Hong Kong has recently passed legislation that will amend the maximum level of relevant income for compulsory Mandatory Provident Fund (MPF) contributions, effective from June 1, 2012, according to an announcement on the MPF Authority’s official website.

Specifics related to these new MPF guidelines are as follows:

• For monthly-paid regular employees: The maximum level of relevant income has been amended from HK$20,000 per month to HK$25,000 per month. Therefore, maximum mandatory contributions will be adjusted from HK$1,000 per month to HK$1,250 per month.
• For self-employed persons: The maximum level of relevant income has been amended from HK$20,000 per month to HK$25,000 per month and from HK$240,000 per year to HK$300,000 per year. Therefore, maximum mandatory contributions will be adjusted from HK$1,000 per month to HK$1,250 per month or from HK$12,000 per year to HK$15,000 per year.

Note that, according to the MPFA, “relevant income” refers to any wage, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance (including housing allowance and other housing benefits), expressed in monetary terms, paid by an employer to an employee. It does not include any severance or long service payments under the Employment Ordinance.

For the contribution periods starting on or after June 1, 2012, employers, employees and self-employed persons should make appropriate adjustments to the mandatory contributions according to the new maximum level of relevant income.