Hong Kong Fact-File Part 7:
Business Owner Welfare and Lifestyle

7.2 Hong Kong Business Domestic Pensions

The structure of pension provision for individuals in business: Domestic Pensions

Hong Kong operates a Mandatory Provident Fund to which all working individuals have to contribute. For self-employed individuals, the minimum contribution is 5% of relevant income. If relevant income is less than HKD5,000 per month or HKD60,000 per annum no mandatory contributions are required. Relevant income is calculated on assessable profit in accordance with the Inland Revenue Ordinance. Contributions may be paid monthly or annually.

Should an individual cease to be self-employed and become an employee, the accrued benefits may either be retained in the existing scheme or transferred to the scheme in which the employer participates.

Employers and employees are required to contribute 5% up to a maximum of HKD1,000 per month of an employee’s salary to the MPF. Employee contributions are exempted if the monthly salary is less than HKD5,000, however, the employer must still contribute 5% of the salary. Employer contributions of up to HKD12,000 per annum are classed as deductible allowances from profits tax.

Company directors are not required to enrol themselves in the Mandatory Provident Fund scheme unless they are also employed by said company.

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