Seven MPF Contribution Mistakes Hong Kong SMEs Keep Making
The 30-day contribution holiday, the HK$7,100 floor, part-timers, leavers before day 60, bonuses, the 10th-of-the-month deadline — the MPF errors that show up in small-company payroll, and how to check for them.
The Mandatory Provident Fund rules are not complicated, but they have enough edge cases — new joiners, low earners, part-timers, bonuses — that a small company running payroll in a spreadsheet gets one of them wrong sooner or later. These are the seven we see most often when reviewing SME payroll, with the rule as the MPFA states it and what to check.
This article is general information for reference only and does not constitute legal or financial advice. Figures are the MPFA's published levels at the time of writing; the minimum and maximum relevant income levels are reviewed periodically.
The rules in one place
| Item | Rule |
|---|---|
| Who must be enrolled | Full-time and part-time employees aged 18 to 64, employed for a continuous period of 60 days or more |
| Enrolment deadline | Within the first 60 days of employment |
| Contribution rate | 5% of relevant income from the employer and 5% from the employee |
| Minimum relevant income | HK$7,100 a month (HK$280 a day) — below this the employee contributes nothing; the employer still contributes 5% |
| Maximum relevant income | HK$30,000 a month (HK$1,000 a day) — contributions are capped at HK$1,500 each side |
| New-joiner holiday | Employee is exempt for the first 30 days and any incomplete wage period immediately after; the employer contributes from day one |
| Contribution day | On or before the 10th of the month following the wage period |
| Late payment | 5% surcharge on the default amount, credited to the employee's account; a financial penalty of HK$5,000 or 10% of the default, whichever is greater, may also be imposed |
Mistake 1 — Applying the 30-day holiday to the employer
The single most common error. The 30-day contribution holiday is for the employee only. The MPFA's wording: employees are "not required to make contributions for the first 30 days of employment, nor do they have to make contributions for any incomplete wage period that immediately follows" — but employers "must contribute from the first day of employment".
In practice: for a joiner on the 15th of the month, the employer owes 5% on the salary from the 15th; the employee owes nothing for that month or the following full month if their 30 days end mid-period. Payroll spreadsheets that switch both sides on together are wrong for the employer's side.
Check: for every joiner in the last 12 months, does the employer contribution start in the first wage period?
Mistake 2 — Skipping the employer contribution below HK$7,100
When monthly relevant income is under HK$7,100, the employee does not contribute. The employer still does. The MPFA puts it plainly: the employee "does not have to make employee mandatory contributions, but his employer must still contribute 5% of the staff's relevant income".
This catches part-timers, junior staff on short months and anyone whose income dips in a low-commission month.
Check: any employee with zero contributions on both sides in a month when they were paid — why?
Mistake 3 — Treating part-timers as outside MPF
"Part-time" is not an exemption. The MPFA's guidance for part-time staff is that employers must enrol those "aged between 18 and 64 who have been employed for a continuous period of 60 days or more". The 60-day test is about the length of the employment relationship, not weekly hours. A part-timer who has been on the books for three months at eight hours a week is a regular employee for MPF purposes.
The interaction with the 2026 continuous-contract change is worth noting: the Employment Ordinance test (hours-based) and the MPF test (60 days) are different. A part-timer can be inside MPF and outside the continuous-contract benefits, or vice versa.
Check: list everyone paid in the last quarter who is not enrolled. For each, is the employment period under 60 days?
Mistake 4 — Miscounting the 60 days
Two versions of this. First, enrolling on day 60 and starting contributions from that point: contributions for a regular employee run from the first day, with the first payment due "on or before the 10th day of the month following the month in which the employee reached 60 days of employment". Second, the reverse — an employee who genuinely leaves before 60 days: "if an employee's continuous employment period is less than 60 days, the employer is not required to make contributions", and money already deducted from the employee should be handled with the trustee.
Check: a joiner in January who reaches 60 days in March: are January and February contributions included in the first payment?
Mistake 5 — Leaving bonuses and commission out of relevant income
Relevant income is "all monetary payments paid or payable by an employer to an employee" — wages, commission, bonuses, leave pay and the like. Severance and long service payments are excluded, and so are non-monetary benefits.
The mistake is calculating 5% on base salary only and forgetting the year-end bonus or a quarterly commission. It also runs the other way: a large bonus month pushes income above HK$30,000, and the cap applies to the total for that wage period — the contribution is HK$1,500 each side, not 5% of the whole amount.
Check: reconcile total relevant income per employee on the MPF remittance statement against gross pay on the payroll register for a bonus month.
Mistake 6 — Paying on the 15th
The contribution day is the 10th of the following month. Contributions after that date attract the 5% surcharge on the default amount, and the MPFA may impose the financial penalty on top. Many SMEs pay salaries at month end and MPF "when the bank file gets done", which drifts.
Check: the trustee's remittance confirmations for the last six months — any dated after the 10th?
Mistake 7 — Still planning around offsetting
Since 1 May 2025, accrued benefits from the employer's mandatory contributions can no longer be used to offset severance or long service payments for service from that date. Employer voluntary contributions and service-based gratuities can still be used. Companies that budgeted termination costs on the assumption that "MPF covers most of the LSP" need to update the model for post-transition service.
Check: does your termination-cost calculation split service before and after 1 May 2025?
How to run a quick self-audit
- Export twelve months of payroll and the trustee's contribution records.
- For each employee, tick: enrolled within 60 days; employer contribution from day one; employee contribution starting after the 30-day holiday; correct treatment under HK$7,100 and over HK$30,000.
- For each month, tick: paid on or before the 10th.
- For each leaver, tick: final contribution included in the last wage period; no deductions for anyone who left inside 60 days.
If more than a couple of boxes are blank, the fix is usually not the spreadsheet formula but the process around it — who tells payroll about joiners, leavers and bonuses, and when.
Sources
- MPFA — Mandatory contributions: employees
- MPFA — Employer FAQ
- MPFA — MPF covers part-time employees (14 January 2026)
- Labour Department — Abolition of the MPF offsetting arrangement
Our Payroll Outsourcing service calculates MPF every month with these rules built in, and our HR Health Check includes an MPF administration review for companies that want the last few years looked at.