MPF contribution rate: do double pay and bonuses count as “relevant income”?

Ahead of Lunar New Year, many companies hand out double pay and bonuses — and workers should know this extra pay attracts MPF contributions too. As of January 2012, the MPF contribution rate was 5% of “relevant income” from each of the employer and the employee, with relevant income capped at HK$20,000 a month — so anyone earning above that paid a flat HK$1,000 a month.

Do double pay and bonuses attract MPF contributions?

Yes. Double pay, bonuses, commissions and gratuities paid in monetary form all count as “relevant income” and must be contributed at the MPF contribution rate. “Relevant income” means any wages, salary, leave pay, fees, commissions, bonuses, gratuities, contract gratuities, tips or allowances an employer pays an employee in monetary form; but if your contributions have already hit the cap, a bonus adds nothing more.

What about cash gift vouchers? Lucky-draw prizes?

The same logic applies: cash gift vouchers paid in monetary form are rewards and count as relevant income. But vouchers won in a lucky draw are not remuneration for work, so they fall outside the definition and attract no contributions. The test is not the form of the prize but why it was given — whether it was reward under the employment relationship.

What if the employer gets the maths wrong?

The definition of relevant income is broad, and employers most often slip up with part-timers and commission-based staff. Remember the contribution day is the 10th of each month, and late payments can draw MPFA surcharges or even criminal prosecution. See the employer guides in the MPF education hub for more on contribution rules.