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Hong Kong – The Maximum And Minimum Relevant Income Levels To Be Increased For Mandatory MPF Contributions.

18 November, 2013

 

Legal News & Analysis – Asia Pacific – Hong Kong – Labour & Employment

 

On 17 July 2013, resolutions were passed by the Legislative Council to increase both the minimum relevant income (“MinRI“) and the maximum relevant income (“Max RI“) levels for the purpose of making mandatory contributions under the Mandatory Provident Fund Schemes Ordinance. The changes are summarised below.


Min RI


With effect from 1 November 2013:-

  1. the monthly MinRI will be increased from HKD6,500 per month to HKD7,100 per month (applicable to employees remunerated on monthly basis or less frequently than monthly basis as prorated or self-employed persons);
  2. the daily MinRI will be increased from HKD250 per day to HKD280 per day (applicable to employees remunerated more frequently than monthly basis or casual employees of an industry scheme); and
  3. the annual MinRI will be increased from HKD78,000 per year to HKD85,200 per year (applicable to self-employed persons).


As a result of the aforesaid changes, starting from 1 November 2013, whilst the duty on the part of the employer remains unchanged, only those employees who earn an income of more than the above Min RIs (as the case may be) will be required to make mandatory employee’s contributions.


Max RI


With effect from 1 June 2014:-


  1. the monthly Max RI will be increased from HKD25,000 per month to HKD30,000 per month (applicable to employees remunerated on monthly basis or less frequently than monthly basis as prorated or self-employed persons);
  2. the daily Max RI will be increased from HKD830 per day to HKD1,000 per day (applicable to employees remunerated more frequently than monthly basis or casual employees of an industry scheme); and
  3. the annual Max RI will be increased from HKD300,000 per year to HKD360,000 per year (applicable to self-employed persons).


The effect of these changes is that starting from 1 June 2014, the maximum level of contribution required from both employers and employees whose relevant income is more than the current income cap (i.e. more than HKD25,000 per month, HKD830 per day or HKD300,000 per year as the case may be) will be increased. For example, for an employee whose monthly income is HKD28,000, the level of contribution required from both the employer and the employee will be increased from HKD1,250 (i.e. HKD28,000 capped at HKD25,000 x 5%) to HKD1,400 (i.e. HKD28,000 x 5%).


Deacons

 

For further information, please contact:

 

Gladys Ching, Deacons
gladys.ching@deacons.com.hk

 

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