The Mandatory Provident Fund is Hong Kong’s statutory retirement savings system. If you employ anyone aged 18 to 64 in Hong Kong, you contribute 5% of their relevant income and deduct another 5% from them — subject to a floor of HK$7,100 and a ceiling of HK$30,000 a month, which caps each side at HK$1,500.
That headline is the easy part. What catches employers out is the timing: when your first contribution is actually due for a new hire, why the employee pays nothing for their first month while you pay from day one, and which payments count as relevant income in the first place. This covers all of it.
How Much You Contribute
For monthly paid employees, the MPFA sets the minimum and maximum relevant income levels at HK$7,100 and HK$30,000 (verified August 2026).
| Monthly relevant income | You contribute | Employee contributes | Worked example |
|---|---|---|---|
| Under HK$7,100 | 5% of income | Nothing | At HK$6,000: you pay HK$300, employee pays HK$0 |
| HK$7,100 to HK$30,000 | 5% of income | 5% of income | At HK$25,000: HK$1,250 each |
| Over HK$30,000 | HK$1,500 (capped) | HK$1,500 (capped) | At HK$45,000 or HK$200,000: still HK$1,500 each |
Note the asymmetry at the bottom of the scale: below HK$7,100 the employee contributes nothing but you still contribute. Payroll systems configured to deduct 5% from both sides will over-deduct from your lowest-paid staff.
The cap applies to mandatory contributions only. If a contract promises additional retirement benefits, track those separately. For total employment cost including MPF, NNRoad’s Hong Kong labour cost calculator works it out for a specific salary.
Weekly and Daily Paid Employees
If you pay daily, weekly or bi-monthly, the monthly thresholds don’t apply. You scale a daily minimum of HK$280 and daily maximum of HK$1,000 by the number of days in the wage period.
For a weekly paid employee that means a floor of HK$1,960 (HK$280 × 7) and a ceiling of HK$7,000 (HK$1,000 × 7). Below the floor, the employee contributes nothing and you still pay 5%. Above the ceiling, both sides contribute 5% of the ceiling rather than of actual income.
This matters most in catering, retail and construction, where weekly and daily pay cycles are common and a monthly-thresholds assumption produces the wrong figure every period.
Who Must Be Enrolled
Employees aged 18 to 64 employed for a continuous period of 60 days or more, unless specifically exempt. Part-time status does not remove the obligation, and MPFA enrolment rules require you to enrol eligible employees within the first 60 days of employment.
| Worker type | Treatment | What to do |
|---|---|---|
| Full-time, 18–64 | Covered | Enrol within the first 60 days of employment |
| Part-time, 18–64 | Usually covered | Part-time status alone is not an exemption |
| Casual, construction or catering | Special rules | Industry Scheme rules may apply from day one. No contribution holiday, and contributions are due within 10 days of each contribution period |
| Foreign employee | May be exempt | Exempt if covered by an overseas retirement scheme, or permitted to remain 13 months or less. Reassess if a visa is extended |
| Domestic helper | Outside MPF | Other employment obligations may still apply |
The foreign-employee exemption is conditional, not automatic, per MPFA employer guidance. If a permitted stay is later extended beyond 13 months, MPF obligations can begin once the exemption stops applying. Work authorisation and MPF exemption are related questions but not the same one — companies hiring non-local staff can review Hong Kong foreign hire support alongside payroll setup.
When Your First Contribution Is Due
This is the single most misunderstood part of MPF, and it has two moving pieces that work differently.
Your contributions run from the employee’s first day. No holiday, no grace period. The employee’s contributions don’t. New employees get a contribution holiday covering their first 30 days, plus the incomplete wage period immediately following it.
So the first payslip for a new hire will typically show an employer contribution and no employee deduction. A payroll system that deducts 5% from both sides from day one is over-deducting.
Worked example. An employee starts on 5 June, paid monthly.
Their 30-day contribution holiday runs 5 June to 4 July. Because the 30th day falls in July, the holiday extends to the end of July — the incomplete wage period that follows. So no employee deduction for June or July.
Their first employee deduction is for August. Meanwhile your contributions are calculated from 5 June throughout.
Then there’s the payment deadline itself, which is separate again. For a new hire, your first contribution is due on or before the contribution day following the calendar month in which the 60th day of employment falls. Not within 60 days — the contribution day after the month containing the 60th day.
Enrolment and first payment are therefore two different deadlines. Enrol within 60 days; pay by the contribution day after the month the 60th day lands in.
What Counts as Relevant Income
Relevant income means all monetary payments from employer to employee — wages, salary, leave pay, fees, commissions, bonuses, gratuities, perquisites and allowances. Severance payments and long service payments are specifically excluded.
Two principles resolve most edge cases: cash counts, benefits in kind generally don’t, and reimbursing a genuine work expense isn’t income.
| Payment | Counts? | Why |
|---|---|---|
| 13th month pay / double pay | Yes | Contractual monetary pay |
| Bonus, discretionary or performance-linked | Yes | Both types count |
| End-of-contract gratuity | Yes | Despite arriving at the end of employment |
| Cash allowance | Yes | Cash the employee may spend freely |
| Paid leave (annual, sick, marriage, compassionate) | Yes | Leave pay is income |
| Tips collected by the employer and distributed | Yes | Includes service charges and card tips |
| Tips left directly for staff | No | No employer involvement |
| Cash car allowance (fuel, maintenance, licence fees) | Yes | Cash payment for the employee’s benefit |
| Free use of a company car, transport passes, parking coupons | No | Non-monetary benefit |
| Reimbursed work expenses (training, uniform laundry, phone, professional fees) | No | Keep documentation showing the reimbursement nature |
| Payment in lieu of notice | No | Falls outside the definition of relevant income |
| Severance and long service payment | No | Specifically excluded by statute |
| Share options, and gains realised on them | No | Non-monetary |
Map every recurring pay code as MPF-relevant or not before your first payroll run. It’s far cheaper than unpicking it later — and it matters most for sales teams, executives and anyone with variable compensation.
Deadlines and the eMPF Platform
Contributions now flow through the eMPF Platform rather than directly to individual trustees. You submit contributions with a remittance statement, and the platform allocates them to each employee’s account based on that statement.
| Obligation | Deadline | Note |
|---|---|---|
| Enrol a new employee | Within 60 days of employment | Separate from the first payment deadline |
| Monthly contribution | 10th of the following month | September wages are due by 10 October |
| First contribution for a new hire | Contribution day after the month containing the 60th day | The rule most often misread |
| Monthly pay-record to each employee | Within 7 working days of remitting | Must show income, both contributions, and payment date |
| Casual employees | Within 10 days of each contribution period | Even where the period is under a month |
If the 10th is a Saturday, public holiday, or a gale or black rainstorm warning day, the contribution day moves to the next day that isn’t one of those. The same applies if the eMPF Platform is suspended in a way that affects your ability to file.
One easily missed rule: an employee with no relevant income in a period still goes on the remittance statement, reported at HK$0. Leaving them off is a filing error, not a simplification.
The 2025 Offsetting Abolition
The most consequential recent change. Per the Labour Department, 1 May 2025 is the transition date. After it, accrued benefits from employers’ mandatory MPF contributions can no longer offset severance or long service payment for years of service starting from that date.
The abolition is not retrospective. Different rules apply to service before and after the transition date, so the practical burden falls on record-keeping.
What this changes for employers:
Termination cost forecasting can no longer assume mandatory MPF contributions will absorb severance or long service exposure. HR records need to track service periods either side of 1 May 2025 clearly. Finance should revisit termination accruals for long-tenured staff. And offboarding needs to be treated as an MPF, Employment Ordinance and IRD event rather than a payroll one.
Foreign employers tend to underestimate this because MPF contributions look small next to total compensation. For long-serving staff, severance and long service payment exposure is not small — and the offset that used to soften it is going away.
Common Mistakes
Deducting from the employee too early. Your contributions start on day one; theirs don’t. The first payslip usually shows employer-only.
Assuming part-timers are exempt. They generally aren’t. Age and employment period decide it, not hours.
Giving casual staff a contribution holiday. Casual employees don’t get one, and their contributions are due within 10 days of each period.
Treating every allowance the same. Cash allowances count; genuine expense reimbursements don’t. Free use of a car doesn’t; cash for running one does.
Assuming foreign employees are exempt. The exemption is conditional on an overseas scheme or a permitted stay of 13 months or less — and a visa extension can end it.
Omitting zero-income employees from the remittance statement. They still belong on it at HK$0.
Using monthly thresholds for weekly staff. Daily minimum HK$280 and maximum HK$1,000, scaled to the wage period.
Forgetting MPF at offboarding. Final contribution, termination notification, IRD forms and the post-2025 offsetting position all need handling.
Setup Checklist
1. Confirm the legal employer — your Hong Kong entity, an EOR, or another structure.
2. Check age, start date, visa duration and overseas scheme status for each hire.
3. Map every pay code as MPF-relevant or not, before the first run.
4. Configure employer contributions from day one, employee deductions after the holiday.
5. Set the wage period correctly — it drives which thresholds apply.
6. Diarise the 10th, with an internal cut-off early enough to approve before it.
7. Build the pay-record step in, within seven working days of remitting.
8. Write offboarding steps covering final contribution, termination notification, IRD forms and the post-2025 offsetting position.
A spreadsheet copes with one or two employees. It stops coping once you add variable pay, foreign staff, multiple wage periods or regular joiners and leavers. For the wider payroll picture — IRD returns, salaries tax reporting, final pay — see the guide to payroll in Hong Kong.
How NNRoad Handles This
If you have a Hong Kong entity, payroll outsourcing covers MPF enrolment, contribution calculation, remittance statements, pay-records and the monthly calendar, while your company stays the legal employer. If you don’t have an entity, payroll support alone isn’t enough — there’s no employer for it to attach to — and a Hong Kong Employer of Record provides the employment structure with MPF handled inside it. Where the work is project-based rather than permanent, on-demand talent may fit better. Choosing between those models, and working out what a provider should actually cover, is covered in the guide to payroll outsourcing in Hong Kong.
Not sure what your first MPF run should look like?
Start dates, wage periods and the contribution holiday interact in ways that catch out most first payroll runs. Tell us the hire date, salary and wage period and we’ll tell you exactly what the first two payslips should show.
FAQ
How much does an employer contribute to MPF?
5% of the employee’s relevant income, capped at HK$1,500 a month once relevant income exceeds HK$30,000. Below HK$7,100 you still contribute 5% while the employee contributes nothing.
When is my first MPF contribution due for a new employee?
On or before the contribution day following the calendar month in which the employee’s 60th day of employment falls. That’s separate from enrolment, which must happen within the first 60 days.
When does the employee start contributing?
After a contribution holiday covering their first 30 days plus the incomplete wage period that follows. Employer contributions have no holiday and run from day one, so the first payslip typically shows an employer contribution and no employee deduction.
How is MPF calculated for weekly or daily paid staff?
Scale the daily minimum of HK$280 and maximum of HK$1,000 by days in the wage period. A weekly period gives a HK$1,960 floor and HK$7,000 ceiling.
Is payment in lieu of notice subject to MPF?
No. It falls outside the definition of relevant income, as do severance payments and long service payments.
Do foreign employees need MPF?
Often, yes. They may be exempt if covered by an overseas retirement scheme or permitted to remain in Hong Kong for 13 months or less — but if a visa is extended beyond that, reassess, because obligations can begin once the exemption stops applying.
Can MPF still offset severance or long service payment?
Not for service from 1 May 2025 onwards. The abolition isn’t retrospective, so transitional rules still apply to earlier service — which makes clean records of service either side of that date important.