Celergo would like to advise you of an important regulatory change in Malaysia that has an impact on your employees and requires attention.
In the revised Malaysia Budget of 2016 published on January 28, 2016, the Employee Provident Fund (EPF) announced the reduction of the employee’s monthly statutory contribution rate from 11% to 8% for members below age 60 and 5.5% to 4% for those ages 60 and above. This change is effective March 2016 through December 2017. Please note there is no change to employer’s statutory contribution rates.
EPF members can opt to retain the current contribution rate of 11% or the current rate that they are currently contributing by completing the “Notis Pilihan Mencarum Melebihi Kadar Berkanun” (Notice to contribute more than statutory rate) – KWSP 17A Khas2016. You may find the form on the KWSP Government website. Once you have the form:
1. You may distribute the form to each respective employee to fill in individually or combine all employees who would like to retain their current contribution rate.
2. Employee (to populate part B) and Employer (is to populate part C). Both need to sign on the form respectively. You need complete all required details before signing.
3. Company stamp needs to be affixed at part C next to employer’s signature.
4. After that, your payroll provider should be able to assist in submitting the completed form on your behalf.
If your employees do not wish to retain their current rate, no action is needed as their rate will be reduced effective March 2016 payroll. For more information, please visit our website.
Celergo Alerts are provided by Kira Rubiano, Sr. Partner Management Specialist – Europe/Asia Pac
**This article is for informational purposes only. It is not intended to constitute legal advice.