Summary
The Hong Kong Social Security system is a provident fund which is primarily designed to deliver benefits that can be withdrawn at retirement age or in a limited range of other circumstances. It is essentially a mandatory personal savings scheme in which the individual has a degree of choice of the investment strategy which will apply to their savings.
Details
Contributions
The Hong Kong ‘MPF’ (Mandatory Provident Fund) is comparatively low cost. Employees and employers are generally required to pay 5% contributions each, and contributions are capped at around $200 per month.
Treaties
Hong Kong has no social security agreements but due to the MPF exemption set out below, it is unlikely that expatriates moving to Hong Kong will have a liability to MPF. Those leaving Hong Kong temporarily will only continue to be subject to MPF if they remain on a HK contract – and may also be subject to host country social taxes.
Exemptions
Foreigners who move to Hong Kong for employment are only subject to MPF if their planned assignment ore presence is for more than 13 months and/or they are not covered by an overseas retirement fund.
Administration
MPF withholding is operated through payroll.
Benefits
The most common MPF scheme is a Master Trust Scheme, where benefits accrue until the employee is 65, at which point benefits can be withdrawn as a lump sum. Early withdrawal can happen after the age of 60, when an individual permanently leaves Hong Kong, becomes incapacitated, or dies.
Other
Employee contributions to the MPF are generally tax deductible. Voluntary contributions are usually permitted to increase the potential for post-retirement benefits. Individuals permanently departing Hong Kong can withdraw their accrued contributions even if they haven’t reached retirement age.
Social security insights are intended to provide quick and straightforward insights into social security regimes. Always seek professional advice based on actual circumstances before acting.
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