MPF Offsetting Calculator (after the 1 May 2025 abolition)
This MPF offsetting calculator applies the Labour Department formula after the abolition of offsetting (1 May 2025). It estimates the pre- and post-transition portions of severance payment / long service payment and the maximum that can be offset by employer mandatory benefits. Only the pre-transition portion can be offset that way. Generic arithmetic; not legal advice.
Last updated: 2026-10-21
Key points of the abolition
The abolition of the MPF "offsetting" arrangement took effect on 1 May 2025 (the "transition date"). From then on, employers cannot use accrued benefits from their mandatory contributions to offset severance payment (SP) or long service payment (LSP) for employment on or after that date. Benefits from employer voluntary contributions and length-of-service gratuities can still be used.
For employees already employed before the transition date, SP/LSP is split: the pre-transition portion (last full month's wages immediately before the transition date × 2/3 × pre-transition years, which can still be offset by employer mandatory benefits) and the post-transition portion (last full month's wages before termination × 2/3 × post-transition years, which cannot). Monthly wages are capped at HK$22,500 for the calculation (max HK$15,000 per year of service) and the total is capped at HK$390,000, with any excess deducted from the post-transition portion.
Labour Department abolition site · Transfer guide
FAQ
What are the limitations?
It applies the general formula for monthly-rated employees only; it ignores the average-wage option, pro-rating details, daily-rated calculations and special cases. Actual entitlements follow the Employment Ordinance and Labour Department guidance.
Is there a government subsidy for employers?
Yes. The Labour Department's Subsidy Scheme for Abolition of MPF Offsetting shares employers' costs for the post-transition portion; see the Labour Department website.