Pensions for Expats in Hong Kong

Submitted: August 2013

The Hong Kong pension system is dualistic, although it is viewed as a “three-pillar system” in Hong Kong public policy.

Hong Kong has a tax-efficient contribution-based private system, which is supplemented by means-tested old-age benefits paid by the Government. However, the private system is divided into two pillars: mandatory and voluntary contributions.

Because of the mandatory contributions pillar, the Hong Kong pension system is in effect primarily contribution-based. There is no contribution-based state pension in Hong Kong.


Mandatory Provident Fund Schemes (MPF)

Under the Mandatory Provident Fund Schemes Ordinance, Hong Kong employment is subject to mandatory contributions to an MPF scheme by both the employer and the employee. Self-employed individuals are also required to contribute to an MPF scheme.

Overseas employment is also covered to the extent that there is sufficient connection between the employee and Hong Kong. There are a few exceptions for:

Expatriates are exempt persons if:

MPF contributions rates are as follows:

Monthly relevant income (HKD)

Employer contribution

Employee/self-employed contribution

0 – 6,500



6,500 – 25,000



25,000 and above



The minimum relevant income will rise to HKD7,100 for contribution periods beginning 1 November 2013 or later. The maximum relevant income will rise to HKD30,000 for contribution periods beginning 1 June 2014 or later. Accordingly, the corresponding contributions will rise from HKD1,250 to HKD1,500.

Employee contributions to an MPF scheme may be deducted from your taxable income up to HKD15,000 per year. You may choose to make voluntary contributions by written notice to your employer. Employer contributions are not taxable in the hands of the employee. Pension payouts are normally not taxable, but there are many exceptions.

Remember that tax relief is limited to the tax rate that you potentially face. In Hong Kong, salaries tax rates generally do not exceed 15%.

MPF benefits can only be drawn if:

Superannuation practical tips

First and foremost, you should view MPF schemes as complex financial products on which you are charged fees to get the superannuation industry running. These fees may vary greatly from one superannuation product to another.

From a practical point of view, you should:

Expatriates and unclaimed superannuation

If you have worked in Hong Kong, you should check with your Hong Kong employer how much MPF contributions you have accrued whilst you worked in Hong Kong. Failure to do so is like leaving money on a dormant bank account in your name.

Employer contributions to superannuation funds are on top of your wage, but part of your earned income. It might be tempting for expatriates to just take their paycheques, but that means missing out on MPF contributions and failing to claim money of their own.


Social Security Assistance (SSA)

As the Hong Kong system makes you save for retirement, benefits for the elderly are primarily contribution-based. However, low-income individuals above pension age may be eligible for certain taxpayer-funded benefits.

Hong Kong is a low tax, low spend country. As in many Asian countries, welfare is expected to be delivered through family solidarity. However, Hong Kong is gradually strengthening its social assistance system, as Hong Kong’s ageing population (life expectancy over 82) is posing new challenges.

Under SSA schemes, the Government tops up your pension if your income and your assets do not exceed a specified amount. If you have worked in a foreign country, you are expected to claim your foreign pensions first. They would then be taken into account for the SSA income test.

Old Age Living Allowance

To qualify for OALA, you must:

From 1 February 2013, the means-testing requirements are as follows for OALA purposes:


Monthly Income limit (HKD)

Assets limit (HKD)

Single person



Married couple



The maximum payment you can get under OALA is HKD2,200 per month (from 1 April 2013), unless you are eligible for a supplement.

Old Age Allowance

Old Age Allowance (OAA) is not means-tested. However, it is much less generous, and you qualify only when you reach 70.

The maximum payment you can get under OAA is HKD1,135 per month (from 1 February 2013), unless you are eligible for a supplement.


International matters

Expatriates and SSA schemes

Expatriates are unlikely to qualify for SSA benefits unless they intend to reside in Hong Kong for at least seven years.

International superannuation planning

MPF schemes are tax-efficient products in Hong Kong. Thus, they are heavily regulated in order to avoid any undue tax base erosion. The same fundamental principle is likely to apply to foreign equivalents. Thus, you should check:

Foreign-source income is not taxable in Hong Kong, and your home country may have a tax treaty with Hong Kong to avoid double taxation.

Retaining your foreign pension arrangements may be the most practical option if you don’t intend to stay in Hong Kong. However, your mandatory contributions in respect of Hong Kong employment must be made to a registered MPF scheme, although you can withdraw your funds when you are no longer resident in Hong Kong. Additionally, you cannot get tax relief in Hong Kong unless you contribute to a registered MPF scheme.

Cross-border superannuation planning is always on a case-by-case basis. It is strongly recommended to use specialist advice regarding this matter.



» Money Transfers for Expats in Hong Kong
» Foreign Exchange for Expats in Hong Kong
» Banking for Expats in Hong Kong
» Pensions for Expats in Hong Kong
» Investment for Expats in Hong Kong
» Wealth Management for Expats in Hong Kong
» Property Investment for Expats in Hong Kong
» Insurance for Expats in Hong Kong



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