MPF vs CPF? Differences between Statutory Requirement on Employment Cost in HK and SG

Statutory requirements, especially on employment costs, are a few of the challenges owners face when starting cross-border expansion. Although Hong Kong and Singapore have similar business environments, the mandatory funds in the two places are very different.

Below, we will introduce the differences between MPF (Mandatory Provident Fund) in Hong Kong and CPF (Central Provident Fund) in Singapore.

MPF (Mandatory Provident Fund)

What is MPF? 

MPF is a retirement investment plan. To ensure most Hong Kongers will have money for the future, especially after their retirements, this investment plan is made compulsory.

Who needs to contribute to MPF?

  • between the age of 18-65
  • with a salary over HKD7,100/month, no matter employed as a full-time or part-time
  • who is employed for at least 60 days

Who is exempted?

  • domestic employees
  • self-employed hawkers
  • people approved and covered by statutory pensions or provident fund schemes (e.g. civil servants, subsidized/ grant school teachers)
  • people with occupational retirement schemes and granted MPF exemption certificates
  • non-locals who entered Hong Kong for employment for less than 13 months, or who are covered by overseas retirement schemes
  • employees of the European Commission in Hong Kong
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Every month, both employers and employees are required to contribute 5% of the employees’ income to the employees’ MPF.

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The amount of salary contributed to MPF is capped at HKD1,500, while employers have to contribute 5% of the monthly income even when the employees’ monthly income is less than HKD7,100.

For example, if your monthly income is HKD20,000, you and your employer will have to both contribute HKD1,000 to your MPF.

CPF (Central Provident Fund)

What is CPF?

Just like the MPF in Hong Kong, CPF is a mandatory savings scheme for employees’ future, especially after retirement.

Who needs to contribute to CPF?

  • a Singaporean Citizen/ a Singapore PR employed in Singapore with a signed contract of service with employers
  • with a salary over SGD50/month, no matter employed as a full-time, part-time, or temporary
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Who is exempted?

  • employed as a master, seaman, or an apprentice in any shipping vessel (unless not exempted in the employment contract)
  • foreign employees holding an Employment Pass, S pass, Miscellaneous Work Pass, or Work Permit
  • Singaporean/Singaporean PRs who are sent overseas
  • Registered Partners of a Limited Liability Partnership (LLP) or Limited Partnership (LP) (unless engaged under an employment contract within the partnership)

CPF Calculation

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Every month, both employers and employees are required to contribute to the employees’ CPF.

To calculate the amount of CPF contribution, just simply refer to the above table for the contribution rate that you have to pay according to the age group that you fall into, and multiply the percentage with the employees’ wage. The amount of CPF contribution is capped at SGD6,000.

For example, if you are below 50 years old and your monthly income is SGD6,000, you will have to contribute SGD1,200 while your employer will have to contribute SGD1,020 to your CPF.

Now, you may think people in Singapore have to contribute more to their saving funds than people in Hong Kong. However, the salaries in Singapore are lesser, comparing to Hong Kong in general. Moreover, the employers’ contribution to CPF can be used to deduct their corporate tax. Follow us and we will tell you more about it.



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