eMPF Payroll Software in Hong Kong: Why Payroll Belongs in Your ERP

Choosing eMPF payroll software in Hong Kong became more urgent in 2026. On 3 May 2026, the Mandatory Provident Fund Schemes Authority (MPFA) announced that every MPF scheme had moved onto the eMPF Platform, covering about 300,000 employers and 11 million accounts. A year earlier, on 1 May 2025, the abolition of the MPF offsetting arrangement took effect, changing how severance and long service payments are calculated.

Together, these changes make spreadsheet payroll riskier than ever. Employers now need clean contribution files for eMPF, a reliable record of each employee's service before and after the transition date, and accurate IR56 forms whenever someone joins or leaves.

This guide explains what changed, what it means for employers, and how Odoo's Hong Kong payroll localisation handles each requirement.

What changed in Hong Kong payroll in 2025 and 2026?

What does eMPF mean for employers?

The MPFA's announcement describes the scale of the eMPF Platform: 12 trustees, about 5 million scheme members, 300,000 employers, 11 million accounts and more than HK$1.5 trillion in assets. It calls full onboarding "the culmination of nearly two years of dedicated efforts".

The platform is also cutting costs. The average trustee administration fee was 58 basis points before eMPF, fell to 37 basis points after two years, and dropped to 29 basis points from 1 April 2026. The MPFA projects a future range of 20 to 25 basis points and administration cost savings of HK$50 billion within less than 10 years.

For employers, the practical change is that contributions, member records and reports flow through one standard platform. Payroll systems that produce eMPF-ready files save time every month. Systems that do not leave finance teams re-keying data, which is where errors creep in.

How does the end of MPF offsetting work in practice?

The government's announcement on 1 May 2025 explains the core rule. From the transition date, employers can no longer use the accrued benefits from their mandatory MPF contributions to offset severance payments (SP) or long service payments (LSP) for employment after that date. The change is not retrospective, so the portion of SP or LSP relating to service before 1 May 2025 can still be offset. Benefits from voluntary contributions and contractual gratuities can also still be used.

That means every SP or LSP calculation now has two parts: pre-transition service and post-transition service. Employers need accurate start dates, wage history and contribution records to calculate both.

The government also launched a 25-year subsidy scheme on the same day to share part of employers' SP and LSP costs. Employers must pay the SP or LSP first and then apply. Details are on the TransitionEase Portal.

For a business with long-serving staff, the difference can be significant. Getting the split wrong can mean underpaying an employee, which creates a legal risk, or overpaying and losing money unnecessarily. A payroll system that stores each employee's full service and wage history makes the calculation repeatable rather than a one-off spreadsheet exercise.

How does Odoo handle Hong Kong payroll?

Odoo's Hong Kong payroll documentation says the localisation complies with the Employment Ordinance (Cap. 57) and Inland Revenue Department requirements, and is "fully updated for the 2025 MPF offsetting transition rules". The documentation source lists these modules:

MPF and eMPF

Payslips calculate mandatory and voluntary MPF contributions for both employee and employer. Odoo-generated eMPF contribution reports are designed to be uploaded to the eMPF portal. A "Use MPF Offsetting" setting records pre-transition and post-transition offset amounts when calculating SP and LSP.

IR56 forms

Odoo generates the four main employer returns:

• IR56B: the annual Employer's Return of Remuneration and Pensions.
• IR56E: notification of a new hire.
• IR56F: notification when an employee leaves.
• IR56G: notification when an employee leaves Hong Kong.

The documentation notes that employees already reported on an IR56F or IR56G should not be included again in the annual IR56B, which avoids double reporting.

Leave, wages and bank files

Odoo supports Average Daily Wage (ADW) calculations, paid sick leave and maternity leave at 80% of ADW, paternity leave, statutory holidays and general holidays. It can also produce HSBC Autopay payment files.

What did Odoo 19.3 and Odoo 20 add?

The Odoo 19.3 release notes (May 2026) list four Hong Kong payroll improvements:

• A rentals system so employees can submit rental requests and monthly proof of payment.
• Minimum consecutive leave durations to determine eligibility for 80% ADW leave.
• Daily, weekly, bi-weekly and semi-monthly pay schedules, with MPF and allowances scaled to each period.
• A salary structure for casual workers in catering and construction, using MPF Industry Scheme rates.

The Odoo 20 version of the documentation adds an Employer's File Number field for IRD reports and a housing benefit system aligned with IRD guidance on how reimbursements, direct payments and allowances affect taxable income. Odoo partners report that Odoo 20 launched in September 2026; confirm availability for your hosting before planning around it.

Migration checklist

Before you switch

1. Clean employee master data: start dates, wage history, MPF scheme and member details.
2. Record the offsetting split: confirm each employee's service before and after 1 May 2025.
3. Collect year-to-date figures so IR56B is correct if you change systems mid-year.
4. Map your bank payment process, for example HSBC Autopay.

During parallel runs

1. Run at least one month in both systems and compare every payslip.
2. Test an eMPF contribution file against the eMPF portal.
3. Test a termination with SP or LSP to check the offsetting calculation.

After go-live

1. Generate IR56E and IR56F as part of hiring and exit checklists.
2. Review the MPF Industry Scheme rules if you employ casual workers in catering or construction.

Payroll rules carry legal risk, so confirm calculations with your accountant or HR adviser, especially for the first SP or LSP case after migration.

The bottom line

Hong Kong payroll has changed more in the past 18 months than in the previous decade. With eMPF fully live and MPF offsetting abolished, employers need systems that produce standard contribution files and keep reliable service records, not spreadsheets held together by manual checks.

Odoo's Hong Kong payroll localisation already covers MPF, eMPF reporting, offsetting rules, IR56 forms and local leave rules, and it is still being extended. To plan a payroll migration or a full ERP rollout, ONEXT's ERP and Odoo team can work with you as a trusted implementation partner.