Before 2000, only a small percentage of Hong Kong’s population had sufficient retirement funds. Therefore, the government established the so-called Mandatory Provident Fund System (MPF), as a retirement plan designed to ensure old-age pensions beyond basic welfare benefits. Considering Hong Kong’s aging population and long life expectancy, this was a major step.
MPFs are mandatory, fully funded and privately managed contribution schemes. You and your employer both have to contribute 5% of your monthly income, but at maximum HKD 1,250 each, to an MPF scheme of your choice. You will have to contribute to an MPF scheme even if you have your own business in Hong Kong. There are three different types of MPFs:
Master trust schemes are the most common ones. Employer-sponsored schemes exclusively apply to employees of one specific company, and industry schemes focus on workers in sectors like catering and construction.
However, expats who are going to work in Hong Kong for a maximum duration of 13 months or who are covered by an overseas retirement scheme are exempt from contributing to any MPF scheme. Also, if you are going to leave Hong Kong permanently, you can withdraw all your accrued benefits from your MPF account.
Since you are probably not planning to retire in Hong Kong, you should talk to both your social security office back home and your financial services provider. They can advise you how to contribute to your usual retirement provisions while you are working in Hong Kong. For further information on the MPF system, read our introduction to Hong Kong insurance or contact the Mandatory Provident Fund Schemes Authority.
You may also have been wondering why we haven’t mentioned healthcare among Hong Kong’s welfare services. Fact is that you can use all public health services for a small(ish) fee as long as you have a Hong Kong ID card.
However, there are often long queues and waiting lists in the public facilities. Moreover, not all medical staff in public clinics speaks fluent English, so expats often opt for private healthcare. Read more in our guide to Hong Kong health insurance.
Working conditions in Hong Kong are subject to the so-called Employment Ordinance. It was established in 1968 as the main part of Hong Kong’s labor legislation, regulating the benefits and protection of employees. Under the Employment Ordinance, companies and employers are required to provide their employees with comprehensive services and benefits. Talk to your employer to find out which advantages you specifically enjoy. Generally speaking, company benefits should include the following:
Consequently, if you run a business, you will have to provide your employees with these benefits. The Employment Ordinance covers all of your employees, no matter if they are full-time or part-time workers. Contact the Labor Department to learn more about your or your employees’ rights to labor protection and benefits.
As mentioned above, there is a recent minimum wage law that went into force in May 2011. However, most expats will hardly expect to go abroad in order to work for minimum wages.
Up-to-date salaries for highly qualified employees and executives in big industries are usually summarized in annual surveys by local media or huge recruitment agencies. For example, you can have a look at various salaries in Hong Kong in the Morgan McKinley Salary Survey Reports 2014 or compare salaries with CTgoodjobs’ SalarayCheck-Tool. When negotiating your salary for Hong Kong, always take into account that the cost of living in Hong Kong is rather high as well.
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