MPF Tax matters
A. mandatory contributions and general voluntary contributions
An employee can claim tax deduction for the employee’s mandatory contributions made to an MPF scheme, subject to the maximum amount as follows: $18,000 for the year of assessment 2015-16 and each subsequent year of assessment.
Voluntary contributions made by employees are not tax-deductible, except for tax-deductible voluntary contributions.
An employer can claim tax deduction for the mandatory and voluntary contributions made for an employee, to the extent that it does not exceed 15% of the employee’s total emoluments.
Self-employed persons (SEPs)：
An SEP can claim mandatory contributions which the SEP has made for himself/herself to an MPF scheme as allowable business expenses for Hong Kong profits tax purposes. The maximum amount that can be claimed for deduction is as follows: $18,000 for the year of assessment 2015-16 and each subsequent year of assessment.
Voluntary contributions made by SEPs are not tax-deductible, except for tax-deductible voluntary contributions.
B. For special voluntary contributions, different staff’s contribution ratios are different, but all belong to the same contribution plan, and a unified MPF report is required.
Click on 「Benefit」>「Setting」enter the Benefit Settings interface, then you can click on「Edit」to modify the existing benefit scheme, you can also click on「+New」to add a new benefit scheme.
「Benefit Settings」include two parts: mandatory contributions settings and voluntary contributions settings.
mandatory contributions settings
It is used for display when downloading MPF reports, and can be modified at any time without affecting salary and MPF calculations.
You can input 「Name of Scheme」，「Scheme Registration No.」，「Name of Employer」，「Name of Contact Person」，「Telephone No.」，「Employer Participation No.」and「Address」according to the real situation.
The system has preset data according to the current laws of Hong Kong, no need to modify
It refers to all monetary payments paid or payable by an employer to an employee, including wages, salary, leave pay, fees, commissions, bonuses, gratuities, perquisites or allowances, but excluding severance payments or long service payments under the Employment Ordinance.
Income Increase: select the income items that need to be included in MPF related income, such as commissions, bonuses, etc., in this case, should select total gross pay.
Income Deduction: you need to select the deduction items that do not need to be included in MPF related income, such as unpaid leave deduction, sick leave deduction, etc.
After setting the plan details, just click on「Save」. If your company still has voluntary contributions, you can click 「Next」 to continue setting.
After inputting the above information, click 「Save」 to complete the MPF scheme setting. The next step is to assign a scheme to the employee.
Designate a scheme for employees
Click 「Benefits」> 「Benefits File」 to enter the employee scheme file list interface, where you can see all employees' scheme information.
Unregistered: Shows the list of employees whose scheme is empty and who is on the job.
MPF Exempt: a list of working employees who have been set up as scheme exempt persons.
Select an employee and double-click or click 「View」 to enter the file details interface> 「Edit」. If it is an MPF exempt person, open 「the MPF Exempt Persons 」 button and save it in blue without any other settings.
If you are not a MPF exempt person, enter the contribution number (if you are participating in the MPF plan with an employee ID number, you do not need to enter it), select the scheme, and the following contribution amount/ratio information will be automatically displayed.
Click 「Auto-fill Dates」, the system will calculate the following four dates based on the entry date and birth date in the employee file. If the automatically calculated date does not match the actual date, you can manually modify it.
Scheme Start Date: The entry date in the employee file is brought out by default
Retirement Date: the date of sixty-five years old calculated from the date of birth in the employee's file
Employee's Contribution Date: the employee's contribution starts on the 1st of the following month after 30 consecutive days of employment
Employer’s Contribution Date: the entry date in the employee’s file
After completing the above settings, clicking on 「Save」can complete the employee scheme settings, and MPF contribution records will be automatically generated during salary calculation.