PeopleSoft Global Payroll for Hong Kong 9.1 PeopleBook

Administering Mandatory Provident Fund Contributions

This chapter provides overviews of the administration of Mandatory Provident Fund (MPF) contributions and MPF proration rules, and discusses how to:

Make statutory and customary MPF deductions.
Accommodate MPF exemption rules and limits.
Calculate permitted period MPF contributions.
Calculate regular MPF contributions.
Set up additional MPF recipient details.
Submit the Remittance Statement.

Understanding the Administration of Mandatory Provident Fund Contributions

This section discusses the administrative and reporting requirements of MPF administration and maintenance to:

Support both employee and employer payments to a nominated fund in accordance with the calculation of eligibility rules for MPF legislation.

These deduction rules cover legislative MPF requirements such as permitted period processing, age eligibility, and the contribution holiday rule.
Provide reports to support MPF administrative requirements.

MPF reports such as the Remittance Statement and Terminated Employees Report enable you to manage MPF contributions.

The following diagram displays the rules and options that you are required to set up or exercise to ensure correct MPF calculation and system outputs:

User inputs and system outputs for Mandatory Provident Fund deductions

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Common Elements Used in This Chapter

Casual Employee (as defined by MPF Ordinance)	An employee engaged in the construction or catering industry, who is employed on a daily basis or for a fixed period of less than sixty days.
Contribution Day	For non-casual employees, the tenth day after the last day of the contribution period or the contribution period in which the permitted period ends—whichever is later. The employer must contribute to a scheme for their employees on or before the tenth day after the last day of the contribution period. For casual employees (who are not members of an industry scheme), this is the tenth day after the last day of the relevant contribution period, or the contribution period in which the permitted period ends—whichever is later. The employer and the approved trustee of the scheme concerned approve one of the following days: The day on which the casual employee is paid. The tenth day after the last day of the relevant contribution period.
Contribution Holiday	An employee does not have to contribute to MPF for the first thirty days of employment. The first thirty days is referred to as the contribution holiday. An employee must start paying MPF from the thirty-first day of employment.
Contribution Period (non-casual employee)	Regarded as the payroll period. If an employee is paid on a calendar month basis and the payment pattern is specified in the employment contract, the contribution period should be one calendar month.
Employee Reporting Period	The pay period in which the holiday contribution period ends. Employee's can start contributing to MPF in this period.
Employer Reporting Period	The pay period subsequent to the period in which the contribution holiday ends. The remittance report and payslip are required to disclose the contribution amount and contribution dates within the permitted period.
Mandatory Provident Fund (MPF)	A compulsory retirement plan scheme for employees between the ages of 18 and 65, implemented by the government of Hong Kong to help ensure a financially sound retirement for the territory's workforce. Under MPF, both the employer and employee make regular mandatory contributions into an employee's account, with benefits payable at retirement.
Permitted Period	For casual employees, the period within which the employer must enroll the employee into a registered scheme—ten days for casual employees.
Permitted Period MPF Deduction	An MPF deduction (contribution amount) for the permitted period required for the MPF Remittance report. Used to report MPF contribution within the permitted period and does not contribute to balance accumulators.
Regular MPF Deduction	Regular MPF deductions are used for regular deduction processing in payroll and contribute to balance accumulators. There are two deduction elements. One element resolves the amount for payroll and the other resolves for reporting.

Viewing Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Hong Kong. Instructions for running the query are provided in the PeopleSoft Global Payroll 9.1 PeopleBook.

Understanding MPF Proration Rules

Proration of relevant income only occurs for a new hire or rehire for employer contributions and when an employee turns 18 years of age within the period.

This section discusses:

The MPF PO REVLNT INCM proration rule.
The MPF PO 18TH BTHDAY proration rule.
The MPF PO 65TH BTHDAY proration rule.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Accommodating MPF Exemption Rules and Limits

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Defining Proration Rules

The MPF PO REVLNT INCM Proration Rule

The MPF PO REVLNT INCM proration rule is used to prorate relevant income for new hire/rehires. The proration rule calculation is:

Days of service since period hire date or rehire date / number of days in a period.

The MPF FM POST EEVOL1 formula prorates the employee voluntary contribution amount if the employee is a new hire.

The MPF PO 18TH BTHDAY Proration Rule

If the employee's eighteenth birthday falls within the contribution period in which the thirty first day of employment falls, prorating of the minimum and maximum levels of relevant income for the employee's first mandatory contribution is required. The MPF PO 18TH BTHDAY proration rule prorates relevant income when the employee turns 18 years of age. The proration rule calculation is defined as follows:

Number of days contributed in a month / number of days in month.

If a period spans two months, for example October 15, 2007 − November 1, 2007, the relevant income is 10000 HKD and the employee's birthday falls on the 16th, then contribution is prorated as follows:

(16/31 x 10000 x 5%) + (14/30 x 10000 x 5%) = 508.06.

For example, suppose an employee is hired on February 1 and turns 18 on May 16, 2007, then the employee's relevant income for May 2007 is 10000 HKD. MPF for May is calculated as follows:

31st day of employment: March 3, 2007

18th birthday: May 16, 2007

Relevant income (May 16 - 31, 2007): 10000 HKD X 16/31 = 5161.29 HKD

Max relevant income level: 20000 HKD

Min relevant income level: 4000 HKD

Employee's mandatory contribution for May 2007: 5161.29 HKD X 5%

Employer's mandatory contribution for May 2007: 5161.29 HKD X 5%

MPF PO 65TH BTHDAY Proration Rule

Effective October 1 2004, the MPF guidelines were revised by the Hong Kong Government. The revised guidelines stipulate the new calculation of mandatory contributions for employees who attain the age of 65 on or after 1 October 2004. Mandatory contributions are required based on the relevant income earned by the employees up to the day before their 65th birthday regardless of when the income was actually paid to them.

If the employee's 65th birthday falls within the pay period, prorating of the minimum and maximum levels of relevant income for the employee's last mandatory contribution is required. The MPF PO 65TH BTHDAY proration rule prorates relevant income when the employee turns 65 years of age. The proration rule calculation is defined as follows:

Number of days contributed in a month / number of days in month.

Example 1: Relevant income earned up to the day before the 65th birthday is between the minimum and maximum levels of $5,000 and $20,000 per month:

Date of 65th birthday: 18 October 2004

Contribution period start date : 1 October 2004

Contribution period end date: 31 October 2004

Relevant income: $12,000 (for October 2004)

Amount of employer contribution: $329.13 ($12,000 x 17/31 x 5%)

Amount of employee contribution: $329.13 ($12,000 x 17/31 x 5%)

Example 2: Relevant income earned up to the day before the 65th birthday is above the maximum level of $20,000 per month:

Date of 65th birthday: 18 October 2004

Contribution period start date: 1 October 2004

Contribution period end date: 31 October 2004

Relevant income: $38,000 (for October 2004)

Amount of employer contribution: $1,000.00 ($20,000 x 5%)

Amount of employee contribution: $1,000.00 ($20,000 x 5%)

Making Statutory and Customary MPF Deductions

This section discusses the MPF deductions that are delivered by PeopleSoft.

PeopleSoft supplies the following deductions for the common MPF contributions. The deductions are PeopleSoft maintained and are all defined with a calculation rule of Base x Percent. Mandatory and voluntary deductions are delivered for both employers and employees.

Deduction	Description
ERMPFMN1 Employer Regular MPF Mandatory Contribution	Used for employer regular MPF mandatory contributions. Base = MPF FM ERMN1 Percent = 5 (Statutory)
ERMPFMN2 Employer Permitted Period MPF Mandatory Contribution	Used for employer MPF mandatory contributions within the sixty-day permitted period. Base = MPF FM ERMN2 Percent = 5 (Statutory)
ERMPFVOL1 Employer Regular MPF Voluntary Contribution	An additional 5 percent of relevant earnings and should be given to all employees. The rest of the rules are the same as those for the MPF Employer Voluntary deduction. The deduction is used for employer MPF voluntary contribution. Base = MPF FM ERVOL1 BASE Percent = 5 (Customary)
ERMPFVOL2 Employer MPF Permitted Period Voluntary Contribution	Used for employer MPF voluntary contributions within the sixty-day permitted period. Base = MPF FM ERVOL2 BASE Percent = 5 (Customary)
EEMPFMN1 Employee Regular Mandatory MPF Contribution	Used for employee MPF mandatory contributions. Base = MPF FM EEMN1 BASE Percent = 5 (Statutory)
EEMPFMN2 Employee Permitted Period Mandatory MPF Contribution	Used for employee MPF mandatory contributions within the sixty-day permitted period. Base = MPF FM EEMN2 BASE Percent = 5 (Statutory)
EEMPFVOL1 Employee Regular Voluntary MPF Contribution	Used for employee MPF voluntary contributions. Entered at the deduction assignment level. Base = Payee Level Percent = 100 (Customary)
EEMPFVOL2 Employee Permitted Period Voluntary contribution	Used for employee MPF voluntary contributions within the sixty-day permitted period. Entered at the deduction assignment level. Base = Payee Level Percent = 100 (Customary)

Deduction

Description

ERMPFMN1

Employer Regular MPF Mandatory Contribution

Used for employer regular MPF mandatory contributions.

Base = MPF FM ERMN1

Percent = 5

(Statutory)

ERMPFMN2

Employer Permitted Period MPF Mandatory Contribution

Used for employer MPF mandatory contributions within the sixty-day permitted period.

Base = MPF FM ERMN2

Percent = 5

(Statutory)

ERMPFVOL1

Employer Regular MPF Voluntary Contribution

An additional 5 percent of relevant earnings and should be given to all employees. The rest of the rules are the same as those for the MPF Employer Voluntary deduction. The deduction is used for employer MPF voluntary contribution.

Base = MPF FM ERVOL1 BASE

Percent = 5

(Customary)

ERMPFVOL2

Employer MPF Permitted Period Voluntary Contribution

Used for employer MPF voluntary contributions within the sixty-day permitted period.

Base = MPF FM ERVOL2 BASE

Percent = 5

(Customary)

EEMPFMN1

Employee Regular Mandatory MPF Contribution

Used for employee MPF mandatory contributions.

Base = MPF FM EEMN1 BASE

Percent = 5

(Statutory)

EEMPFMN2

Employee Permitted Period Mandatory MPF Contribution

Used for employee MPF mandatory contributions within the sixty-day permitted period.

Base = MPF FM EEMN2 BASE

Percent = 5

(Statutory)

EEMPFVOL1

Employee Regular Voluntary MPF Contribution

Used for employee MPF voluntary contributions. Entered at the deduction assignment level.

Base = Payee Level

Percent = 100

(Customary)

EEMPFVOL2

Employee Permitted Period Voluntary contribution

Used for employee MPF voluntary contributions within the sixty-day permitted period. Entered at the deduction assignment level.

Base = Payee Level

Percent = 100

(Customary)

Note. Earnings that are included in the MPF calculation are referred to as relevant income and include wages, salaries, leave pay, fee, commission, bonus, and gratuity. Because not all earnings are included in MPF calculations, it is possible to define the earnings that should be included in MPF calculation using the earning component.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Accommodating MPF Exemption Rules and Limits

This section provides overviews of accommodating MPF exemption rules and limits, the MPF contribution holiday rule, age eligibility rules, and permitted period termination rules, and discusses how to:

Define casual employees for MPF contributions.
Exclude employees from MPF calculations.
Apply maximum and minimum limits to MPF contributions.

Understanding Accommodating MPF Exemption Rules and Limits

This section discusses the exceptions and limits for MPF contributions.

Although it is mandatory for employers to pay MPF contributions for each employee, the following exemptions and limits exist:

An employee does not have to contribute to MPF for the first thirty days (contribution holiday) of employment.
If the employee is paid on a monthly calendar basis, reaches the age of 65 prior to the period begin date, and is not terminated, then MPF contribution is not required by either the employer or the employee for that month.
If an employee terminates within the first sixty days of employment (permitted period), the employer is exempted from making the MPF contribution.
For casual employees, the sixty-day (permitted period) rule for employers and thirty-day (contribution holiday) rule for employees does not apply.
Mandatory contributions are subject to maximum and minimum levels.

For example, employees earning less than 5000 HKD per month in relevant income do not have to contribute to MPF, but the employer still needs to contribute 5 percent of the employee's income, even if the employee earns less than 5000 HKD in relevant income in the month. Employer mandatory contributions have no minimum levels.

Note. No age eligibility or minimum and maximum rules are applied to employee voluntary deductions. However, employer voluntary deductions do check for these rules.

Understanding the MPF Contribution Holiday Rule

This section discusses generation control resolution and the MPF deduction.

A generation control resolves the MPF deduction if the employee's service days are greater than thirty days. For example, for the EEMPFMN1 deduction, the MPF generation control MPF GC EEMN1, using formula MPF FM RSLV EEMN1, resolves if the employee's service days are greater than thirty days (not within the holiday contribution period) and no additional exemptions apply.

Depending on whether the employee is hired or rehired, days of service are calculated as:

Period End Date − Hire Date + 1

Period End Date − Rehire Date + 1

If the contribution holiday end date MPF DT HOL END DT is before or the same as the PERIOD END DATE, then the formula MPF FM HOL END DT resolves. The formula determines if the period is greater than the contribution holiday end date.

The formula MPF FM END HOL PRD compares the holiday contribution end date to the pay period begin date. The rule states that if the holiday end date does not fall on the first day of a pay period then the employee's MPF contribution will be waived until the next full pay period. Contributions begin when the pay period begin date is greater than the contribution holiday end date. For example, suppose a monthly paid employee is hired on February 1, 2007, and the holiday end period is April 3, 2007. Because the April pay period starts on the 1st, the employee will not have to contribute MPF until the next pay period (May 1, 2007).

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Understanding MPF Age Eligibility Rules

This section discusses the formulae used to check the employees age before resolving and determining the payment of MPF contributions.

The formula MPF FM AGE 65 checks if the employee is 65 years of age. The formula calls GP AGE IN YEARS to calculate the employee's age and resolves when the following conditions are true:

The employee's age is 65.
The employee's birthday falls within the period and on or before the payment date. The formula MPF FM 65 BIRTHDAY is used to check if the employee's 65th birthday falls within the pay period.

Note. GP AGE IN YEARS calculates the number of years from the employee's birthdate to the period end date.

The generation controls MPF GC ERMN1 and MPF GC ERMN2 stop resolving MPF mandatory deductions once the employee has reached 65 before the period begin date. The following example illustrates how the payment date determines the payment of MPF contributions.

Employees Turning 65 Before The Period End Date

Suppose an employee turns 65 before the period end date. In Period 1, MPF is resolved; in Period 2, MPF is also resolved because the employee turns 65 before the period end date, however, the MPF values are prorated up to the day before the employee's 65th birthday. In Period 3, since the employee is already 65, MPF isn't resolved. The following diagram illustrates this scenario:

An employee turns 65 before the period end date

Note. If the employee ceases employment immediately upon reaching the age of 65 and all outstanding relevant income is paid or payable on the day before the employee's 65th birthday, the final payment is considered a relevant income and contributions are payable on it.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Understanding MPF Permitted Period Termination Rules

This section discusses MPF and termination rules.

Termination is only considered if the employee terminates from a primary job. The array MPF AR PRIM JOB retrieves the hire date, rehire date, and termination date from the job table for the employee's primary job. The formula MPF FM TERM CONTRB checks if the employee terminates before the employee's birthday, using the following elements:

MPF FM TERMINATE - Determines if the termination is within the permitted period.
MPF VR TERM DATE - Resolves the termination date.
MPF DT BIRTHDAY - Resolves the birth date.

The formula MPF FM TERM CONTRB resolves if the termination date is before the employee's birthday. If the employee turns 65 within the contribution period and terminates before age 65, then the MPF contribution is deducted.

Note. If an employer decides to make the first contribution during the first sixty days of employment (permitted period), MPF is calculated and deducted for the employee.

Working with Contributions on the Last Day of Employment

The contribution period for a terminated employee can also end on the date the employee is terminated. If the employee's contract states that the final contribution should be paid on the last date of employment, then the mandatory contributions for the relevant employee should be paid to the trustee on or before the tenth day after the date of cessation of employment.

For example, suppose a relevant employee paid on a calendar month basis ceases employment on April 10, 2007 and all outstanding relevant income is paid on that day, the mandatory contributions for the last contribution period should fall due on April 20, 2007. However, if their salary for April is payable under the employment contract on April 30 (following the normal pay cycle) the contribution period would end on April 30, and the mandatory contributions would be due on May 10.

Note. In the period the employee terminates, the maximum and minimum limits are not prorated.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Calculating Absence Entitlements on Termination

Defining Casual Employees for MPF Contributions

Contributions for casual employees are calculated each pay or contribution period. Casual employees are processed in a separate pay group from other employees as they are most often paid daily.

As there is a difference between the way that casual employees and non-casual employees are calculated, you can mark an employee as a casual employee. The variable MPF VR CASUAL FLG (casual pay group staff flag) is delivered as customary data and is attached at the pay group override level to indicate whether the pay group is for casual employees.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Excluding Employees from MPF Calculations

This section discusses how to exclude specific employees from MPF calculations.

Although all members of the workforce between the ages of 18 and 65 are eligible for MPF, you may have to exclude an employee from MPF calculations. The CM SE INITIALISE section (common initialize section paid by eligibility) is delivered as an example. You can change the section to pay by payee and exclude specific employees from MPF calculations by entering the deduction as inapplicable at the deduction assignment level. By doing this, the employee is exempted from MPF calculations in every pay run.

Appendix: Global Payroll for Hong Kong Reports

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Applying Maximum and Minimum Limits to MPF Contributions

Mandatory contributions are subject to maximum and minimum levels. For example, employees earning less than 5000 HKD per month in relevant income do not have to contribute to MPF. However, the employer still needs to contribute 5 percent of the employee's income, even if the employee earns less than 5000 HKD in relevant income in the month. Employer mandatory contributions have no minimum levels. For employees earning more than 20000 HKD per month, mandatory contributions for employer and employee are capped at 1000 HKD (5 percent of 20000 HKD).

Note. MPF calculations for pay periods other then monthly are identical, except that the maximum and minimum levels of relevant income will vary.

The MPF BR MINMAX REVL bracket stores the minimum (variable MPF VR MIN LEVEL) and maximum (variable MPF VR MAX LEVEL) relevant income ceiling for each period frequency. The following table lists the maximum and minimum levels of contribution for the different pay periods:

Pay Period	Min Level of Relevant Income	Max Level of Relevant Income
Daily	160	650
Weekly	1120	4550
Biweekly	2240	9100
Fortnightly	2240	9100
Monthly	5000	20000
Quarterly	8000	40000
Yearly	48000	240000

This rule enables you to run multiple calendars in a period. For example, you can run a regular pay run and thirteenth month pay in separate calendars. The rules calculate contributions as follows:

Regular Run

Relevant Income = 19000

MPF contribution = 19000 x 5%

Thirteenth Month

Relevant Income = 19000

MPF Contribution = 1000 x 5%

MPF contribution is calculated on 1000 HKD instead of 19000 HKD in the thirteenth month pay run because MPF is capped at 20000 HKD.

Note. If an employee has concurrent jobs, the maximum and minimum limits are applied per employee, not per job. The holiday period is applied to the earliest hire date (or rehire date) of the employee's primary job regardless of whether the employee has concurrent jobs.

Commencing Employee MPF Contributions

Contributions for the period in which the employee's contribution holiday ends are calculated on a prorated basis. Prorating may be performed based on the number of days in the month. On this basis, the minimum levels of relevant income for one day in October (a 31 day month) and one day in November (a 30 day month) would be 129 HKD and 133 HKD respectively. Accordingly, the minimum levels of relevant income for the week from October 29, 2007 to November 4, 2007 would be:

919 HKD (3 x 129 + 4 x 133)

Note. You can use 160 HKD and 650 HKD as the daily minimum and maximum levels of relevant income. The minimum and maximum levels for contribution periods longer than a day are calculated as a multiple of the daily minimum and maximum levels.

For example, suppose an employee is paid monthly and commences employment on April 11 and his or her monthly salary is 18000 HKD, and the employee's contribution holiday ends on May 10. For the purposes of calculating their mandatory contributions for the month ending May 31:

The employee's relevant income = 12194 HKD (being 18000 HKD x 21/31)

The maximum relevant income level = 13545 HKD (being 20000 HKD / 31 rounded to closest dollar x 21)

The minimum relevant income level = 2709 HKD (being 4000 HKD / 31 rounded to closest dollar x 21)

Since the relevant income is between 2709 HKD and 13545 HKD, the mandatory contributions for the month ending May 31= 609.28 HKD (being 12194 HKD x 5%).

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Calculating Permitted Period MPF Contributions

This section provides an overview of permitted period MPF contributions and discusses how to:

Calculate employer mandatory permitted period MPF contributions.
Calculate employee mandatory permitted period MPF contributions.
Calculate employer and employee voluntary permitted period MPF contributions.

Understanding Permitted Period MPF Contributions

Permitted MPF deductions only resolve during the sixty-day employment period (permitted period). One MPF deduction is resolved in every period for reporting, so the reports can retrieve the contribution periods in which the permitted MPF deduction is resolved.

The formula MPF FM PERM PERIOD checks whether the current period falls within the permitted period and resolves whether the period begin date is less than or equal to the permitted period end date.

The date MPF DT PERM END DT returns the permitted period end date. Depending on whether the employee is hired or rehired, the permitted period end date calculation is as follows:

Hire date + 59 days

Rehire date + 59 days

Note. It is possible that you will make MPF contributions immediately and not wait until the permission period has elapsed. Since rules cater for the permission period, you are required to remove all associated PeopleSoft rules that cater for the permission period; hence, these deductions are processed as regular deductions.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Regular MPF Contributions

Accommodating MPF Exemption Rules and Limits

Calculating Employer Mandatory Permitted Period MPF Contributions

The ERMPFMN2 contribution is calculated at 5 percent of relevant income for employees between the ages of 18 and 65 if they have relevant income greater than 4000 HKD for the month. The maximum relevant income that is included in the calculation is 20000 HKD.

The formula MPF FM ERMN2 with generation control MPF GC ERMN2 (using formula MPF FM ERMN2) resolves if the following conditions are true:

The employee's age is greater than or equal to 18 and less than 65, or
The employee's age is 65 and their birthday falls within the period, and
The period is within the permitted period.

The generation control stops resolving the deductions once the employee's age is above 65 before the period begin date.

The bracket MPF BR MINMAX REVL retrieves the minimum and maximum amount associated with the period frequency.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Regular MPF Contributions

Accommodating MPF Exemption Rules and Limits

Calculating Employee Mandatory Permitted Period MPF Contributions

The formula MPF FM EEMN2 BASE with generation control MPF GC EEMN2 (using formula MPF FM RSLV EEMN2) calculates the relevant income for employee mandatory contributions within the permitted period, based on the following:

Relevant income is prorated if the employee is a new hire or rehire (using the formulas MPF FM SET STARTDT, MPF FM PERM STRTDT, and MPF FM SET EE STRT).
Relevant income is prorated if the employee turns 18 years of age (using formula MPF FM AGE 18-64 and prorate using MPF PO 18TH BTHDAY).
Relevant income is prorated if the employee turns 65 years of age during the pay period (using formula MPF FM 65 BIRTHDAY and prorate using MPF PO 65TH BTHDAY).

The bracket MPF BR MINMAX REVL retrieves the minimum and maximum amount associated with the period frequency.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Regular MPF Contributions

Accommodating MPF Exemption Rules and Limits

Calculating Employer and Employee Voluntary Permitted Period MPF Contributions

The formula MPF FM ERVOL2 BASE with generation control MPF GC ERVOL2 (MPF GC EEVOL2 for employees) using formula MPF FM RSLV ERVOL2 (MPF FM RSLV EEVOL2 for employees) resolves when the period is within the permitted period.

The post processing formula MPF FM POST EEVOL2 prorates the amount.

The formula MPF FM MAX LVL using variable MPF VR MAX LEVEL determines the maximum contribution level.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Calculating Regular MPF Contributions

Accommodating MPF Exemption Rules and Limits

Calculating Regular MPF Contributions

This section discusses how to:

Calculate employers regular mandatory MPF contributions.
Calculate employees regular mandatory MPF contributions.
Calculate employer regular voluntary MPF contributions.
Calculate employees regular voluntary MPF contributions.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Accommodating MPF Exemption Rules and Limits

Calculating Permitted Period MPF Contributions

Calculating Employers Regular Mandatory MPF Contributions

The ERMPFMN1 contribution is calculated at 5 percent of relevant income (5 percent of earnings that are included in the MPF calculation). MPF need only be calculated for employees between 18 and 65 years of age and only on the first 20000 HKD of relevant income for the month. For casual employees, contributions are calculated and paid from day one.

While contributions have to be calculated from the employees hire date, the first contribution to MPF for non-casual employees does not have to be made on or before the first contribution day after the sixty-day employment period ends.

The post processing formula MPF FM POST ERMN1 checks if it is the reporting period. If it is, the MPF contributions from the permitted period (sixty-day employment period) and the current period are totaled.

The formula MPF FM ERMN1 with generation control MPF GC ERMN1, using formula MPF FM RSLV ERMN1, resolves when the employee is between 18 and 65 (using formula MPF FM AGE 18-64), and the contribution is calculated on the first 20000 HKD of relevant income for the month.

Contributions for casual employees with the MPF VR CASUAL FLG are calculated and paid from day one.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Accommodating MPF Exemption Rules and Limits

Calculating Permitted Period MPF Contributions

Calculating Employees Regular Mandatory MPF Contributions

The formula MPF FM EEMN1 BASE with generation control MPF GC EEMN1, using formula MPF FM RSLV EEMN1, resolves the deduction if the employee's service days are greater than thirty days (not within the holiday contribution period).

The MPF FM EEMN1 formula calculates the relevant income for regular employee mandatory contributions based on the following:

Relevant income is prorated if the employee is a new hire or rehire. (Using MPF PO REVLNT INCM).
Relevant income is prorated if the employee turns 18 years of age. (Using MPF PO 18TH BTHDAY).
Relevant income is prorated if the employee turns 65 years of age. (Using MPF PO 65TH BTHDAY).

The bracket MPF BR MINMAX REVL retrieves the minimum and maximum amount associated with the period frequency.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Accommodating MPF Exemption Rules and Limits

Calculating Permitted Period MPF Contributions

Calculating Employer Regular Voluntary MPF Contributions

The formula MPF FM ERVOL1 BASE with generation control MPF GC ERVOL1, using formula MPF FM RSLV ERVOL1, resolves based on the following:

Relevant income is prorated if the employee turns 18 years of age— (Using MPF PO 18TH BTHDAY).
If the employee is not 18 years of age, the bracket MPF BR MINMAX REVL retrieves the minimum and maximum amount associated with the period frequency.

The post processing formula MPF FM POST ERVOL1 checks if it is the reporting period. If so, the MPF contribution from the permitted period and the current period are totaled.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Accommodating MPF Exemption Rules and Limits

Calculating Permitted Period MPF Contributions

Calculating Employees Regular Voluntary MPF Contributions

The generation control MPF GC EEVOL1, using formula MPF FM RSLV EEVOL1, calculates the relevant income for regular employer mandatory contributions based on the following:

Relevant income is prorated if the employee turns 18 years of age. (Using MPF PO 18TH BTHDAY).
If the employee is not 18 years of age, then the bracket MPF BR MINMAX REVL retrieves the maximum amount associated with the period frequency.

The formula MPF FM POST EEVOL1 prorates the deduction amount.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Accommodating MPF Exemption Rules and Limits

Calculating Permitted Period MPF Contributions

Setting Up Accumulators

Setting up Additional MPF Recipient Details

The administrative body to which MPF deductions are paid is treated in the system the same way as any other deduction recipient although for reporting purposes some additional MPF-specific detail is stored at recipient level.

See Setting Up Additional Mandatory Provident Fund Report Details.

Calculating Mandatory Provident Fund Earnings

Calculating Mandatory Provident Fund Deductions

Accommodating MPF Exemption Rules and Limits

Calculating Permitted Period MPF Contributions

Calculating Regular MPF Contributions

Submitting the Remittance Statement

The GPHKMPF1 Remittance Statement enables you to report on mandatory and voluntary MPF contributions that were deducted for the contribution period for the MPF provider. The statement is used to inform the trustee of the amount of MPF contributions paid for relevant employees.

If an employee changes pay groups in the pay period, the employee is reported only once under the most recent pay group. Active employees, excluding those who haven't been enrolled yet (under 18 or less than 60 days employment), are included in the statement even if they have no relevant earnings for the month. Employees with no relevant MPF earnings are included in the existing employees section of the report.

MPF contribution amounts are printed for each type of MPF deduction. Contributions for employees with different contribution periods (such as weekly and monthly) are reported in separate remittance statements.

As it is possible to have multiple pay groups with the same remittance period, you can enter multiple pay groups on the run control.

To provide for reporting terminated employees' MPF contributions, change the calendar payment date to the appropriate date, then run payroll for terminated employees through a group list. Having done this, you can generate the remittance statement for terminated employees because the report is generated by payment date and group list.

However, if you must run it for continuing employees, set the appropriate calendar payment date before running the payroll so that you can generate the report with the regular payment date and regular group list, excluding the terminated group list.

Note. While service providers might specify their own remittance statements, the MPF Authority specifies the content and format of the remittance statement with which the service provider must comply. The remittance statement has, therefore, been defined in accordance with the content and format of the statement specified by the MPF Authority.

The statement is sorted by recipient name (MPF provider), because while in most organisations there is only one provider, it is possible for an organisation to use multiple MPF providers.

Legislation requires the employer to make MPF contributions within 10 days of the employee's termination date during regular periods. Therefore, you must generate the Remittance Statement within 10 days of termination.