Employers
- What are the employer's duties under MPF regulations?
- If I lost my company's Participation Certificate issued by the MPFA, what should I do?
- I have hired a few overseas employees to work for me. Do I need to enroll these expatriates in MPF schemes?
- Our company has set up a factory in China and some of my Hong Kong-based employees are working there. Are they required to join an MPF scheme?
- Does my company incur a penalty if I forget to pay MPF contributions on time?
- If an employee resigns, can he withdraw any accrued benefits?
- If an employee continues to work for the company after the retirement age of 65, does the company need to contribute for this employee?
- Under the MPF, the mandatory contributions of 5% are tax deductible. How are voluntary contributions treated?
- What would I receive after I have enrolled my employees in an MPF scheme?
- What should I do if I need to pay Severance or Long Service Payments ("SP/LSP") to my employee?
- What are the employer's duties under MPF regulations?
As an employer, you will be responsible for the following:
Enrolment:
- Ensure your employees become members of an MPF scheme
Contributions:
- Calculate relevant income and contributions
- Pay contributions not later than the 10th day of the following month after each contribution period end date
- Notify the trustee of member termination of employment within 10 days after the last day of the calendar month in which the employee ceases employment
- Assist employees in making voluntary contributions
Administration:
- Notify the trustee of any changes of employer particulars or employee particulars within 30 days
- Assist employees in completing the election form for the transfer of accrued benefits
- Provide a remittance statement to the trustee detailing each contribution payment
- Provide a monthly pay-record to employees showing relevant income, amount of contributions and contributions payment date
- Keep records for employees
- Keep the information required to be included in the remittance statement
Others:
- Display an MPF participation certificate in the office
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- If I lost my company's Participation Certificate issued by the MPFA, what should I do?
You can inform your trustee the matter by writting. The trustee will inform MPFA to reissue the Participation Certificate for your company.
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- I have hired a few overseas employees to work for me. Do I need to enroll these expatriates in MPF schemes?
If the period during which your expatriate employees is given permission to land or remain in Hong Kong for employment purposes does not exceed 13 months, or if the expatriate employees are members of a provident, pension, retirement or superannuation scheme run in a jurisdiction outside Hong Kong, they are exempted from the MPF Schemes Ordinance and do not need to join an MPF scheme. (Source: MPFA Website)
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- Our company has set up a factory in China and some of my Hong Kong-based employees are working there. Are they required to join an MPF scheme?
Yes. No matter where they work, if they are employed by your Hong Kong company you will be responsible for providing them with an MPF scheme.
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- Does my company incur a penalty if I forget to pay MPF contributions on time?
If you fail to pay the contributions on time, the trustee will inform the MPF Schemes Authority. You will then be liable to pay a contribution surcharge of 5% on the outstanding amount imposed. A financial penalty of HK$5,000 or 10% of contributions in arrears (whichever is greater) may also be imposed.
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- If an employee resigns, can he withdraw any accrued benefits?
Under MPF, all accrued benefits derived from mandatory contributions must be preserved until the retirement age of 65 or certain withdrawal conditions are met. Voluntary contributions do not necessarily need to follow the MPF rules and therefore can be withdrawn upon termination of employment subject to the plan rules set out by the employer.
For MPF exempted ORSO schemes, the arrangement will be different. Existing members who join the scheme before the MPF implementation date can withdraw accrued benefits upon termination of employment. However, for new members who join after the MPF implementation date, they are subject to a "Minimum MPF Benefits" rule and only benefit amounts exceeding this level can be withdrawn upon termination of employment.
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- If an employee continues to work for the company after the retirement age of 65, does the company need to contribute for this employee?
The company and the employee are not obliged to make MPF contributions after the employee attains the retirement age of 65. However, both the company and the employee can make voluntary contributions if they wish to.
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- Under the MPF, the mandatory contributions of 5% are tax deductible. How are voluntary contributions treated?
Employers can enjoy tax exemption on their total mandatory and voluntary contributions subject to a maximum of 15% of the total emoluments of the employee(s). However, any voluntary contributions made by an employee are subject to Salaries Tax. Please note that employee mandatory contributions are not subject to Salaries Tax up to a maximum limit of HK$12,000 per year.
When an employee receives accrued benefits from an MPF scheme, the benefit amount is not usually subject to tax, except for any amount that is derived from the employer's voluntary contributions, to the extent that the amount exceeds the "Proportionate Benefits" as defined in the Inland Revenue Ordinance. Then, the excess portion is subject to tax.
"Proportionate Benefits" is defined as the number of completed months of service divided by 120, then multiplied by "Accrued Benefits". The accrued benefits for the purpose of this calculation will be the full amount of benefits derived from the employer's voluntary contributions. For example, if an employee worked for 4 years, the proportionate amount will be 40% (i.e. 48/120) of the accrued benefits.
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- What would I receive after I have enrolled my employees in an MPF scheme?
After your application for membership of an MPF scheme is submitted, you will be given notice of acceptance within 30 days from the date on which you submit all the information required for the application, or from the date on which you agree to observe and accept the governing rules of the scheme, whichever is later.
Your scheme trustee will report your participation in the scheme to the MPFA. Upon receipt of such information, the MPFA will issue a participation certificate to you. If you are an employer, you are required to display this participation certificate at the premises where your employees were employed. If your employees do not perform work at your premises, you should display the certificate at your principal place of business. The displayed certificate may either be the original certificate or a certified copy issued by the MPFA.
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- What should I do if I need to pay Severance or Long Service Payments ("SP/LSP") to my employee?
An employer is bound by the Employment Ordinance to pay SP/LSP to an employee where applicable. After paying the SP/LSP, you can apply to your scheme trustee to withdraw the relevant amount from the accrued benefits derived from your mandatory contributions (and voluntary contributions, if any) to offset the SP/LSP.
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