Ch%202%20%20retirement%20benefit%20analysis

Ch%202%20%20retirement%20benefit%20analysis - NOT $11,000 e...

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222b3a5523e5d2400401b7657df8c10c30dea2d8.xls 222b3a5523e5d2400401b7657df8c10c30dea2d8.xls Retirement Benefit Analysis sample EE will receive ER's Contribution Employer : CUHK CO Ltd (ER) less than 4 years 0% Employee : CHAN Tai-man (EE) 4 to less than 5 years 40% Basic Monthly Salary : $10,000 per month 5 to less than 6 years 50% 6 to less than 7 years 60% 7 to less than 8 years 70% 8 to less than 9 years 80% CHAN Tai-man will receive $9,500 per month (Every month) 9 to less than 10 years 90% He will receive (a) $1,000 from ER, (b) $500 from EE, and (c) investment gain/(loss) more than 10 years 100% the excess will be fully taxable --- taxpayer may apply to spread the benefit (Max 36 months) Sample Employment Contract :- Retirement Fund Contribution : ER 10% and EE 5% Tax position : CHAN Tai-man) the employee will be taxed on $10,000 income
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Unformatted text preview: NOT $11,000 e ach year He will receive the retirement benefit tax-free if the retirement fund is a recognized one. To be a recognized retirement plan, the ER's contribution percentage cannot > 15% and EE can receive the total retirement benefit only if EE is (1) death, (2) i ncapacity, (3) retirement from employment at specific age . Or (4) permanent department from Hong Kong If the EE leave the company within 10 years (120 months) only proportionate benefit (PB) is tax-free The retirement plan will be submitted to IRD for approval and if approved, it is a r ecognized retirement plan . For Mandatory Provident Fund ( MPF ) , the tax treatment is similar to recognized retirement Plan . Except that EE will have a tax free P Fund contribution of $12,000 per year....
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