MPF Contribution Rates and Calculation

Part 1: Calculation for New Joiners

The calculation for new joiner’s MPF will only take effect after the 60 calendar days from joined date.

Example 1:

• Employee A joined the company on the 5^th of June.
• Within the 60 days from joined date there will be no MPF contributions.
• After the 60 calendar days, the contribution start date will be on 3^rd of August. Hence, the first contribution will be on the 10^th of September.

• The Employer will need to contribute from the first day of employment of the employee and will need to pay before the 10^th of September.

 Example 2:

• Employee Blue’s joined date is the 1^st of June.
• Employee MPF will not be deducted for contribution on the first month, but there will be Employer MPF from the joined date. However, it will not be shown on the payslip.

• On the second month, the Employee and Employer MPF will be counted accordingly. Employer MPF will be shown in the payslip together with the previous month’s contribution.

YTD is calculated based on $300 (June) + $300 (July) = $600

Succeeding months should display and calculate both Employee and Employer MPF accordingly.

Please note: Employee with ‘Foreigner’ or ‘Expatriates’ status who stays in Hong Kong for less than 13 months is not required to contribute MPF.

Part 2: Flexible MPF Contribution Rate

In Hong Kong, the standard MPF contribution rate is 5% for both the employer and employee, with a statutory maximum contribution cap. However, some companies may offer different contribution structures based on internal policies or contractual obligations. To support this, the system allows flexible configuration of MPF contribution rates and ceilings.

🔧 What Can Be Configured?

With this setup, users have full control over how MPF contributions are calculated. Here's what's supported:

• Custom contribution rates: Choose any rate between 5% and 15% for both employer and employee. The system allows these to be set independently.

• Contribution ceilings: A ceiling amount can be applied to cap the contribution. If the ceiling is set to “0”, no cap will be enforced.

• Automated payslip reflection: The contribution amounts based on the defined rates and ceilings are automatically calculated and displayed on the employee’s payslip during payroll processing

📊 How the Calculation Works

Here’s an example to illustrate how the system calculates contributions when custom rates and ceilings are used:

Scenario:

• Employee’s Basic Pay = $10,000

• Contribution Rate ➜ 10%

• Contribution Ceiling set in system ➜ $900

Without ceiling applied:

• Employer MPF ➜ 10% of $10,000 = $1,000

• Employee MPF ➜ 10% of $10,000 = $1,000

With $900 ceiling applied:

• Employer MPF = $900

• Employee MPF = $900

These values are automatically populated in the payslip under the MPF section.

📥 Bulk Update Option

For companies with a large number of employees, the system provides a bulk import function to update MPF rates and ceilings in bulk. This makes it easy to roll out contribution changes across multiple employees efficiently without manual data entry.