1. The right way to set up an MPF account?
Organising an MPF account is a straightforward process. Hong Kong’s Necessary Provident Fund Schemes Creatority (“MPFA”) maintains a list of MPF Approved Trustees which employers might consider. As an illustration, the HSBC MPF plan provides individuals with a wide number of investment schemes akin to these focused more on world bonds, Hong Kong and Chinese equities and so on. Simply contact your chosen MPF providers and full the relevant employer application types for the scheme of your choice. As soon as an employer has efficiently enrolled in an MPF scheme, they are going to be issued an employer’s identification number, demonstrating your obligation to help your staff in their retirement schemes.
2. What are an employers’ obligations under the Hong Kong MPF rules?
Employers must also complete the one-time obligation of helping their staff in opening MPF accounts. Aside from exempt individuals, an employer ought to enroll both full-time and part-time staff who are at the very least 18 but under sixty five years of age in an MPF scheme within the primary 60 days of their employment. Nevertheless, if an employment relationship ends previous to the 60th day of employment, no MPF arrangement is required.
Upon successful enrollment, employers should meet ongoing obligations of remitting contributions to their workers MPF schemes as soon as every contribution period. Contributions for monthly-paid full-time staff are typically made on the tenth day of every month.
Employers and employees are every required to make regular necessary contributions to an employees MPF scheme. The MPF worker contribution and MPF employer contribution ought to each be 5% of the employee’s related revenue, topic to relevant earnings levels. For a monthly-paid employee, the minimal and most relevant earnings levels are $7,a hundred and $30,000 respectively.
To make payments to their staff, employers are required to calculate their employee’s related income and the quantity of mandatory contribution that have to be made for every contribution period. The employer must then deduct the calculated quantity from their employee’s revenue and remit that sum to their MPF account.
3. What are the worker contribution rules under the Hong Kong MPF laws?
Workers do not face as many compliance obligations as their employers do. Nevertheless, it is vital for employees to ensure that they make the regular obligatory contribution of 5% of their related revenue to their related scheme as mentioned above.
4. Are there exemptions under a Hong Kong MPF contribution guidelines?
Not all staff working in Hong Kong should be enrolled under an MPF scheme. Expatriates residing in Hong Kong for employment purposes can acquire permission to be exempted by the Hong Kong Government. Permission can only be granted if the employee in query is either a member of an overseas retirement scheme, or will reside in Hong Kong for a period of 13 months or less.
In the event an employer fails to adright here to their MPF obligations, the MPFA will situation the employer with a “surcharge notice”. This notice will impose a 5% surcharge on default contributions and the surcharge received will go totally to the employee’s MPF account. In addition, defaulting on contributions is a criminal offence and the defaulter is liable to a maximum penalty of a HK$450,000 fine and imprisonment for four years. Employers who’ve didn’t comply with their MPF employer obligations are liable to potential monetary penalties of HK$5,000, or 10% of the default amount, whichever is greater, on the defaulting employer.
We understand that matters referring to MPF calculation and payroll administration are time-consuming tasks that require a significant quantity of the company’s resources. FastLane can handle these essential enterprise tasks, akin to payroll, MPF account setup and your employee’s enrollment into your chosen MPF scheme in your behalf.
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