Do Cash Gift Vouchers for Staff Require MPF Contributions?

A company wants to reward long-serving staff with HK$5,000 travel cash vouchers — must it contribute MPF on them? A December 2011 Ming Pao column said it all hinged on whether the payment counted as “relevant income” under the MPF legislation. Cash vouchers rewarding employees in monetary form trigger contributions from both employer and employee — but the same goodwill can legitimately avoid contributions done differently.

Do cash gift vouchers count as MPF “relevant income”?

Under the MPF legislation (as of 2011), “relevant income” means wages, salaries, allowances, commissions, bonuses, contract gratuities and tips paid by an employer in monetary form. Travel cash vouchers rewarding long-serving staff in monetary form count as relevant income, so both employer and employee must contribute; but lucky-draw prizes, wedding gifts for personal milestones, and receipt-backed reimbursements do not.

Travel Cash Vouchers: Both Sides Must Contribute

Because travel cash vouchers reward long service and good performance in monetary form, they meet the definition of relevant income — contributions are due from both the employer and the employee. By contrast, vouchers given as part of a lucky draw are not consideration of employment and attract no contributions — though a lucky-draw prize cannot serve as a long-service award.

Two Kinds of Cash That Don’t Count: Gifts and Reimbursements

The column clarified two common questions. First, payments for an employee’s major personal events — such as a HK$3,000 cash voucher for a wedding or a new baby — are generally excluded from relevant income, as they are not wages, allowances, rewards or tips. Second, reimbursed expenses (such as mobile-phone bills or business travel costs) compensating employees for work-related outlays are not relevant income either; expenses claimed against receipts require no contributions.

A Legitimate Workaround: Non-Monetary Benefits

The columnist suggested an alternative for employers wanting to reward staff without extra contributions: offer the trip as a non-monetary benefit. The employer pays the travel cost directly (capped at the same HK$5,000), and the employee enrols at a travel agency and gets reimbursed against the receipt. Since the package is not a monetary benefit, its value falls outside relevant income — and neither the company nor the colleague contributes — at the cost of some extra admin for HR and accounting.

Employers unsure about “relevant income” can check with the MPFA or their trustee to stay compliant.