Malaysia Payroll Human Resource KWP Socso Tax Report24Hours365Days

WHO SHOULD CONTRIBUTE TOWARDS THE FUND ?

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All employees in Malaysia who have reached the age of 16 and employed under a contract of service whether express or implied, and whether oral or in writing must be registered as a member of the Employees Provident Fund.

An employer will contribute 12% of the employee's wages and the employee contributes 11% of the monthly wages towards the employee's account.

Prior to 1st August 1998, expatriates and foreign workers were not required to contribute to the EPF although they may elect to do so.

However, with effect from 1st August 1998, all foreign workers and expatriates earning less than RM2,500 per month are also required to contribute to EPF with the exception of certain categories.

Those who are exempted from making the compulsory contribution are

employees or workers holding Employment Pass or expatriates holding Visit Pass (Temporary Employment) whose monthly wages is not less than RM2,500

Thai workers who enter Malaysia with a Territorial Pass

Seamen

Foreign domestic maids

Self-employed persons

Out-workers who do cleaning and alteration repair works

Persons detained in custody, in prison, Henry Gurney School and mental hospital

Pensioners

Nevertheless, the above can choose to contribute to the fund.

Where a member continues employment after withdrawing the contributions upon retirement, such member may opt to continue contributing to the EPF by submitting the KWSP 20/20A Form.

The statutory rates of contributions are as follows :

	% of contributions of employees' wages
	Employer	Employee
All except expatriates and foreign workers	12%	11%
Expatriates and foreign workers (except those excluded)	RM5 per person	11%

Employers and employees are, however, allowed to elect to contribute at higher rates.

WHAT IS EMPLOYEES PROVIDENT FUND ?

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Employees Provident Fund is a compulsory savings scheme in Malaysia. Its primary aim is to provide a measure of security for old age retirement to its members. It also provides supplementary benefits to members to utilize part of their savings for house ownership and other withdrawal schemes.

EPF is the abbreviation for Employees Provident Fund. Employees Provident Fund is commonly known in the Malay term as KWSP or Kumpulan Wang Simpanan Pekerja.

Employees Provident Fund Act 1991 is the act governing the Employees Provident Fund in Malaysia.

New Members’ Guide To KWSP / EPF

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Landing your first job is a wonderful experience. It is a start of a new chapter in your life. At the same time, it can also be scary. You are now responsible for your own money.

Now, apart from the formalities that you have to go through with your employer, there are also certain formalities that you have to go through with the Government, through its agencies. There are matters related to your income tax as well as your contributions to the Social Security Organization (SOCSO) and Employees Provident Fund (EPF).

Income tax is self-descriptive, while SOCSO is a form of an insurance policy to cover you during your working hours. EPF contributions, however, are for your own use after your retirement. A compulsory savings account, if you like.

You may want to note that apart from your own contributions, which come from your salary, your employer is also required to contribute towards your EPF savings.

source: http://www.kwsp.gov.my

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2009-03-03T06:07:00.000-08:00

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