MPF in Hong Kong: Your Essential Guide

Aubrey Yung

MPF stands for Mandatory Provident Fund. The MPF in Hong Kong helps citizens and residents save for their retirement through a selection of individual, employer sponsored and industry schemes. If you’re working in Hong Kong, the chances are that both you and your employer will make contributions to an MPF scheme - you can also choose to make voluntary contributions to give your nest egg a boost.

In this guide we’ll cover how MPF schemes work, including the MPF Hong Kong calculation for contribution levels, and some of the ins and outs of the MPF for foreigners. We’ll also introduce Wise as a smart option to make low cost international payments as an expat - including lower fees if you need to withdraw your MPF fund early when you leave Hong Kong.

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What is MPF in Hong Kong?

MPF is the Hong Kong Mandatory Provident Fund.

The MPF is a mandatory, privately managed fully funded contribution system which is part of Hong Kong’s retirement protection structure, and was launched in 2000.¹ The most common MPF schemes are Master Trust Schemes.² These can be opened by employers, employees, self employed people and those who want to open a personal or voluntary contribution account. Master Trust Schemes can include:

  • Contribution accounts
  • Personal accounts
  • TVC accounts

There are also employer sponsored schemes, and industry schemes, which are available to people based on their type of employment. Employer sponsored MPF schemes are available only to employees of a specific company, while industry schemes are primarily in place for casual workers in catering and construction.

You can learn lots more about MPF schemes, fund types and features, on the MPFA website. There are also a range of handy tools like a retirement planning calculator which can help you build a picture of how your MPF scheme can work for you in future.³

Is MPF mandatory in Hong Kong?

Employers and employees are both required to make mandatory contributions to the employee’s MPF account. This must be at least 5% of the employee’s relevant income, subject to minimum and maximum caps.⁴ Contributions for self-employed people are also set at a mandatory 5% of relevant income.⁵ On top of the mandatory MPF payments, you can choose to make extra voluntary contributions to top up your account.

Is MPF taxable in Hong Kong?

An employee can claim a tax deduction for contributions they make to an MPF scheme, subject to a maximum cap of 18,000 HKD.⁶ Voluntary contributions may or may not be tax deductible, depending on the specifics of the payment and MPF scheme.

MPF Hong Kong contribution

Mandatory MPF Hong Kong employer contributions are deposited by the employer directly into the employee’s MPF account. The employee contribution is also deducted from salary payments, subject to the minimum and maximum income caps. This means that although the employer must always make an MPF contribution, employees earning under 7,100 HKD a month do not need to make mandatory payments.

The MPF Hong Kong maximum contribution is 1,500 HKD per month from both the employer and the employee. That’s because relevant income is only assessed up to the cap of 30,000 HKD a month. Here’s how the mandatory MPF contribution system works:

Monthly incomeEmployer MPF contributionEmployee MPF contribution
Under 7,100 HKD5% of relevant incomeNot required
7,100 - 30,000 HKD5% of relevant income5% of relevant income
30,000 HKD or more1,500 HKD1,500 HKD

Depending on the type of MPF scheme you select, you may also be able to make tax deductible voluntary contributions to your account.⁷

How to withdraw MPF when leaving Hong Kong

Of course, many people will only start to withdraw their MPF funds upon retirement. But what if you’re moving away? In this case you may be eligible for MPF Hong Kong early withdrawal.

Early withdrawal is only available if you’re permanently leaving Hong Kong. You must have left already, or intend to leave soon, and make a statement confirming you will not return to Hong Kong for work or to settle as a permanent resident. It’s worth noting that MPF won’t be paid again if you withdraw your funds and then reapply to your provider under the same reason but with a later date of leaving.

You’ll need to apply to the relevant MPF scheme to withdraw funds, and will be expected to provide:⁸

  1. Identity document (such as your HKID card)
  2. Claim form for payment of MPF on grounds of permanent departure from Hong Kong
  3. Statutory declaration form confirming you’re moving away permanently
  4. Documentary proof showing you are permitted to reside in a place outside Hong Kong

Sending money internationally from Hong Kong? Get Wise

Going through the MPF Hong Kong expat withdrawal process? If you’re withdrawing your MPF funds early, or need to send a payment overseas for any other reason, choose Wise international payments to get the real exchange rate and low, transparent fees every time.

No matter where in the world you’re sending your MPF funds, with Wise you’ll always get the mid-market exchange rate with no markup, no margin and no hidden fees. There’s just a low, transparent charge, and your money can arrive at its destination in double quick time. See how much you can save with Wise today.

If you’re working in Hong Kong, you’re likely to need to get to know the MPF system. Use this guide as an introduction, and if the time rolls around when you’re moving away and need to withdraw your MPF funds early, use Wise to get the best available deal on your international transfer.

Sign up and save with Wise now

Sources used in this article:

1 MPFA: Why MPF?
2 MPFA: Types of MPF Schemes
3 MPFA: Retirement Planning Calculator
4 MPFA: Mandatory Contributions - Employees
5 MPFA: Mandatory Contributions - Self-employed Persons (SEPs)
6 MPFA: Mandatory and Voluntary Contributions
7 MPFA: Tax Deductible Voluntary Contributions (TVC)
8 MPFA: Early Withdrawal

Sources last checked on 1-Nov-2021

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This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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