Why deal with MPF contribution in multiple payroll batches?
You are paying staffs in multiple payroll batches within the same pay cycle (e.g. paying bonus separately from monthly salary). You want to make sure the related MPF contribution is correct.
How does Backstage handle MPF contribution in multiple payroll batches?
Payroll batches with the same MPF Contribution Date is regarded by Backstage as belong to the same MPF contribution cycle.
Upon preparing of each payroll batch, Backstage will allocate the outstanding contribution to the current payroll batch, as calculated by:
- Total MPF Contribution, as calculated by Total Relevant Income times contribution percentage
- Minus MPF contribution from Posted payroll batches
- This gives the Outstanding MPF contribution
For example, you have bonus payment of 5,000 in the first payroll batch. As this does not meet the minimum contribution requirement, the employee contribute nothing in this batch. When you proceed the monthly payroll, let's say the salary is 15,000. The total relevant income is 20,000, total MPF contribution is 1,000. As there is no contribution is made in the first batch, 1,000 will be deducted in the second batch.
As a second example, you have bonus payment of 10,000 in the first payroll batch. $500 is deducted as MPF contribution. When you proceed the monthly payroll, let's say the salary is 30,000. The total relevant income is 40,000, total MPF contribution is 1,500. As $500 is already deducted in the first payroll batch, the outstanding contribution of $1,000 will be deducted from the second payroll batch.
Steps to handle MPF contribution in multiple payroll batches
- Create and prepare your first payroll batch
- Choose the correct MPF contribution date
- Once done, Post the payroll batch (as only posted payroll batch will be considered in total monthly contribution)
- Create your second payroll batch
- Choose the same MPF contribution date
- Note the MPF contribution already consider the first payroll batch
- Once done, post the second payroll batch
- Repeat for third or more payroll batch as needed