Cancelling MPF Offsetting - Pitfalls that bosses should know
2022-4-19
Cancelling MPF Offsetting has entered the legislative stage. But there is a lack of discussion in society, and many bosses don't understand the bill and don't care. In fact, there is a big financial trap in it. Bosses must be aware of it.
1. Thinking that the government will cover the cost The government will never cover the cost, but will only subsidize part of it, and the subsidy of the long-term service payment has decrease every year. From the 10th year, the subsidy is only 20% or less. In other words, the cost to employers have increased significantly.
2. Providing 1% of the employee's salary to the "special savings account" every year to complete the responsibility This is a huge misunderstanding. The "Special Savings Account" is used to deduct the long service payment of dismissed employees. It is estimated that within 10 years, when 4 employees leave, the "specialized savings account" will already spend most of the money, and when another employee leaves, the employer will be responsible for all long service payments. Note that the maximum compensation per employee is $390,000. For SMEs with a large number of employees, for example, if 10 employees leave the company, it is 3.9 million, which is definitely not a small number for SMEs.
Mr. Shaw Ka-fai has two videos explaining some of the content, which you can refer to the related link
Bosses, please be sure to understand the content of the draft in detail and make appropriate preparations to avoid a sudden and unbearable debt crisis.
If you are not clear about the calculation of the financial burden of canceling MPF offsetting, please feel free to contact us, we can help you to understand your financial burden.
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