Tag: EPF

  • Tax Relief on Voluntary Contribution to Employees Provident Fund

    Tax Relief on Voluntary Contribution to Employees Provident Fund

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani

    Current Position

    Subsection 49(1) of the ITA provides that a deduction up to RM 7,000 can be claimed by an individual on –

    1. payment of premium on life insurance policy;
    2. contribution to an approved scheme (other than a private retirement scheme) made by the employee or by a self-employed person within the meaning of the Employees Provident Fund Act 1991 [Act 452]; or
    3. contribution made under any written law relating to widow, widower and orphan’s pension or under any approved scheme within the meaning of any such law.

    To explain in a more layman’s terms, individual income tax relief is given on contribution to approved provident funds such as Employees Provident Fund (EPF), takaful or life insurance premium payments as follows:-

    From the year of assessment 2022, the scope of individual income tax relief for EPF contributors is expanded to include self-employed, voluntary contributors, including civil servants under the pension scheme up to RM4,000.

    For civil servants under the pension scheme not voluntarily contributing to EPF, income tax relief on takaful contributions or life insurance premium payments can be claimed up to RM7,000.

    Proposal

    To further encourage voluntary contribution to increase savings in preparation for old age, it is proposed tax relief for life insurance premiums or takaful contributions be restructured as follows:

    This new treatment applies to civil servants under the pension scheme.

    Effective Date

    From the year of assessment 2023.

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  • The Difference between a Contractor / Freelancer and an Employee

    The Difference between a Contractor / Freelancer and an Employee

    1. The decision to report a person’s income on Form E is based on whether or not he is an employee, not on whether there are EPF or SOCSO contributions or not.

    2. As a result, the employer must determine if the individual is an employee, a contractor, or a so-called freelancer before proceeding.

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    1. 一个人，要不要把他的收入报在 Form E，取决于他是不是你是员工，而不是有没有帮他给 EPF，或者 SOCSO

    2. 因此，老板首先需要去鉴定，这个人的身份，到底是员工，还是承包商，或所谓的自由职业者

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  • EPF (Amendment of Third Schedule) (No. 2) (Extension of Operation) Order 2021

    EPF (Amendment of Third Schedule) (No. 2) (Extension of Operation) Order 2021

    126.-Employees-Provident-Fund-Amendment-of-Third-Schedule-No.-2-Extension-of-Operation-Order-2021Download
    126.1-P.U-A-467-2021Download
    126.2-P.U-A-387-2020Download
    126.3-KWSP17A-Khas-2022Download

    1. On 23 December 2021, the Minister, in the exercise of the powers conferred by section 74 of the Employees Provident Fund Act 1991 [Act 452], gazetted the Employees Provident Fund (Amendment of Third Schedule) (No. 2) (Extension of Operation) Order 2021 [P.U. (A) 467 (2021)].

    2. This Order comes into operation on 1 January 2022.

    3. As a result of this Order, the government maintains the statutory contribution rate at 9 percent for the period beginning on January 1, 2022, and ending on June 30, 2022, after which the minimum statutory contribution rate for employees will return to 11 percent.

    4. Employees who wish to contribute an additional 2 percent on top of the statutory rate of 9 percent for their portion of the employee’s share (i.e. to remain 11%) must complete Form KWSP 17A (Khas 2022).

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    1. 2021 年 12 月 23 日，部长行使 1991年《雇员公积金法令》[第452号法案] 第74条赋予的权力，在宪报上颁布了《《2021年雇员公积金(附表三修订)第2号)(延长执行) 指令 [P.U. (A) 467 (2021)]。

    2. 上述指令自2021年1月1日至2021年12月31日这段时间生效，政府继续将雇员的公积金法定缴款率维持在9%。之后，雇员的最低法定缴款率将恢复到11%。

    3. 如果雇员公积金会员选择不要降低缴纳率 [也就是说要继续维持在现有的11%缴纳率)；在这种情况下，雇员必须填写 KWSP 17A 表格 (Khas 2022)。

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