Wages subject to EPF contribution:
In general, all payments which are meant to be wages are accountable in your monthly contribution amount calculation. These include:
- Salary
- Payment for unutilised annual or medical leave
- Bonus
- Allowance
- Commission
- Incentive
- Arrears of wages
- Wages for maternity leave
- Wages for study leave
- Wages for half day leave
- Other payments under services contract or otherwise
Wages NOT subject to EPF contribution:
Among the payments that are exempted from EPF contribution:
- Service charge
Any money or payment either in the form of a service charge, a service fee, a tip or other payments which has been paid by, charged on, collected from or voluntarily given by a customer or any other person (who is not the employer) with respect to the employer's business. This payment is payable to an employee either in whole or in part, directly or indirectly, and whether under a contract of service between the employer and the employee or otherwise.
- Overtime
Any payment due from an employer to an employee for work carried out in excess of the normal working hours of such employee and includes any payment paid to an employee for work carried out on public holidays and rest days.
- Gratuity
Any payment paid by an employer to an employee upon completion of service or voluntary resignation as a recognition of such employee's service.
- Retirement benefit
Any payment paid to an employee upon retirement either compulsory or optional or on medical grounds as stated under the contract of service of the employee.
- Retrenchment, temporary lay-off or termination benefits
Any payment paid by an employer to an employee as a result of the employee's retrenchment, lay-off or termination exercise.
- Any traveling allowance or the value of any travel concession
Any payment paid by an employer to an employee for the purpose of travelling and transport expenses.
- Payment in lieu of notice of termination of service
Amount paid by the employer or employee in lieu of a notice of termination of service by the employer to the employee to terminate his/her services or the employee to the employer upon resignation.
- Director's fee
Fee paid to the director.
Do foreigner / expatriate employees have to contribute EPF?
No, non-Malaysian employees are not required to contribute, but they are given the option to contribute. If an employee has opted to contribute, he/she and the employer are liable to contribute and not allowed to revoke the option made. Source: KWSP