How do I account for payroll and MPF contributions in Hong Kong?

Rates (MPFA). For regular employees, the employer and the employee each pay 5% of relevant income, within a band. Monthly-paid staff: no employee contribution below HK$7,100 (the employer still pays 5%), and a cap of HK$1,500 each on income above HK$30,000. For example, on HK$20,000 monthly pay each side pays HK$1,000; on HK$50,000 each pays HK$1,500.

Journal entries each payroll

• Debit salary expense (gross pay) and MPF employer expense.
• Credit net salary payable (or bank), MPF payable (employee plus employer portions) and any other deductions.
• When you pay the trustee, debit MPF payable and credit bank.

Other points

• Employees need not contribute for their first 30 days of employment, but the employer must contribute from day one.
• The tax tie-in: employers report pay in the annual employer's return (IR56B), filed within one month of the IRD's April issue.

Keep payroll registers, payslips and MPF records with the books for seven years. The contribution deadline is covered in the answer on when MPF contributions must be paid, and the levels in the answer on minimum and maximum relevant income for MPF.