Payments Subject to EPF Contribution
In general, all monetary payments that are meant to be wages are subject to EPF contribution.Ā 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 āwagesā 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 theĀ EPF contribution rateĀ andĀ how to make EPF payment.
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