Mandatory Provident Fund
FAQ
Can self-employed person choose the payment method of mandatory contributions?
A self-employed person may choose to contribute on a monthly or yearly basis and a trustee will provide a self-employed person the Definition of Relevant Income for Self-Employed Person for the declaration of relevant income in so as to determinate the amount of contribution and the payment method in next financial year. The self-employed person should inform the trustee of his/her election at least 30 days before the end of each financial year of the scheme.
How are the accrued benefits handled when a person ceases to be self-employed?
If the Scheme member ceases to be self-employed or becomes an employee, the Scheme member needs to inform the trustee and submit the termination notice. He/She may elect to retain the accrued benefits in the existing scheme or transfer the accrued benefits to the scheme in which the new employer is participating. Before the transfer takes place, the Scheme member needs to fill in an election form and submit it to the new employer or his/her trustee.
How should the Definition of Relevant Income for Self-Employed Person be completed?
There are four choices in the Definition of Relevant Income for Self-Employed Person to select. If the self-employed person receives the most recent notice of assessment issued by the Commissioner of Inland Revenue, he/she should use “assessable profits” as the relevant income for mandatory contribution purposes and submit the notice of assessment and the Definition of Relevant Income for Self-Employed Person to us. (e.g.: self-employed person should submit the notice of assessment of 2002-2003 for contributions to be made in 2004). If the self-employed person does not produce evidence of his/her relevant income, he/she may:
i. make mandatory contributions based on the maximum level of relevant income and he/she will not be required to provide evidence of relevant income.
ii. declare his/her relevant income as an amount equal to his/her assessable profits for the preceding year of assessment calculated in accordance with Part IV of the Inland Revenue Ordinance under the following three circumstances:
(1) The issue date of the most recent notice of assessment is more than two years from the date on which the notice is presented as evidence of relevant income; or
(2) The latest tax assessment is objected by the self-employed person or is under appeal; or
(3) The evidence produced by the self-employed person to the trustee of the MPF scheme concerned in relation to his/her relevant income does not consist of, or include, his/her most recent notice of assessment.
iii. take the prevailing basic allowance within the meaning of Section 28 of the Inland Revenue Ordinance (Cap 112) as his/her relevant income if the self-employed person satisfies the trustee of the scheme concerned that he/she is unable to provide evidence of relevant income.
The Legislative Council has passed the amendment of minimum level of relevant income for MPF contribution. What are the amendments and what impact do they have towards the employers, employees and self-employed persons?
The minimum level of the relevant income for MPF contributions was revised from HK$6,500 to HK$7,100, effective on 1 November 2013. As a result of the amendment, for contribution periods starting on or after 1 November 2013, employees with a monthly relevant income less than HK$7,100 will not be required to make their part of contribution, but their employers will have to continue making the employer’s part of contribution. Self-employed persons with relevant income less than HK$7,100 monthly or HK$85,200 yearly do not have to make contributions. Please note that if you are not required to make mandatory contributions as an employee or self-employed person by reason of this amendment, you may still choose to make voluntary contributions.
The Legislative Council has passed the amendment of maximum level of relevant income for MPF contributions, effective 1 June 2014. What are the amendments and what impact do they have towards the self-employed persons?
For contribution periods commencing on or after 1 June 2014, the maximum level of the relevant income for MPF contributions was amended from HK$25,000 to HK$30,000 monthly and from HK$300,000 to HK$360,000 yearly. As a result of the amendment, the maximum contributions will be adjusted from HK$1,250 to HK$1,500 monthly or from HK$15,000 to HK$18,000 yearly accordingly.
