Mandatory Provident Fund (MPF) in Hong Kong

Mandatory Provident Fund (MPF) in Hong Kong

The Mandatory Provident Fund (MPF) is a privately operated and organized savings program that mandates both employers and employees to make obligatory contributions to the employee's MPF account. This initiative aids employed individuals, residents, and eligible expatriates in Hong Kong by facilitating retirement savings. It encompasses a range of individual, employer-backed plans, along with industry-specific schemes.

How is MPF calculated?

Employers and employees are each required to contribute 5% of the employee’s monthly cash income, up to HK$1,500 for salaries above HK$ 30,000, to a registered MPF scheme.

When companies need to enrol the MPF scheme?

The MPF scheme must be enrolled within 60 days from the day of employment, and on the 10th day of the month the employer must contribute for the first MPF. Employee’s contributions are made by the employer by deducting the amount from the monthly salary.

Who is eligible for MPF contribution?

All employees aged 18 to 65 in Hong Kong, irrespective of their nationality, are eligible for an MPF account. However,
the following employees are exempt from the MPF Scheme:

  • Domestic employees:
  • Self-employed workers;
  • People covered by statutory pension or provident fund schemes, such as civil servants and subsidized or school teachers;
  • Members of occupational retirement schemes that are granted MPF exemption certificates;
  • Foreigners who enter Hong Kong for employment for less than 13 months, or who are covered by overseas retirement schemes; and
  • Employees of the European Union Office of the European Commission in Hong Kong. 

Moreover, employee’s contributions are not mandatory for monthly income below HK$ 7,000.

Employers must provide monthly pay-records to each employee within seven working days after the mandatory contributions are made. Information in the pay-record should include the employee's relevant income, the amount of contributions made and the date the contributions were paid to the scheme.

Types of MPF Schemes

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

  • Master Trust Schemes (Suitable for small- and medium-sized enterprises) - Open to employees whose employers participate in the scheme, self-employed individuals, and persons with accrued benefits to be transferred from other schemes.
  • Employer-sponsored Schemes (for companies with a large number of employees) - Open to employees of a single employer and associated company.
  • Industry Schemes - Applicable to employees of industries where the degree of labour mobility is high, i.e., the catering and construction industry and casual employees.

Investment Options

MPF funds offer a range of investment options. There are
seven funds under the Master Trust Scheme, which are:

  • MPF Conservative Fund,
  • Money Market Fund,
  • Guaranteed Fund,
  • Bond Fund,
  • Mixed Assets Fund,
  • Equity Fund, and
  • Index Fund.

Employees can choose the investment fund(s) that align with their risk tolerance and financial goals.

How to enrol the MPF scheme?

For employee enrolment, it is necessary to submit an enrolment form containing the subsequent details: 

  • Choice of the MPF scheme
  • Personal information
  • Self-certification of tax residency
  • Employee's signature

After the form is filled out, you will be required to send it to your trustee to establish the MPF account. 

Once the enrolment is authorized and the employee becomes a member of the MPF scheme, a notice of participation will be issued to the employee, encompassing these particulars: 

  • The MPF scheme the member has joined
  • Name and address of the trustee
  • Name of the scheme member
  • Date of notice issuance 

If the employee fails to complete the enrolment form, the employer must still submit the form to the trustee within the stipulated timeframe to fulfil their obligations. 

If the employer fails to submit the enrolment form by the 60th day, they can be held liable for a maximum fine of HKD 350,000 and a prison term of three years.

Tax Benefit

It's noteworthy that both workers and employers have the opportunity to offset taxes through their MPF contributions. Employees have the ability to seek deductions of up to HKD $18,000 in contributions on a yearly basis, while employers can seek deductions of up to 15% of an employee's yearly wage. This underscores the advantages of contributing to an MPF fund, proving advantageous for both employees and employers over time.

Withdrawing MPF Funds

When leaving Hong Kong permanently, employees can withdraw their MPF funds if they meet certain conditions. The withdrawal options include:

  • Lump-sum Withdrawal
  • Transfer to a Recognized Overseas Retirement Scheme
  • Deferred Annuity Plan

To proceed with the withdrawal, the below steps are crucial: 

  • Notify MPF Trustee: Inform your MPF trustee about your intention to withdraw funds.
  • Provide Required Documents: Submit necessary documents, including proof of leaving Hong Kong and relevant identification.
  • Choose Withdrawal Option: Decide whether you want a lump-sum withdrawal or to transfer the funds to an overseas scheme.
  • Withdrawal Process: The trustee will process your request and disburse the funds accordingly.


The Mandatory Provident Fund (MPF) in Hong Kong is designed to provide employees with a safety net for retirement. Understanding the types of accounts, eligibility, employer contributions, investment options, and withdrawal procedures is essential for effective financial planning.

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