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When to make contributions to employees’ Mandatory Provident Fund (MPF)? What is “Contribution Free Period”

In Hong Kong, employers and employees from all walks of life are generally protected by the Mandatory Provident Fund (MPF) scheme, but many start-up employers may not know when they should make the first contribution to the MPF scheme for their employees, this article will detail the things that employers and employees need to pay attention to when making contributions to a Mandatory Provident Fund (MPF) scheme for the first time, including the “contribution-free period” and payment statement.

When to make contributions to employees’ Mandatory Provident Fund (MPF)?

The employer shall, for each contribution period (payment period), pay 5% of the employee’s relevant income (any salary, holiday allowance, fee, commission, bonus, bonus, etc. paid in money) as Mandatory Contributions (MPF).

When calculating the contribution date, it is generally calculated on a working day on or before the 10th day of each month. The first contribution period is on or before the next contribution day of the month after the employee has been employed for 60 calendar days.

In other words, if the employee has been employed for 60 calendar days after joining the job, the day is September 1st, that is, on or before October 10th of the next month, the employer is required to pay his Mandatory Provident Fund (MPF) for the employee. Make contributions and submit the payment statement for the pay period to the MPF trustee.

It should be noted that if the contribution day falls on a public holiday, Saturday or Sunday, or inclement weather such as a black rainstorm warning and gale warning, the contribution day of the month will be postponed to the next working day.

What is a Mandatory Provident Fund (MPF) “Contribution Free Period”?

The Mandatory Provident Fund (MPF) “Contribution-Free Period” is a Mandatory Provident Fund (MPF) scheme specially designed for new employees. Employees are not required to make contributions during the “Contribution-Free Period”. Employee contributions are deducted from the relevant income.

When is an employee’s “contribution free period”? This is the employee’s first 30 days of employment and the first incomplete pay period. For example, if an employee is hired on August 16 and the pay period is from the 1st to the last day of each month, the first 30 days of employment (August 16-September 16) will be exempt from contributions, while the first incomplete pay period (September 16-October 31) is also exempt from contributions.

What is a Mandatory Provident Fund (MPF) Contribution Payment Statement?

The above-mentioned Mandatory Provident Fund (MPF) contribution payment statement should be completed by the employer, and the trustee will allocate it to each employee’s account according to the statement. The employer also needs to complete the payment statement regardless of whether the payment is made by autopay or not.

At the same time, the trustee can accept electronic, or paper payment statements as required, if the statement lists the relevant income, mandatory contribution amount, voluntary contribution amount (if any), and signed or stamped company chop for each employee (if any).

The MPFA will use this certificate to check whether the contributions are accurate. Those who violate the rules may be classified as delinquent. Therefore, it is recommended to check more frequently. If an employer fails to submit a contribution payment statement on time, thereby delaying MPF contributions, the maximum penalty is HK$50,000. The employer is also responsible for keeping at least one copy of the payment statement and records.

The above information is for reference only. If you have any questions about labor law, accounting, Mandatory Provident Fund (MPF), we welcome your inquiries.

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