Self-employed MPF: How Business Partners Calculate Contributions

“Running your own business means no MPF contributions, right?” This 2011 reader Q&A corrected a common misconception about the MPF contribution rate for the self-employed: earning income as a business partner counts as self-employment under the MPF system — contributions are still required.

How does the MPF contribution rate work for the self-employed?

A business partner earning income as a non-employee counts as self-employed under the MPF system and must enrol in an MPF scheme, contributing 5% of relevant income. The simplest method is to use the “assessable profits” on the tax return, apportioned by shareholding — a half-owner declares half of the company’s profit for that financial year.

New partners without a tax return: three declaration methods

Partners who have just started out and have no tax return yet can declare relevant income to their trustee in three ways:

1. Use the basic personal allowance as the relevant income and contribute 5% of it;
2. Contribute at the mandatory cap — HK$12,000 a year (HK$1,000 a month);
3. Submit a written declaration to the trustee stating the relevant income.

Era note: figures are as of 2011

The HK$1,000 monthly cap above reflects the 2011 rules (maximum relevant income was HK$20,000 a month then). The income levels have been revised several times since — check the MPFA’s latest figures or the MPF education guides.