Help in understanding few clauses in offer letter

[elixir.sg]

Hi friends,

I have these two clause in my offer letter, and I need help from seniors here on these 2 clauses -
1) Kids Education Fee
The company agrees to pay you a monthly fee for your kids education in HK. This is an unchangeable amount used as subsidy under the budget of HKD7,000.00, no matter how many kids you have now or in future.

Please help me understanding the above statement.
Does this mean that I will only get HKD 7000.00 if I produce the monthly tuition fees bill from school or does this mean that I will get paid HKD 7000.00 regardless of bills/ invoice? Let's say if I don't get school for my kid this year, and I opt for home-schooling for current year, company will not pay me HKD 7000.00 or let's say I don't move my kid in HK till mid-term admissions begin and supposedly he joins school after November then company will start paying HKD 7000.00 from then onwards only?


2) Relevant MPF and individual income tax is subject to your responsibility. Monthly salary will be paid to you by credit transfer directly into your bank account in Hong Kong. (During the first year in HK, MPF-Mandatory Provident Fund is allowed not to be
paid by both parties, but it's up to you).


Company is not required to pay any % of MPF in HK?
And I don't need to pay MPF during first year of my stay in HK?
How much % of salary is gone towards MPF per month?


Kindly help me with these two points as I have 48 hrs to confirm the offer.

Thanks all for your help so far.

[elixir.sg]

Originally Posted by elixir.sg

Hi friends,

I have these two clause in my offer letter, and I need help from seniors here on these 2 clauses -
1) Kids Education Fee
The company agrees to pay you a monthly fee for your kids education in HK. This is an unchangeable amount used as subsidy under the budget of HKD7,000.00, no matter how many kids you have now or in future.

Please help me understanding the above statement.
Does this mean that I will only get HKD 7000.00 if I produce the monthly tuition fees bill from school or does this mean that I will get paid HKD 7000.00 regardless of bills/ invoice? Let's say if I don't get school for my kid this year, and I opt for home-schooling for current year, company will not pay me HKD 7000.00 or let's say I don't move my kid in HK till mid-term admissions begin and supposedly he joins school after November then company will start paying HKD 7000.00 from then onwards only?


2) Relevant MPF and individual income tax is subject to your responsibility. Monthly salary will be paid to you by credit transfer directly into your bank account in Hong Kong. (During the first year in HK, MPF-Mandatory Provident Fund is allowed not to be
paid by both parties, but it's up to you).


Company is not required to pay any % of MPF in HK?
And I don't need to pay MPF during first year of my stay in HK?
How much % of salary is gone towards MPF per month?


Kindly help me with these two points as I have 48 hrs to confirm the offer.

Thanks all for your help so far.

Hoping if any body can help me with this query......

[hkexpat]

Re : MPF in HK

The MPF Schemes Ordinance (the “Ordinance”) covers employees aged 18 to aged below 65, except for certain exempt persons stipulated in the Ordinance. A category of exempt persons is overseas employees who need an employment visa in order to work in Hong Kong.

Section 4(3) of the MPFSO and section 203 of the Mandatory Provident Fund Schemes (General) Regulation provide that a person entering into Hong Kong when permission is given to the person to land or remain in Hong Kong for the purposes of employment under the conditions of stay imposed in accordance with Section 11 of the Immigration Ordinance and
1. the period during which the person is given permission to remain in Hong Kong does not exceed 13 months; or
2. the person is a member of a provident, pension, retirement or superannuation scheme of a place outside Hong Kong,

he is exempted from joining an MPF scheme.

Hence, the MPF exemption is only applicable to those persons who do not have the right of abode or the right of stay or who have not been granted unconditional stay in Hong Kong under the immigration regulations and whose visas are granted for employment purposes. The 13-month exemption period refers to “the period during which the person is given permission to remain in Hong Kong”. The commencement date of this period should be determined in accordance with the terms of the corresponding visa.

And the answering your other questions on MPF......
Company is not required to pay any % of MPF in HK?

- If employee is registered under MPF exemption (holds an existing Pesnion or state pension outside of HK) the Company is not subject to Mandatory MPF for both employer and employee. Should employee still want MPF it would be his own voluntary contributions only and nothing from company

- NB: If registered exempt now, please note cannot at any time in the future deregister – so employee will never be entitled to company Mandatory MPF in future

- If employee is not exempt but a foreigner – MPF contributions do not need to be made for first 12 months, however in month 13 MPF is mandatory for both employer & employee – NB in 13 month both must back pay for months 1-12 have to be made (so general advise to start straight away unless can afford full annual payment in one go.


And I don't need to pay MPF during first year of my stay in HK?

- If employee is not exempt but a foreigner – MPF contributions do not need to be made for first 12 months, however in month 13 MPF is mandatory for both employer & employee – NB in 13 month both must back pay for months 1-12 have to be made (so general advise to start straight away unless can afford full annual payment in one go.


How much % of salary is gone towards MPF per month?

- 5% from employer & 5% from employee into MPF

- Only 5% of salary deducted from salary – this is employee contribution

- Capped at HKD 1,250 each per month – so total combined capped at HKD 2,500 per month

- Basically employee 5% is free money to employee

[hkexpat]

Please help me understanding the above statement.
Does this mean that I will only get HKD 7000.00 if I produce the monthly tuition fees bill from school or does this mean that I will get paid HKD 7000.00 regardless of bills/ invoice? Let's say if I don't get school for my kid this year, and I opt for home-schooling for current year, company will not pay me HKD 7000.00 or let's say I don't move my kid in HK till mid-term admissions begin and supposedly he joins school after November then company will start paying HKD 7000.00 from then onwards only?


Yes its likely that the employer will only pay the HKD7k once they receive the invoice from the school.
You maybe able to negiotiate with employer to also cover home schooling, providing its via a company who sends a full-time tutor to teach your child. They could provide an invoice for this service.

[lorgnette]

You maybe able to negiotiate with employer to also cover home schooling, providing its via a company who sends a full-time tutor to teach your child. They could provide an invoice for this service.[/QUOTE]

Probably the tutor must be a registered tutor, with credentials and living in HK as well

You are right, if any part of the ed allowance is not applied towards schooling, or your child is not in school, then the company might not acknowledge your claims.

You might negotiate if the ed schooling applies to your professional cert upgrading instead.

[elixir.sg]

Originally Posted by hkexpat

Re : MPF in HK

The MPF Schemes Ordinance (the “Ordinance”) covers employees aged 18 to aged below 65, except for certain exempt persons stipulated in the Ordinance. A category of exempt persons is overseas employees who need an employment visa in order to work in Hong Kong.

Section 4(3) of the MPFSO and section 203 of the Mandatory Provident Fund Schemes (General) Regulation provide that a person entering into Hong Kong when permission is given to the person to land or remain in Hong Kong for the purposes of employment under the conditions of stay imposed in accordance with Section 11 of the Immigration Ordinance and
1. the period during which the person is given permission to remain in Hong Kong does not exceed 13 months; or
2. the person is a member of a provident, pension, retirement or superannuation scheme of a place outside Hong Kong,

he is exempted from joining an MPF scheme.

Hence, the MPF exemption is only applicable to those persons who do not have the right of abode or the right of stay or who have not been granted unconditional stay in Hong Kong under the immigration regulations and whose visas are granted for employment purposes. The 13-month exemption period refers to “the period during which the person is given permission to remain in Hong Kong”. The commencement date of this period should be determined in accordance with the terms of the corresponding visa.

And the answering your other questions on MPF......
Company is not required to pay any % of MPF in HK?

- If employee is registered under MPF exemption (holds an existing Pesnion or state pension outside of HK) the Company is not subject to Mandatory MPF for both employer and employee. Should employee still want MPF it would be his own voluntary contributions only and nothing from company

- NB: If registered exempt now, please note cannot at any time in the future deregister – so employee will never be entitled to company Mandatory MPF in future

- If employee is not exempt but a foreigner – MPF contributions do not need to be made for first 12 months, however in month 13 MPF is mandatory for both employer & employee – NB in 13 month both must back pay for months 1-12 have to be made (so general advise to start straight away unless can afford full annual payment in one go.


And I don't need to pay MPF during first year of my stay in HK?

- If employee is not exempt but a foreigner – MPF contributions do not need to be made for first 12 months, however in month 13 MPF is mandatory for both employer & employee – NB in 13 month both must back pay for months 1-12 have to be made (so general advise to start straight away unless can afford full annual payment in one go.


How much % of salary is gone towards MPF per month?

- 5% from employer & 5% from employee into MPF

- Only 5% of salary deducted from salary – this is employee contribution

- Capped at HKD 1,250 each per month – so total combined capped at HKD 2,500 per month

- Basically employee 5% is free money to employee

Thank you so much hkexpat for your detailed response, truly appreciate it.

1) So looks like I should opt for MPF right away else I will have to pay big amount on 13th month and as it is when you leave HK, you get back your MPF, right? Do govt deduct any thing on accumulated MPF when you take it back, when leaving HK?

2) On 40000 HKD, 5% is HK$2000, so MPF capped at HKD 1250 means that maximum I will/ can put only HKD$ 1250 in MPF account and I don't need to put full 5% of my salary i.e. KHD2000, am I getting it right? Please confirm.

[elixir.sg]

Originally Posted by hkexpat

Please help me understanding the above statement.
Does this mean that I will only get HKD 7000.00 if I produce the monthly tuition fees bill from school or does this mean that I will get paid HKD 7000.00 regardless of bills/ invoice? Let's say if I don't get school for my kid this year, and I opt for home-schooling for current year, company will not pay me HKD 7000.00 or let's say I don't move my kid in HK till mid-term admissions begin and supposedly he joins school after November then company will start paying HKD 7000.00 from then onwards only?


Yes its likely that the employer will only pay the HKD7k once they receive the invoice from the school.
You maybe able to negiotiate with employer to also cover home schooling, providing its via a company who sends a full-time tutor to teach your child. They could provide an invoice for this service.

Thanks again for this piece of info, I have sent email to employer reconfirming on my take-home, regardless of my kid going to school or not.

[elixir.sg]

Originally Posted by lorgnette

You maybe able to negiotiate with employer to also cover home schooling, providing its via a company who sends a full-time tutor to teach your child. They could provide an invoice for this service.

Probably the tutor must be a registered tutor, with credentials and living in HK as well


Thanks lorgnette for this piece of info, I have sent email to employer reconfirming on my take-home, regardless of my kid going to school or not. If its payable only on kid going to school, then I will talk about paying to full-time tutor, registered tutor etc.

You are right, if any part of the ed allowance is not applied towards schooling, or your child is not in school, then the company might not acknowledge your claims.

You might negotiate if the ed schooling applies to your professional cert upgrading instead.


Sorry didn't get wht you mean by applying it to my professional cert upgrading? Please clarify the underlined text.
[/QUOTE]

[hkexpat]

Re:-MPF
If & when you leave HK you can get your MPF fund back providing you get income tax clearance.

Yes the figures I confirmed earlier re:MPF are accurate. The figure is capped, so on your salary it's on the cap limit.

Income tax- is not deducted from salary monthly, but you should save each month towards your annual tax bill.

[elixir.sg]

Originally Posted by hkexpat

Re:-MPF
If & when you leave HK you can get your MPF fund back providing you get income tax clearance.

Yes the figures I confirmed earlier re:MPF are accurate. The figure is capped, so on your salary it's on the cap limit.

Income tax- is not deducted from salary monthly, but you should save each month towards your annual tax bill.

I see, so in case I dont plan on leaving HK by 13 months then I will have to keep money aside for Income Tax also and if I am leaving then I will not need to worry about it as that money can be deducted from the MPF account.

My employer gave me this equation to calculate the Income Tax -

for income tax, according to HK law, you will pay once for a year. It's pretty low if you bring your family here. Tax free amount is 108000+50000 for spouse+30000 for one kid+family tourist cost once per year, no more than 30000+house renting cost

So with this equation and salary of 40000 p.m. I think annual tax amount for me will be between HKD 5000 - 6000, isn't it? If I am right then there will be enough in MPF account by year end. So it's good in a way that they have this mandatory PF account, forcible saving is blessing in disguise.

Thanks a lot hkexpat

One more thing if I may ask, do you think we will be fine in 40,000 p.m. I m really hoping that I get cheap apartment and admission in ESF school for my kid, then I think we should be fine. But saving in personal account will not be huge as money will go towards MPF every month. Hopefully we are able to pay our bills and can keep aside little money as back-up.