Proposal to raise income thresholds for contributions to Mandatory Provident Fund

In the wake of the implementation of the Statutory Minimum Wage, the Government of the Hong Kong Special Administrative Region has proposed to raise the monthly minimum income threshold and maximum income threshold for contributions to the Mandatory Provident Fund. Under the proposal, the monthly minimum income threshold will be raised from HK$5,000 to HK$6,500 since 1 November 2011 and the monthly maximum income threshold will be raised from HK$20,000 to HK$25,000 since 1 June 2012.

Once the monthly minimum income threshold is raised to HK$6,500, an addition of about 180,900 employees and self-employed people will not be obliged to make any mandatory contribution. Once the montly maxmium income threshold is raised to HK$25,000, about 514,500 employees and self-employed people will be obliged to make additional mandatory contributions. This means that people who earn HK$25,000 or more will have to pay an additional mandatory contribution of HK$250 per month. The maximum monthly contribution will be raised by a quarter to HK$1,250. The employer’s contributions will also be raised accordingly.

The proposal is set out in the Mandatory Provident Fund Schemes Ordinance (Amendment of Schedule 2) Notice 2011 and the Mandatory Provident Fund Schemes Ordinance (Amendment of Schedule 3) Notice 2011.

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