Self-Employed and MPF: What’s “Bogus Self-Employment”?

Who counts as self-employed under MPF?

An August 2011 article explained that anyone aged 18 to under 65 who earns income providing services or goods as a non-employee — sole proprietor or business partner — is a self-employed person under MPF and must enrol. Contributions are based on the past year’s income: under HK$60,000 a year (HK$5,000 monthly average) means no contributions; above HK$240,000 a year (HK$20,000 monthly) caps at HK$12,000 a year (HK$1,000 monthly); between the bounds, 5% of relevant income. Those with fluctuating income may contribute monthly or yearly.

What are the penalties for not contributing?

The MPFA can prosecute unregistered or defaulting self-employed persons: up to HK$50,000 and six months’ jail on first conviction, HK$100,000 and 12 months thereafter.

What is “bogus self-employment”?

Some employers dodge the 5% employer contribution by reclassifying staff as “self-employed” — e.g. a tour-bus driver told to incorporate and contract back — while work arrangements stay unchanged. Watch out. Contribution details are on the MPFA site; fund choices at MPF fund comparison.