Hong Kong MPF & IR56 Compliance

Executive Summary

Navigating Hong Kong's payroll landscape requires strict adherence to the Mandatory Provident Fund (MPF) schemes and precise annual tax reporting (IR56B). As Deel expanded its operations, establishing a robust, compliant workflow was critical. I led the implementation of end-to-end processes that ensured accurate employer contributions, timely employee deductions, and seamless annual tax reporting for all Hong Kong-based entities.

The Challenge

The implementation faced several regulatory hurdles:

• Complex Calculations: Managing the 5% mandatory contribution rules with specific income caps and floor limits.
• Strict Deadlines: Ensuring monthly contributions were remitted to MPF trustees on time to avoid fines.
• Annual Reporting: Generating accurate IR56B forms for every employee at the end of the tax year.

The Solution

I designed a comprehensive compliance framework tailored to Hong Kong regulations:

1. Automated Calculation Engine: Configured the payroll engine to automatically calculate MPF caps and mandatory contributions based on relevant income definitions.
2. Workflow Integration: Established clear internal timelines and validation checks for monthly remittance to MPF providers.
3. Digital Reporting: Implemented a system to generate digital IR56B forms, simplifying the annual tax filing process for both the employer and employees.