Digital Assets & Virtual Assets
CARF in Hong Kong: What the Crypto-Asset Reporting Framework Means from 2027
The Mandatory Provident Fund system applies to almost every employer in Hong Kong. If you employ staff, full-time or part-time, obligations under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) attach from the moment they start. The MPFA enforces actively, and default carries surcharges, financial penalties and criminal liability.
Two things have changed recently enough that older guidance is now misleading: MPF offsetting was abolished on 1 May 2025, and the eMPF Platform completed its rollout in May 2026, so contributions and offsetting applications no longer go directly to trustees. This guide covers both, with the current figures.
Who must be enrolled
You must enrol employees aged 18 to 64 who are employed for a continuous period of 60 days or more, in a registered MPF scheme, within the first 60 days of employment. This applies to part-time as well as full-time staff.
The 60-day rule does not apply to casual employees in the construction and catering industries, who must be enrolled under an Industry Scheme regardless of how long the employment lasts.
The main exemptions are employees under 18 or aged 65 and above; employees engaged for less than 60 days (other than the casual employees just mentioned); certain expatriates entering Hong Kong to work for a limited period, generally not more than 13 months, or who are members of an overseas retirement scheme; and domestic employees, self-employed hawkers and other categories set out in the Ordinance.
The numbers
| Item | Amount |
| Contribution rate | 5% employer and 5% employee |
| Minimum relevant income (monthly) | HK$7,100 |
| Minimum relevant income (weekly / daily) | HK$1,960 / HK$280 |
| Maximum relevant income (monthly) | HK$30,000 |
| Maximum relevant income (weekly / daily) | HK$7,000 / HK$1,000 |
| Maximum mandatory contribution per month | HK$1,500 each from employer and employee |
Where an employee's monthly relevant income falls below HK$7,100, the employee makes no mandatory contribution but the employer must still contribute 5%. This is the single most common error in small-employer payrolls.
Mandatory contributions are fully and immediately vested in the employee.
Expect these levels to change. The minimum has been HK$7,100 since November 2013 and the maximum HK$30,000 since June 2014. The MPFA has been conducting its statutory review, has consulted more than thirty organisations, and said in March 2026 that it planned to put recommendations to the Government by mid-2026, noting that the levels need to reflect price and wage growth over the past decade. No revised figures had been announced as at the date of this article. If you are budgeting into 2027, build in headroom.
Timing
- Enrolment: within the first 60 days of employment.
- Contribution day: the 10th day of each month for monthly-paid employees.
- First contribution for a new hire: on or before the contribution day following the calendar month in which the 60th day of employment falls.
- Contribution holiday: the employee makes no contribution for the first 30 days of employment. Employer contributions are payable from day one.
- Pay-record: a monthly remittance statement must be given to each employee within 7 working days after contributions are made, showing relevant income, contribution amounts and the contribution period.
The abolition of offsetting: how it actually works
The transition date was 1 May 2025. The rule operates by reference to the employee's years of service relative to that date, not by reference to when the contributions were made, which is where most summaries go wrong.
Service on or after 1 May 2025. Employers can no longer use accrued benefits derived from mandatory contributions to offset severance payments or long service payments. Benefits derived from voluntary employer contributions can still be used to offset, for service before or after the transition date.
Service before 1 May 2025. Fully preserved. For an employee who started before the transition date and leaves on or after it, the employer may offset severance or long service payment for the pre-transition years using accrued benefits derived from all employer contributions, mandatory or voluntary, whenever those contributions were made.
Employees who left before 1 May 2025. The old regime applies in full.
The mechanics now run through eMPF. If the employer has paid the severance or long service payment, the employer applies to eMPF with supporting documents to withdraw the employer-contribution-derived benefits. If the employer has not paid, the employee applies to eMPF directly, and where the accrued benefits are insufficient to cover the offsettable amount the employee recovers the shortfall from the employer.
A 25-year government subsidy scheme shares employers' severance and long service payment costs for employment on or after 1 May 2025. It is administered by the Labour Department, not the MPFA, through its TransitionEase Portal, and applications must be made within three months of paying the severance or long service payment. That deadline is easy to miss in the aftermath of a termination.
The eMPF Platform
Full onboarding completed on 3 May 2026. All twelve MPF trustees, roughly five million scheme members, 300,000 employers and eleven million accounts now sit on the platform, covering more than HK$1.5 trillion in assets.
The practical consequence for employers is that contributions and offsetting applications are made through eMPF rather than directly to trustees. Any internal process or payroll instruction still written around dealing with a trustee describes a system that no longer operates.
Penalties
| Default | Consequence |
| Late or unpaid contributions | Surcharge of 5% of the outstanding amount, paid into the employee's account |
| Late or non-payment (financial penalty) | HK$5,000 or 10% of the amount due, whichever is greater |
| Failure to enrol employees | Maximum fine HK$350,000 and 3 years' imprisonment |
| Failure to pay contributions where the employee's 5% was deducted | Maximum fine HK$450,000 and 4 years' imprisonment |
| Failure to pay contributions where no deduction was taken | Maximum fine HK$350,000 and 3 years' imprisonment |
| No monthly pay-record | HK$10,000 / HK$20,000 / HK$50,000 for first, second and subsequent offences |
| Failure to notify cessation of employment | HK$5,000 / HK$10,000 / HK$20,000 |
| Failure to update employer information | HK$5,000 / HK$10,000 / HK$20,000 |
Note the distinction in the second and third rows. Deducting the employee's contribution and then not paying it over is treated more seriously than simply failing to pay, and carries the heavier maximum.
Where employers go wrong
- Not enrolling part-time or short-term staff who cross the 60-day threshold.
- Treating a below-minimum-income employee as generating no obligation at all, when the employer's 5% is still due.
- Miscalculating relevant income by omitting allowances, commissions or bonuses that form part of it.
- Missing the 10th of the month and accruing surcharges on small amounts repeatedly.
- Not issuing the monthly pay-record, which is a standalone offence with escalating penalties.
- Assuming expatriate staff are exempt without checking the conditions, particularly the 13-month limit.
- Paying severance or long service payment and then missing the three-month window to apply for the government subsidy.
How we can help
Alan Wong LLP advises Hong Kong employers on MPF compliance, employment structuring, and the effect of the abolition of offsetting on severance and long service payment exposure. That last point is worth modelling now rather than at the point of a redundancy: for employers with long-serving staff, the change materially alters the cost of termination. We also assist employers dealing with MPFA enforcement. To discuss your obligations, please get in touch.
This article is general information current as at August 2026. The relevant income levels are under review and the figures above should be confirmed with the MPFA before you rely on them. It is not legal advice.
