Regulation and penalties for defaulting on MPF contributions

Under the Mandatory Provident Fund Schemes Ordinance, employers in Hong Kong are required to make monthly MPF contributions for eligible employees. Both employers and employees must each contribute 5% of the employee’s relevant income. Contributions for monthly‑paid employees must be remitted to the trustee on or before the 10th day of the following month.

Late payment will result in a surcharge and may lead to further penalties. Ensuring contributions are made on time is therefore a statutory duty of all employers.

5% Surcharge for late or missed contributions

When an employer fails to make the required contributions, the MPFA will first ask the employer to rectify the non-compliance immediately. It will then impose a 5% surcharge on the outstanding contributions, based on reports submitted by MPF trustees.

Common reasons for defaulting on contributions include:

1. The trustee did not receive the contributions, or the amount received was insufficient;
2. The contributions were paid late — the amount was correct, but the trustee received it after the statutory deadline;
3. The remittance statement submitted by the employer was incomplete or inaccurate, preventing the trustee from verifying the contribution amount;
4. The employer failed to inform the trustee that an employee had left employment.

Once the trustee receives the outstanding contributions and the surcharge, the full amount will be allocated to the affected employees’ MPF accounts in accordance with the employer’s remittance statement.

Although a large number of surcharge notices are issued each year, most employers settle the arrears promptly. According to the MPFA’s latest enforcement statistics, approximately 400,000 surcharge notices were issued between 2024 and 2025. However, only 1,728 cases proceeded to civil claims, and only 323 cases resulted in summonses, indicating that most employers rectify the issue once notified.

Civil claims and additional penalties

If an employer still fails to settle the outstanding contributions, the MPFA may impose further penalties and initiate legal action to recover the arrears and surcharge on behalf of affected employees. These escalation measures include filing civil claims and imposing additional fines on non‑compliant employers.

The level of fines varies depending on the type of non‑compliance. For example:

1. Failure to remit mandatory contributions on time: a fine of HK$5,000 or 10% of the amount in arrears (whichever is higher).
2. Failure to provide monthly contribution records to employees: HK$10,000 for the first offence, HK$20,000 for the second, and HK$50,000 for each subsequent offence.

Criminal prosecution — Maximum penalty of four years’ imprisonment

If an employer repeatedly fails to rectify the breach, or if the circumstances are serious, the MPFA may invoke the MPF Ordinance to pursue criminal prosecution against the employer or related individuals, such as directors, senior management, or business partners.

For instance, failing to remit the employee’s 5% mandatory contribution after deducting it from wages may result in a maximum penalty of a HK$450,000 fine and imprisonment for four years.

Most cases are ultimately resolved by fines, but there have been instances of imprisonment. According to MPFA records, in 2017 a company director was sentenced to 21 days’ immediate imprisonment for failing to comply with a court order to settle outstanding MPF contributions and surcharge.

Government plans to introduce a two-tier surcharge system

In the latest Budget, the Government accepted the MPFA’s proposal to improve the process for recovering default MPF contributions. The plan includes introducing a two-tier surcharge mechanism to encourage employers to settle arrears and related charges more promptly.

Under the proposal, if the outstanding contributions and the initial surcharge are not settled within a specified timeframe, the surcharge rate and amount will increase. This two-tier arrangement is expected to encourage earlier repayment, reduce the need for legal proceedings, and help employees recover their rightful MPF benefits sooner.