 to 30,000 | 5% of actual wages | 5% of actual wages |
| Above 30,000 | HKD 1,500 (capped) | HKD 1,500 (capped) |
Key point: Employees earning below HKD 7,100/month are not required to contribute, but the employer must still pay 5% of the employee's actual wages into their MPF account.
Daily-paid employees
| Daily relevant income (HKD) | Employer | Employee |
|---|---|---|
| Below HKD 280 | 5% of actual daily wages | Not required |
| HKD 280 to HKD 1,000 | 5% of actual daily wages | 5% of actual daily wages |
| Above HKD 1,000 | HKD 50/day (capped) | HKD 50/day (capped) |
Self-employed persons
Self-employed persons must contribute 5% of their relevant income, subject to the same thresholds:
- Below HKD 7,100/month (or HKD 85,200/year): no contribution required
- HKD 7,100 to HKD 30,000/month: 5% of relevant income
- Above HKD 30,000/month: HKD 1,500/month cap
Self-employed persons may choose to pay monthly or annually.
What counts as relevant income
Relevant income includes:
- Salary, wages, commissions, bonuses, and gratuities
- Paid leave allowances (annual leave, sick leave, compassionate leave)
- Cash allowances (housing, transport, meals)
- Employer-collected tips and service charges
The following are not relevant income for MPF purposes:
- Severance payment or long service payment
- Maternity leave pay (the statutory portion)
- Reimbursements of business expenses
Payment deadlines
- First contribution: Due by the 10th of the month after the 60th day of employment
- Ongoing contributions: Due by the 10th of each following month
- Example: If the 60th day of employment falls in March, the first MPF contribution is due by 10 April
Failure to pay on time results in a surcharge of 10% per annum on the outstanding amount, plus potential prosecution under the Mandatory Provident Fund Schemes Ordinance. For a detailed breakdown of all MPF contribution deadlines and remittance procedures, see our MPF payments guide.
The 2025 MPF offsetting abolition
From 1 May 2025, employers can no longer use mandatory MPF contributions made on or after that date to reduce their severance payment or long service payment obligations.
Before 1 May 2025: Employers could subtract mandatory MPF contributions from the severance or long service payment amount owed.
From 1 May 2025: That offset is abolished for the post-transition accrued portion. Pre-May 2025 contributions can still offset the pre-transition amount under transitional rules.
This significantly increases the effective cost of redundancy for companies that previously relied on MPF accruals to meet most of their SP/LSP obligations. For full details, see our severance payment guide.
Tax deductions on MPF contributions
For employees (Salaries Tax)
Mandatory MPF contributions are deductible from assessable income for Salaries Tax purposes, up to a maximum of HKD 18,000 per year.
For employers (Profits Tax)
Employers can deduct mandatory MPF contributions from their assessable profits. The deductible amount is capped at 15% of the employee's annual relevant income. For all employer tax obligations including profits tax and Employer's Return, see our Hong Kong corporate tax guide.
For self-employed persons
Self-employed persons can deduct mandatory MPF contributions from their assessable profits for Profits Tax purposes, up to the applicable cap.
Early withdrawal conditions
MPF funds are generally locked until age 65. Early withdrawal is permitted only in specific circumstances:
- Retirement at age 60 (early retirement)
- Permanently leaving Hong Kong
- Total incapacity or terminal illness
- Account balance of HKD 5,000 or less with no contributions for 12 or more consecutive months
- Death (funds paid to the estate)
What employers must do
Step 1: Register with an approved MPF trustee
Before you can enrol employees, your company must be registered with an MPFA-approved trustee. There are currently 10 approved trustees operating in Hong Kong, including HSBC, Manulife, AIA, and Sun Life. Compare their fund options and administration fees before selecting a scheme. Once registered, the trustee will provide your employer account number and contribution submission procedures.
Step 2: Enrol employees within the required timeframe
Enrol every eligible employee within 60 days of their employment start date. Eligible means aged 18 to 64 and not in an exempt category. The trustee provides enrolment forms. Keep a copy of each completed enrolment form in the employee's HR file. Failure to enrol on time is a breach of the Mandatory Provident Fund Schemes Ordinance and can result in prosecution.
Step 3: Calculate contributions each payroll period
Each month, calculate the mandatory contribution for each enrolled employee based on their relevant income. Apply the 5% rate. Use the actual wage figure for employees earning between HKD 7,100 and HKD 30,000. Cap the contribution at HKD 1,500 per party for employees earning above HKD 30,000. For employees earning below HKD 7,100, calculate only the employer's 5% share. Deduct the employee's contribution from gross wages before payment.
Step 4: Remit contributions within 10 working days
Submit both the employer and employee contributions to the MPF trustee by the 10th of the following month (or within 10 working days after the end of the contribution period). For the very first contribution period, the deadline is the 10th of the month after the 60th day of employment. Missing the deadline triggers an automatic surcharge of 10% per annum on the outstanding amount. The MPFA can also prosecute employers for persistent late remittance.
Step 5: Keep contribution records for 7 years
Retain a complete record of all MPF contributions for each employee for at least 7 years. Records must include the contribution amount, the relevant income figure used for the calculation, the remittance date, and the trustee confirmation receipt. Issue a contribution statement to the employee each contribution period so they can verify the amount credited to their account. The MPFA and IRD may request contribution records during inspections or audits.
Your company secretary can help with the initial company setup and compliance framework. MPF administration is typically managed by your payroll provider or accountant. For the full list of employer obligations, see our annual requirements guide. For the broader picture of statutory employee entitlements including leave, minimum wage, and maternity pay, see our employee compensation guide.
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