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.

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

or

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.

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.

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.

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.