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Payments Subject to EPF Contribution

In general, all monetary payments that are meant to be wages are subject to EPF contribution. These include:

  • Salaries
  • Payments for unutilized annual or medical leave
  • Bonuses
  • Allowances (except a few, see below)
  • Commissions
  • Incentives
  • Arrears of wages
  • Wages for maternity leave
  • Wages for study leave
  • Wages for half day leave
  • Other contractual payments or otherwise

Payments Exempted From EPF Contribution

The payments below are not considered “wages” by the EPF and are not subject to EPF deduction.

  • Service charges (tips, etc)
  • Overtime payments
  • Gratuity (payment to employee payable at the end of a service period or upon voluntary resignation)
  • Retirement benefits
  • Termination benefits
  • Travel allowances
  • Payment in lieu of notice of termination of service
  • Director’s fee
  • Gifts (includes Cash Payments for holidays like Hari Raya, Christmas, etc.)

Please read our next articles to know more about the EPF contribution rate and how to make EPF payment.

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