The following are some frequently asked questions that we often encounter:

How does Talenox handle new employees during the First Contribution period (60 days)?
Does your system automatically handle MPF contribution calculations for new employees?
Why are my new employee's MPF contribution amounts showing as HKD $0 when his gross salary exceed the minimum limit?

Definitions

Before we go into an example of how MPF contributions will be calculated in the system for a new employee, you'll need to understand the definitions of different contribution periods we are referring to throughout the article.

1) MPF Contribution Holiday (First 30 Days and More)

Employees

Based on MPFA website, employees are not required to make MPF contributions for their first 30 days of employment; and

any incomplete payroll period that immediately follows the 30-day period (if the employee’s wage period is monthly or shorter than monthly); or
the calendar month in which the 30th day of employment falls (if the employee’s wage period is longer than monthly)

This period is when the employee is considered to be enjoying their MPF Contribution Holiday (employee).

Employers

The calculation of an employer’s contribution for an employee should begin from the first day of the employee’s employment.

2) When is MPF First Contribution for a New Employee?

For new employees, employers must make their first-time contributions to trustees on or before the next contribution day (the 10th day of each month) after the calendar month in which the 60th day of employment falls.

You can find examples of a first contribution period from MPFA website as well.

Examples of MPF Contribution Holiday & MPF First-Time Contribution for New Employees

In this article, we will be going through a special case with a detailed explanation on why the February 2021 MPF contribution is paid together with the March 2021 MPF contributions.

Assuming a new employee joins a company on 2 January 2021, he/she will only be contributing MPF in March 2021, instead of February 2021. Here's how:

2 January - 1 February 2021: No MPF (employee) contribution for a 30-day period (MPF contribution holiday). MPF (employer) is calculated. No MPF contributions are contributed as it is still within the MPF First Contribution period

1 Feb - 28 Feb 2021: Employee no longer enjoying Contribution Holiday. MPF (employee) and MPF (employer) are calculated. No MPF contributions are contributed as it is still within the MPF First Contribution period

1 Mar - 30 Mar 2021: The new employee is still an active employee after the First Contribution period (60 days), the system will recognise this special situation and MPF contributions for both employee and employer for the past months will be summed up and contributed in March 2021 wage period.
- Total MPF Employee Contributions: HKD$3,000
  - January 2021 MPF (EE) contribution: HKD$0
  - February 2021 MPF (EE) contribution: HKD$1,500
  - March 2021 MPF (EE) contribution: HKD$1,500
- Total MPF Employer Contributions: HKD$4,500
  - January 2021 MPF (EE) contribution: HKD$1,500
  - February 2021 MPF (EE) contribution: HKD$1,500
  - March 2021 MPF (EE) contribution: HKD$1,500

The new employee will then be required to contribute MPF for both February 2021 and March 2021 (the total amount for both months) in the 3rd month of employment. 😁

How Will First Contribution Amounts be Displayed to New Employees during the First Contribution Period (First 60 Days)?

Payslips

Our payslips MPF contributions will exclude any MPF amounts when an employee is still under their First Contribution period.

The amounts will show $0 under the 'Statutory Funds' section in payslips until it has reached the First Contribution period (after 60 days) whereby the payslip will display an accumulation of the MPF amounts being contributed:

Values from previous months will be accumulated, labeled, and displayed under the relevant months
These accumulated amounts for the first contribution will be deducted from the Gross Salary of the employee during the First Contribution for MPF

Payroll Reports

The Payroll Report (on the 'Month Total' page) shows the following columns for MPF every month:

Mandatory MPF (Total MPF) - This will reflect the MPF that is calculated for the current month only, which will be HK$0 during the Contribution Holiday (first 60-day period)
Monthly MPF - This will contain MPF amounts that are deducted from Gross Salary for the current month (will include contribution holiday ER amounts).

If you need reminders of the definitions of these 2 columns, we also include this on the first page of the payroll report:

This will hopefully help you to distinguish between what is part of the Contribution Holiday and the total MPF amounts that are being deducted from Gross Salary for the month. :)

There you have it! You're a pro at MPF contribution calculations now.