What is defined contribution in SAP PY-HK - Hong Kong, China?

SAP Term: defined contribution

• Component: PY-HK

• Component Name: Hong Kong, China

• Description: Percentage of the employee's salary which the employer and/or employee is obliged to contribute towards the employee¡¯s retirement scheme. The percentage contributed by the two parties may or may not be the same. It is often determined by factors such as the employee's years of service, age and salary. It is an ORSO scheme.

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• Key Concepts: 
  Defined contribution is a type of retirement plan in which the employer contributes a fixed amount to the employee’s retirement account. In SAP PY-HK Hong Kong, China, the employer’s contribution is based on the employee’s salary and is subject to certain limits set by the government. The employee can also contribute to their own retirement account, but this is not mandatory. 
  
  How to use it: 
  In SAP PY-HK Hong Kong, China, employers can set up defined contribution plans for their employees. The employer will need to specify the amount of their contribution and any other conditions that apply. The employee can then choose to contribute to their own retirement account, but this is not mandatory. 
  
  Tips & Tricks: 
  It is important for employers to keep track of their contributions and any changes in the government regulations that may affect their contributions. Employers should also ensure that their employees are aware of their rights and obligations under the defined contribution plan. 
  
  Related Information: 
  For more information about defined contribution plans in SAP PY-HK Hong Kong, China, please refer to the official website of the Inland Revenue Department (IRD). The IRD provides detailed information about the rules and regulations governing defined contribution plans in Hong Kong.