Pension insurance

The mandatory provident fund scheme

Set up in 2000 by the Mandatory Provident Fund Authority, the mandatory provident fund scheme provides the Hong Kong’s employees with security in retirement.

Pension insurance

Both the employer and employee contribute 5% of the salary but either party can voluntarily contribute more to the scheme. Employees must be between 18 and 65 years old to benefit from the scheme.

All earnings such as salary, wages, bonus, gratuity, leave pay and commissions are added up for the contribution, excluding housing allowance and rent. The employer must start his contribution as soon as the employee begins work, while the employee starts to contribute after the first 30 days. You will receive a slip showing the amount contributed by your employer each month. As an employee, you can deduct up to $12,000 on the mandatory contributions from your tax, while your employer can deduct up to 15% of the total amount paid.

The money can be withdrawn from this fund when you’re leaving Hong Kong, retire or if you become ill and are thus unable to contribute. If you change jobs within the same industry, the amounts paid can be transferred but only if your new employer has the same scheme.

Some people are not included in this mandatory fund scheme. These include domestic helpers, self-employed hawkers and their employees, and those covered by another scheme or pension fund. If you come to work in Hong Kong for less than 13 months, have retirement schemes abroad or you are working in the European Union Office of the European Commission in Hong Kong, you are also not covered.

Both the employer and employee contribute 5% of the salary but either party can voluntarily contribute more to the scheme. Employees must be between 18 and 65 years old to benefit from the scheme.

All earnings such as salary, wages, bonus, gratuity, leave pay and commissions are added up for the contribution, excluding housing allowance and rent. The employer must start his contribution as soon as the employee begins work, while the employee starts to contribute after the first 30 days. You will receive a slip showing the amount contributed by your employer each month. As an employee, you can deduct up to $12,000 on the mandatory contributions from your tax, while your employer can deduct up to 15% of the total amount paid.

The money can be withdrawn from this fund when you’re leaving Hong Kong, retire or if you become ill and are thus unable to contribute. If you change jobs within the same industry, the amounts paid can be transferred but only if your new employer has the same scheme.

Some people are not included in this mandatory fund scheme. These include domestic helpers, self-employed hawkers and their employees, and those covered by another scheme or pension fund. If you come to work in Hong Kong for less than 13 months, have retirement schemes abroad or you are working in the European Union Office of the European Commission in Hong Kong, you are also not covered.

Further reading

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