It is extremely dangerous when we thought we know it all. That is the time when we stop learning and leave a big gap from knowing to understanding it well.

Hey, I thought why not let me bring you back to the basics.

Malaysia EPF and how do we calculate the contribution percentage.

Aiden, are you kidding me, who wouldn’t know and that’s so simple?

Yeah, let’s assume we start from zero and give ourselves an opportunity to re-learn and better understand how EPF is being calculated. You’ll be surprised many new entrepreneurs may find this helpful.

The Employees’ Provident Fund (Kumpulan Wang Simpanan Pekerja), commonly known by the acronym EPF (or KWSP), is a government agency under the Ministry of Finance. It manages the compulsory savings plan and retirement planning for private-sector workers in Malaysia. 

Generally, all monetary payment is subjected to EPF contribution and you may see the lists below

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What about payments that are not considered “wages” by the EPF and ARE NOT subject to EPF deduction? Take note of the below: 

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Let me give you an example: ⭐️

The calculation of EPF employer and employee contributions – Mr Lee: 

Age: 35 – maintained contribution at 11% 

Basic salary: RM 3,500 

Overtime: RM 300 (exempt) 

Travel allowance: RM 500 (exempt) 

Commission: RM 1,000

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Hope the simple illustration helps you understand which wages are subjected and wages that are exempted from EPF’s monthly deductions.

Stay passionate.

#epfcalculation #salary #payrolloutsourcingservices #reliablepayrollservices #business #HR