MPF employer obligations Hong Kong: five things to do before the 1 November 2011 threshold change

With only days to go before the MPF minimum income floor rose, more than 180,000 members were about to “leave the contribution net”. While the industry raced to update payroll systems, the MPFA issued five reminders to employers: systems, pay periods, casual workers — none could be missed.

What must employers do for the new threshold?

MPF employer obligations in Hong Kong required contributions to be calculated on the new floor from 1 November 2011: stop deducting the 5% employee portion from staff earning below HK$6,500 a month while continuing the employer’s own 5%; use the pay period starting 20 November for straddling periods; apply the HK$250 daily floor to casual employees; update payroll systems; and leave self-employed arrangements to trustees’ automatic updates.

The MPFA’s five reminders

1. Borderline employees: for monthly pay periods (1st to month-end), stop deducting 5% employee contributions from relevant income for staff earning below HK$6,500, starting with the 1–30 November contribution period.
2. Straddling pay periods: where a period spans two months (e.g. the 20th to the 19th), stop the 5% employee deduction from the 20 November–19 December period.
3. Casual employees: for “industry schemes” covering construction and catering, the minimum daily relevant income rose from HK$160 to HK$250 — those earning below HK$250 a day no longer paid employee contributions.
4. Update systems: employers had to update payroll programmes and systems to calculate contributions on the new thresholds — wrong deductions were the employer’s liability.
5. Self-employed persons: taxi drivers and others earning under HK$6,500 a month or HK$78,000 a year were freed from contributions immediately, with trustees updating arrangements automatically.

The part that did not change

The employer’s own contribution stayed put — even where employees were exempted, employers still contributed 5% of relevant income. The reform lightened the load on low earners; it did not reduce employer duties. The MPF education hub sets out employer obligations in full.