Hong Kong MPF Guide (2026): Contributions, Withdrawals & Job Changes

# Hong Kong MPF Guide (2026): Contributions, Withdrawals & Job Changes

Most people sign their employment contract, agree on a salary, and think the deal is done — then their first payslip arrives with a line labelled "MPF Employee Contribution" deducted. The Mandatory Provident Fund is not optional. It is law. Yet most employees in Hong Kong know little more than "they take 5% every month," leaving everything else — fund selection, job changes, withdrawal rights, the 2026 offset abolition — as a black box.

This guide covers MPF from start to finish: how contributions are calculated, how to choose funds, what to do with your account when you change jobs, when you can actually access the money, and how the Employment (Amendment) Ordinance 2025 — which took effect on 18 January 2026 — fundamentally changed the relationship between your MPF and your severance pay by abolishing the offset mechanism.

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1. What Is MPF?

MPF stands for Mandatory Provident Fund (強制性公積金). It is Hong Kong's compulsory retirement savings scheme, established in December 2000 under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) and regulated by the Mandatory Provident Fund Schemes Authority (MPFA).

The design is straightforward: employer and employee each contribute a fixed percentage of the employee's relevant income into a trust account managed by an approved trustee (licensed banks, insurance companies, and similar institutions). The money is invested in approved funds and grows over time. It belongs to the employee — not the company, not the government.

Must join:

• Employees aged 18–64 working in Hong Kong
• Self-employed persons aged 18–64 working in Hong Kong

Exempt:

• Persons under 18 or aged 65 or above
• Certain expatriates covered by overseas retirement schemes working in Hong Kong for less than 13 months
• Casual workers in the construction and catering industries (covered by industry-specific schemes)
• Domestic helpers from overseas (covered by a separate scheme)

Employers must enrol a new employee in an MPF scheme within 60 days of the commencement of employment. Failure to enrol on time is a breach of the Ordinance, and the MPFA may prosecute the employer. If your employer has not arranged MPF enrolment after 60 days, you can contact or file a complaint with the MPFA.

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2. How Are Contributions Calculated?

• Employer: 5% of the employee's relevant income
• Employee: 5% of their own relevant income

Both sides contribute 5%, so a combined 10% flows into your MPF account each month.

"Relevant income" (相關入息) is the basis for calculating contributions. It includes salary, wages, leave pay, commissions, and bonuses, but excludes severance payments, payment in lieu of notice, and certain other items.

Examples:

• Monthly salary HK$20,000: Employee contributes HK$1,000, employer contributes HK$1,000 → HK$2,000/month into account
• Monthly salary HK$30,000: Both contribute HK$1,500 each → HK$3,000/month
• Monthly salary HK$50,000: Still HK$1,500 + HK$1,500 = HK$3,000 (capped; amounts above HK$30,000 are not counted)
• Monthly salary HK$6,000: Employee is exempt; employer must still contribute HK$300 (6,000 × 5%)

Contributions must be paid within 10 days after the end of each contribution period (usually a calendar month). Employers who miss the deadline face surcharges from the MPFA and may be prosecuted.

Self-employed persons contribute at the same rates and subject to the same income thresholds, but only pay one side (no separate "employer contribution"). They can choose to contribute monthly or quarterly. Contributions are typically due before the end of each contribution period.

Mandatory MPF contributions are tax-deductible up to HK$18,000 per tax year for salaries tax purposes. An employee contributing the maximum of HK$1,500 per month (HK$18,000/year) exactly exhausts this deduction cap — the design is intentional.

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3. Choosing Your MPF Funds

The money in your MPF account is not a bank deposit — it is invested in funds. Your choice of funds directly affects how much you accumulate by retirement. Every approved MPF scheme offers a range of fund options with varying risk and return profiles.

1. Conservative Fund

• Invests primarily in short-term deposits and Hong Kong government bonds
• Legally required to preserve capital — you will not lose your principal
• Returns are very low, usually slightly above fixed deposit rates
• Suitable for: people close to retirement or with very low risk tolerance
• Caution: over the long term, inflation may erode the real purchasing power of capital-preserved funds

2. Bond Funds

• Invest primarily in government bonds or corporate bonds
• Low to moderate risk; returns somewhat higher than the Conservative Fund
• Sensitive to interest rate movements (bond prices typically fall when rates rise)

3. Mixed Asset Funds

• Combine equities and bonds in varying proportions (e.g., 40% equities / 60% bonds)
• Moderate risk and return
• Often the most appropriate choice for employees with moderate risk tolerance

4. Equity Funds

• Invest primarily in stock markets (Hong Kong, US, Asian markets, etc.)
• Highest volatility; highest potential return, but also highest potential loss
• Best suited to younger employees with a long time horizon who can absorb short-term volatility
• Many schemes offer sub-categories: global equities, China equities, Asia-Pacific equities

5. Default Investment Strategy (DIS)

• Designed by MPFA for employees who do not actively choose their funds
• Comprises two funds:
• Core Accumulation Fund: 60% equities + 40% bonds; fee capped at 0.75%/year by regulation
• Age 65 Plus Fund: 20% equities + 80% bonds; lower risk; fee capped at 0.50%/year
• The system automatically shifts your allocation toward the Age 65 Plus Fund as you approach retirement ("de-risking")
• If you have never selected a fund, your contributions may already be in DIS by default
• DIS fees are regulated and transparent — an advantage for cost-conscious employees

• Under 30: Favour higher equity allocations. Time is your biggest asset; compounding works powerfully over decades.
• Ages 45–55: Begin shifting toward more conservative allocations to reduce volatility risk as retirement approaches.
• 55 and above: Seriously consider the Conservative Fund or the DIS Age 65 Plus Fund.
• Review your fund selection at least once a year; adjust for changes in your personal situation and market conditions.
• Fund expense ratios between trustees can differ by 1–2 percentage points annually — significant over decades. Use MPFA's fee comparison platform before choosing.

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4. Changing Jobs: What Happens to Your MPF?

Job changes are the most confusing part of MPF for most employees. Work several jobs over a career without managing your accounts, and you may find you have multiple dormant MPF accounts scattered across different schemes, paying management fees on each, with no clear picture of your retirement savings.

Under MPFA rules, employees in active employment have the right — once per 12-month period — to transfer the accrued benefits derived from their employer's mandatory contributions to a trustee of their own choice. This is called the Employee Choice Arrangement (ECA).

Key points:

• Only the employer's mandatory contribution portion accumulated in your account can be transferred under ECA; your own employee mandatory contributions do not qualify for this specific transfer
• You may only exercise this right once per 12-month period
• After the transfer, future employer mandatory contributions continue to go into the original employer-designated scheme until you exercise ECA again in the next period

ECA allows you to consolidate and manage part of your MPF even while you are still employed — you do not have to wait until you leave a job.

From your last working day:

1. Your employer must settle all outstanding MPF contributions up to and including your final day (contributions are calculated on a pro-rated basis for the final month)
2. Your accumulated balance — including the employer's contribution portion — does not disappear; it remains in trust with the scheme trustee
3. You have two primary options:

Option A: Transfer to your new employer's MPF scheme

• After joining the new company, inform your new employer that you want your old account balance transferred into their scheme
• The new scheme's trustee handles the transfer paperwork
• Advantage: consolidates everything in one place; easier to track and manage

Option B: Transfer to a Personal Account (preserved account)

• Move your balance into a personal account in your own name
• A personal account cannot receive new mandatory contributions, but the existing balance continues to be invested and grow
• Advantage: independent of any employer's scheme; you can choose your preferred trustee and funds
• Future mandatory contributions from new employment will open a separate account under the new employer's scheme

Important:

• Handle the transfer within 3 months of leaving your job
• If you take no action, most trustees automatically retain your account as a "former employee account" under the original scheme — management fees continue to accrue
• Accounts left unattended for years risk being forgotten

MPFA launched the eMPF platform (emPF.mpfa.org.hk) in 2023. It allows you to:

• View all your MPF accounts in one place, across all trustees
• Consolidate multiple accounts online into a single personal account
• Check balances, contribution histories, and investment performance
• Update your investment instructions
• Complete everything online without contacting trustees individually

If you have worked multiple jobs and have accounts scattered across schemes, using eMPF to consolidate is strongly recommended. Many people discover their total MPF balance is considerably higher than expected once they pull everything together.

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5. When Can You Withdraw Your MPF?

MPF is designed for retirement savings, not a general savings account. In most circumstances, you must wait until age 65 to access your accrued benefits. The following are the permitted withdrawal conditions:

Upon reaching age 65, you may withdraw all MPF accrued benefits, either in a lump sum or in instalments. Withdrawals are not subject to salaries tax — a significant tax advantage for retirement planning.

If you are aged 60 but under 65, you may apply for early retirement withdrawal, provided you permanently cease employment and self-employment and make a statutory declaration to that effect. If you subsequently re-enter employment, the MPFA may seek recovery.

If you have permanently departed Hong Kong and do not intend to return, you may withdraw all accrued benefits. You must provide supporting documents (e.g., immigration approval for overseas residency, a statutory declaration) demonstrating your permanent departure.

Permanent physical or mental incapacity that prevents you from working allows early withdrawal. Medical certification from a registered medical practitioner is required.

A certified life expectancy of less than 12 months allows full early withdrawal, subject to medical certification.

Both conditions must be met simultaneously:

• Total balance across all accounts is less than HK$5,000
• No contributions have been made in the preceding 12 months (neither employer nor employee contributions)

If both conditions are satisfied, you may withdraw the entire balance in one payment.

Early withdrawal outside these approved conditions is a criminal offence. There are illegal services in Hong Kong that claim to help people "cash out" MPF early — do not engage with them. These schemes typically require you to make a false statutory declaration (e.g., falsely claiming permanent departure). If you are discovered, you not only lose access to the funds but face criminal liability. Report such services to the MPFA hotline (2918 0102). Unemployment alone does not qualify as grounds for withdrawal — this is one of the most common misconceptions about MPF.

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6. The January 2026 Offset Abolition: A Landmark Change for Workers

This is the most significant reform to Hong Kong's labour policy in recent years. Every employee should understand it.

The Employment (Amendment) Ordinance 2025 came into force on 18 January 2026, formally abolishing the MPF offset mechanism from that date. This reform had been debated for decades before finally being enacted and implemented.

Before 18 January 2026, Hong Kong law permitted employers to use their MPF mandatory employer contributions to offset — reduce — their obligation to pay severance payment or long service payment.

Example under the old system: An employee is made redundant and is legally entitled to HK$100,000 in severance payment. Under the old rules, the employer could apply the accumulated MPF employer mandatory contribution balance — say HK$30,000 — to directly offset that severance obligation. The employee would receive only HK$70,000 in severance, while the HK$30,000 in employer MPF contributions would be clawed back from the trust account to the employer.

In effect, the money you assumed was your retirement savings was being used to discharge part of your employer's separate legal termination obligation. Labour groups criticised this mechanism for decades as fundamentally unfair to workers.

From 18 January 2026 (the "transition date"), the offset mechanism is abolished. The practical effects are significant:

• If you are made redundant after the transition date: severance payment or long service payment must be calculated independently under the statutory formula, with no deduction from MPF mandatory employer contributions accumulated after the transition date
• Your entire MPF account — including all employer mandatory contributions accumulated from the transition date onward — remains yours as retirement savings, untouched by any redundancy or long service claim
• Employees now have genuine dual protection: a complete MPF accumulation and full statutory severance or long service payment (calculated on post-transition employment) — neither encroaches on the other

The statutory cap for severance payment and long service payment is HK$390,000 in total. The calculation formula is: 2/3 × last month's wages (or average of last 12 months, whichever is lower) × years of service, subject to a per-year cap of HK$22,500.

MPF mandatory employer contributions accumulated before 18 January 2026 (i.e., relating to pre-transition employment) may still be subject to offset calculations under the old rules when computing severance or long service payment entitlements for the pre-transition period of service. Only employer contributions accumulated from 18 January 2026 onward are completely free from any offset.

Practical example: if you joined a company in 2022 and are made redundant in 2027 —

• Employer MPF mandatory contributions from 2022 through 17 January 2026 may still be involved in an old-rules offset calculation for that pre-transition period
• Employer contributions from 18 January 2026 onward are fully protected from any offset

The transitional details are complex. For your specific situation, consult the Labour Department (2717 1771) or a licensed employment law adviser.

The abolition is a materially positive change for workers. If your employer carries out redundancies after 18 January 2026 and attempts to offset post-transition severance or long service pay using MPF mandatory employer contributions, that is unlawful. You can file a complaint with the Labour Department.

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7. Voluntary Contributions: Saving More Than the Minimum

Beyond the mandatory 5%, both you and your employer can make voluntary contributions — additional amounts above the statutory floor.

• Some employers offer enhanced voluntary contributions as a retention benefit (e.g., "employer contributes 5% mandatory + 2% voluntary"). This is worth asking about when evaluating an offer — it adds genuine long-term value beyond the headline salary.
• Voluntary contributions are invested in the same funds and compound over time alongside mandatory contributions
• Employee voluntary contributions do not qualify for the HK$18,000 mandatory contribution tax deduction
• Withdrawal rules for voluntary contributions vary by scheme — some can be withdrawn upon leaving employment; others have vesting or lock-up periods

MPFA also administers a separate Tax-Deductible Voluntary Contributions (TVC) scheme. These contributions attract an additional salaries tax deduction of up to HK$60,000 per tax year (combined with other qualifying retirement scheme contributions), entirely separate from the HK$18,000 mandatory contribution deduction. TVC accounts allow you to freely choose your scheme and trustee independently. For employees who have room in their tax threshold and want to build retirement savings more aggressively, TVC is a useful tool.

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9. Conclusion

MPF is not complicated once you understand the framework. It is your retirement money — built month by month, held in trust completely separate from your employer's assets, and now (since 18 January 2026) fully protected from being used to offset your severance pay for post-transition employment. Manage it actively: consolidate accounts when you change jobs, review your fund selection periodically, and know your withdrawal rights.

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Sources & Official Resources

• MPFA (Mandatory Provident Fund Schemes Authority) — Official Website: https://www.mpfa.org.hk/ (https://www.mpfa.org.hk/)

— Contribution calculator, approved trustee list, complaint channels, fund fee comparison platform

• eMPF Platform: https://www.empf.org.hk/ (https://www.empf.org.hk/)

— View and consolidate all your MPF accounts online

• Inland Revenue Department (IRD) — MPF Tax Deductions: https://www.ird.gov.hk/eng/faq/mpf.htm (https://www.ird.gov.hk/eng/faq/mpf.htm)

— Salaries tax deduction details for mandatory contributions and TVC (2025/26 caps: mandatory HK$18,000; TVC HK$60,000)

• Labour Department: https://www.labour.gov.hk/eng/ (https://www.labour.gov.hk/eng/)

— Severance and long service payment calculation, employer complaints, labour dispute mediation (hotline: 2717 1771)

• Employment (Amendment) Ordinance 2025 — MPF Offset Abolition: https://www.mpfa.org.hk/ (https://www.mpfa.org.hk/)

— Transition arrangements for the offset abolition; effective date: 18 January 2026