Do bonuses and travel awards attract MPF contributions? Cash vs kind is key

Year-end brings the bonus season every worker waits for. Former students asked Professor Kam: do company bonuses and travel awards count as “relevant income” for MPF purposes?

Do bonuses attract contributions?

Yes — double pay and bonuses are relevant income. Mandatory MPF contributions are based on an employee’s relevant income: beyond basic salary, double pay and bonuses count too. Relevant income means any wages, salary, bonus, leave pay, fees, commissions, gratuities, contract gratuities, tips or allowances (including housing allowances or benefits) paid in monetary form — but severance payments and long-service payments under the Employment Ordinance are excluded.

What about travel awards?

No — they’re not paid in money. Travel awards aren’t monetary benefits paid to employees, so they don’t enter mandatory contribution calculations. The same goes for in-kind rewards like buffet treats and dining vouchers, and share options from listed companies — none are paid in monetary form, so none count as relevant income.

What are the income floor and cap?

HK$5,000 floor, HK$20,000 cap. Below HK$5,000 a month, the employee contributes nothing but the employer still pays 5% of relevant income; above HK$20,000, each side pays just HK$1,000; in between, each pays 5% of relevant income. Professor Kam’s parting advice: manage money while young — divert some of the bonus into voluntary MPF contributions for extra retirement security.

To work out your own MPF contributions, visit MPF fund comparison.