What are the mandatory employer burdens in Hong Kong?



Modified on: Mon, 20 Oct, 2025 at 8:40 PM

TABLE OF CONTENTS


Employers in Hong Kong are legally required to fulfill several obligations to ensure compliance with labor laws and safeguard employee welfare. These include contributions to the Mandatory Provident Fund (MPF) and securing Employees' Compensation Insurance.



1. Mandatory Provident Fund (MPF)

The MPF is a retirement protection system established by the Hong Kong government. It ensures basic economic security for employees after retirement through mandatory contributions from both employers and employees.


Employer Responsibilities

Employers must:

  • Register eligible employees under an MPF scheme.
  • Make regular contributions to the scheme.
  • Ensure contributions are deposited before the due date set by the MPF Authority (MPFA).

Failure to comply may result in criminal liability and fines.


Who Is Covered?

All employees aged 18 to 65 must participate in the MPF scheme unless exempted by law. Once an employee reaches 65, they may withdraw their contributions.


Contribution Details

  • Mandatory Contributions: Both employer and employee contribute 5% of the employee’s relevant income, subject to:

    • Minimum salary: HK$7,100
    • Maximum salary: HK$30,000
    • Employer’s monthly contribution: HK$355 to HK$1,500

  • Voluntary Contributions: Employers and employees may agree to contribute additional amounts. These are not capped and offer flexibility in retirement planning.


Contribution Holiday

New employees are entitled to a 30-day contribution holiday for mandatory contributions. For example:

  • If employment starts on June 5, the holiday runs until July 4.
  • Contributions are then withheld and included in the August payroll.

Voluntary contributions are not subject to this holiday.


Vesting of Voluntary Contributions

Voluntary employer contributions may be subject to a vesting scale, which determines how much an employee retains based on their length of service:


Years of ServiceVested Percentage
Less than 3 years0%
3–4 years30%
4–5 years40%
5–6 years50%
6–7 years60%
7–8 years70%
8–9 years80%
9–10 years90%
More than 10 years100%

Employers like Horizons may withdraw unvested voluntary contributions if the designated contact period is less than three years. Final reconciliation of these funds is handled directly between Horizons and the relevant organization.


2. Employees' Compensation Insurance

Under the Employees' Compensation Ordinance, employers must purchase insurance to cover work-related injuries.


Who Is Covered?

All employees working under a contract of employment or apprenticeship are covered, including:

  • Full-time and part-time workers
  • Domestic helpers
  • Agricultural workers
  • Seafarers on registered vessels


Premium Calculation

The insurance premium is approximately 0.422% of the employee’s earnings. It is invoiced at the start of the insurance period, with adjustments made based on actual circumstances.

Failure to secure this insurance can result in fines and legal liability for compensation.



Summary

These employer obligations are essential for:

  • Ensuring legal compliance
  • Protecting employees’ financial and physical well-being
  • Supporting long-term retirement planning

Employers must stay informed and proactive in meeting these requirements to avoid penalties and foster a compliant, supportive workplace.

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