Skip to main content

6. I was a member of a Recognized Occupational Retirement Scheme (“RORS”) but not a MPF Scheme, and I left my employment. Are the accrued benefits withdrawn from the RORS taxable?

In broad terms, the tax treatment for the accrued benefits withdrawn from an RORS is as follows:


Relevant portion

Reason for withdrawal

Whether Taxable

Employee's contributions

Employment terminated under any circumstances

Always fully exempt

Employer's contributions

(1) Retirement, death or incapacity (lost of working ability due to injury/illness)

(2) Termination of service
  (a)10 years of service or more
  (b)Less than 10 years of service



If the sum does not exceed the Proportionate Benefit, it is fully exempt. If exceeded, the amount exceeding the PB is taxable.

Proportionate Benefit = Accrued benefits# x No. of months of service* ÷ 120

# The part relating to employer's contributions
* Only completed months of service will be counted




If after serving 7 years 6 1/2 months an employee left his employment, and from the RORS he received accrued benefits representing employer's contributions of $100,000, the amount that will be exempt from Salaries Tax should be:


PB = $100,000 x 90 complete months ÷ 120 = $75,000