Surcharges on mandatory contributions

According to regulations, employers should pay mandatory contributions in full to the trustee on or before the contribution day. For non-casual employees, no matter how often they get paid, whether on a weekly, monthly or quarterly basis, employers should fully pay the mandatory contributions and remit all necessary contribution information, including i) the relevant income of the employee in respect of the contribution period, ii) the contribution amount of both the employers and employees, and iii) the voluntary contribution amount of both the employers and employees (if any), by the contribution day, this is the 10th day of the month following the calendar month when the last day of the contribution period falls.

Since the trustee processes mandatory contributions of their employees according to contribution information provided by employers, therefore, while employers are making contribution payments, they should at the same time remit the relevant contribution information to the trustee by the deadline. HSBC MPF provides employers with a range of methods for remitting contribution information and making contribution payments. No matter which method they take, they should send the completed contribution information by cheque (if applicable) to the MPF Department through authorised channels on or before the contribution day. For more information on authorised channels and other important points to note, please check General Support.

• Payment methods
  Cheque (together with contribution details sent by post to designated mailing address or placed into the HSBC MPF Drop-In Box)
  Direct debit

• Ways to remit contribution details for employees
  Remittance statement in paper form
  Business Internet Banking (BIB) MPF services
  Other electronic means

As stated above, according to regulations, employers should pay mandatory contributions in full and send the relevant contribution information to the trustee on or before the contribution day. Otherwise, trustees must report to the Mandatory Provident Fund Schemes Authority (MPFA) on the default mandatory contributions within 10 days after the contribution day. There are 4 circumstances under which trustees will report employers' default contributions to the MPFA:

1. Unpaid or underpayment, which applies to both the employer's portion and employee's portion
2. Late payment of the employer's and/or employee's portion of the mandatory contributions (contributions that reach the trustee after the deadline are regarded as late payments)
3. Incomplete information on the remittance statement, including missing information and/or incorrect information provided. Without a properly filled remittance statement, the trustee is unable to verify the correct amount of contributions to be paid respectively by employers and employees
4. Employers who fail to notify the trustee in writing of an employee's termination of employment. Employers must inform trustees about the details of employment cessation of every non-casual employee* and pay the final mandatory contributions before the deadline. For details on how to remit a non-casual employee's cessation of employment, please go to the 'Reporting termination of your employees' section. The deadline for remitting employment termination and paying contributions is the 10th day of a calendar month following the month when the employee's last day of employment falls

Employers who successfully pay the contributions will receive a 'Confirmation of MPF contribution' issued by HSBC MPF, while employers who submit contribution information via the BIB MPF Service will receive an electronic 'Fund purchase confirmation'. Under circumstances of default payments, either underpayment or unpaid payments, we will send the following mails to the employers by post, including 'Mandatory Contribution Reminder' for employers who have not paid the contributions, and 'Mandatory Contribution Discrepancy Bill' for employers who have a payment shortfall. These notices serve as a reminder of the outstanding contributions, and employers are required to settle them as soon as possible. Whether it is an unpaid, late payment or shortfall of payment, they are classified as default contributions. Trustees are obliged to report the cases to the MPFA in accordance to MPF legislations.

* We will not process the information of employment cessation written on the inappropriate areas or on blank papers.

The MPFA will issue a surcharge notice to relevant employers according to the default contribution details reported by the trustee. The surcharge is equal to 5% of the outstanding payment. Employers should check with the trustee directly to see if the default contribution records are correct or not, and if there are sufficient reasons to impose a surcharge.

• Pay the outstanding contributions and surcharge
  If employers do not object to the surcharge imposed, they should confirm with the trustee the amount of outstanding contributions and the administration procedures to remit the surcharge. Employers should pay the outstanding mandatory contributions with all surcharges to the trustee by the deadline stated in surcharge notices. In addition, employers should submit a separate remittance statement to the trustee, with the name of the affected employees, the amounts of default contributions and surcharge due to them provided. Trustees will process the outstanding contributions and surcharge for the relevant affected employees according to the information from remittance statements. If employers do not pay the outstanding contributions in due time, it may result in a financial penalty and imprisonment. For more details about offences and penalties, please visit the MPFA website at www.mpfa.org.hk.
• Filing an objection to surcharge
  If employer does not agree with the imposition of surcharge, and believe that there is no default contribution, which can be supported by, for example, a proven record of full payment by due date, and/or a record showing a completed remittance statement had been submitted with all information provided correctly. Under these circumstances, you can file an objection with the MPFA.
  
  Objections must be filed within 14 days from the date of the payment notice, and you have to return a completed 'Contribution Surcharge Objection Form' and the relevant payment records to MPFA by this deadline. 'Contribution Surcharge Objection Form' can be downloaded from 'Filing an objection to contribution surcharge' section under the page of 'For Employer' on the MPFA website.
  
  The MPFA will pass the case to the trustee for investigation upon receipt of the objection. If the result concludes that there is no default contribution, the MPFA will withdraw the surcharge. Otherwise, objections will be rejected, and employers must pay the surcharge immediately.

• Avoid administrative errors
  Employers should avoid administrative errors that lead to surcharges when managing mandatory contribution payments. There are some points to be aware of regarding different ways of payment, to ensure payments can reach the trustee successfully before the deadline: