Income Tax - Personal allowances

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  1. #1

    Join Date
    Aug 2010
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    North Point, HK
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    Income Tax - Personal allowances

    Hi everyone,

    Was just wondering what is the maximum allowance I can contribute to an MPF or a retirement scheme? Or where I can find that info... Starting a job soon and I have the option of contributing more to my MPF and I don't want to be dinged.

    Thanks,
    ling


  2. #2

    Join Date
    Sep 2007
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    Yuen Long
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    1,564

    Here is the website with all the info you require MPFA | Mandatory Provident Fund Schemes Authority


  3. #3

    Join Date
    Jun 2005
    Location
    Hong Kong
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    You can contribute as much as you want, but the contributions are only tax deductible up to 15% of your total salary. Personally I would put the minimum possible into MPF schemes - they are very poor performers, with high management fees. You would recover the tax paid in extra yield within a very few years if you invested the money directly yourself.


  4. #4

    Join Date
    Nov 2010
    Location
    Kowloon Tong
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    282

    I obviously don't know your circumstances, but I tend to agree with PDLM that you should think twice about trying to max out your MPF contributions for some tax or other seemingly smart reason.

    In my experience, money put into your MPF is effectively dead money because you'd be foolish to assume much in the way of returns but you will be hit with relatively high admin costs.

    A lot of us on this forum take investing on our own very seriously, and I'd personally encourage you to include in your calculations some alternative investment strategies such as investing directly in local shares or some form of better performing managed/index fund if you're not a do-it-yourself kind of person.

    Also bear in mind that dividends and capital gains are not taxed here (which might be the better tax advantage to go for) - although if you're a US citizen this tax benefit might not be so straightforward.

    Last edited by John Doe Jr; 04-02-2011 at 09:37 PM.