Hong Kong raises the MPF contribution ceiling to HK$25,000

This article is a rewrite of a report from July 2012.

Hong Kong passed legislation revising the maximum level of relevant income for compulsory MPF contributions, effective June 1, 2012 — raising the contribution ceiling for employees and the self-employed alike.

How much did the ceiling rise?

For monthly-paid employees, the maximum relevant income rose from HK$20,000 to HK$25,000 a month, lifting maximum mandatory contributions from HK$1,000 to HK$1,250. The self-employed saw the same monthly change, plus an annual rise from HK$240,000 to HK$300,000 — taking yearly maximum contributions from HK$12,000 to HK$15,000.

What is the MPF contribution rate?

Both employers and employees contribute 5% of relevant income each, subject to the ceiling above. For contribution periods starting on or after June 1, 2012, employers, employees and self-employed persons had to adjust to the new maximum.

What counts as “relevant income”?

Any wage, salary, leave pay, fee, commission, bonus, gratuity or allowance — including housing benefits — paid in monetary terms by an employer. Severance and long service payments under the Employment Ordinance are excluded.