Are MPF contributions tax deductible in Hong Kong?
Yes, within limits. An employer can deduct contributions up to 15% of each employee's total emoluments. An employee's mandatory contributions are deductible against salaries tax up to HK$18,000 a year (2025/26), and the self-employed can deduct up to HK$18,000. Tax-deductible voluntary contributions have a combined HK$60,000 cap.
Employer (profits tax). The employer's annual contributions to a recognised retirement scheme or regular MPF contributions are deductible, limited to 15% of the employee's total emoluments for the period.
Employee (salaries tax). Mandatory contributions paid by an employee are deductible up to HK$18,000 for 2025/26. The cap is the same for each individual regardless of the number of jobs, MPF schemes or businesses, so contributions above it are not deductible.
Self-employed (sole proprietor or partner). Mandatory contributions paid as a self-employed person are deductible, up to HK$18,000 a year (2019/20 onwards). Contributions for a spouse are not deductible, and the business cannot deduct other pay or contributions for the owner.
Voluntary contributions. Only contributions to a tax-deductible voluntary contribution (TVC) account qualify, together with qualifying deferred annuity premiums, up to a combined HK$60,000 a year (2019/20 onwards). Other voluntary MPF contributions are not deductible.
Practical points
- The deduction reduces taxable income, so it saves tax at your marginal rate.
- Keep MPF statements as evidence.
- MPF is administered by the MPF Authority; the contribution obligations themselves are not covered here.
The 2026-27 Budget did not change these deduction limits.
Legal basis
- Inland Revenue Ordinance (Cap. 112), s.16
- Inland Revenue Ordinance (Cap. 112), s.16AA
Sources
Applies to YA 2025/26 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- How does provisional profits tax work in Hong Kong?Provisional profits tax is an advance payment charged for a year of assessment, calculated from the previous year's assessed profits. It is then offset against the final tax for that year, with any excess applied to the next year's provisional tax or refunded. It is paid in instalments set out on the demand note.
- How can I hold over (reduce) my provisional profits tax?You can apply in writing to pay less or none of your provisional profits tax on prescribed grounds, most commonly if profits for the year are likely to be below 90% of the base figure. Apply at least 28 days before the due date or within 14 days after the demand note is issued, whichever is later.
- What tax reduction did the 2026-27 Budget give to Hong Kong businesses?The 2026-27 Budget provides a one-off 100% reduction of profits tax for year of assessment 2025/26, capped at HK$3,000 per business. It applies to the final tax, not to provisional tax, and needs no application. Profits tax rates were not changed. The legislation was passed on 13 May 2026 and gazetted on 22 May 2026.
- Which business expenses are deductible for Hong Kong profits tax?Expenses are deductible to the extent they are incurred in producing chargeable profits, and are not of a capital nature or private. Typical allowable items include rent of business premises, staff costs, bad debts, repairs, trade mark registration, MPF contributions for employees, and approved charitable donations within limits.
- What expenses cannot be deducted for Hong Kong profits tax?The law prohibits deductions for domestic or private expenses, capital losses and expenditure, insurance recoveries, rent of premises not used for the business, profits tax and other IRO taxes, and remuneration or interest paid to a sole proprietor or partners and their spouses.