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Everything You Need to Know About the EPF

If you're new to the workforce, there's a chance you don't yet know what the Employee Provident Fund (EPF) account is and what it means for your finances. Let's go and learn more about the leading retirement account in Malaysia!

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Everything You Need to Know About the EPF

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  1. Everything You Need to Know About the EPF

  2. If you're new to the workforce, there's a chance you don't yet know what the Employee Provident Fund (EPF) account is and what it means for your finances. Let's go and learn more about the leading retirement account in Malaysia!

  3. What is the EPF? • You probably already know this, but in case you didn't know, EPF is essentially a retirement savings account for private, public sector employees, and not pensionable. EPF members are made up of these employees and those who voluntarily choose to contribute as well. • The EPF agency collects contributions from employers at a rate of 13% for employees who receive salaries of RM5,000 per month or less (and 12% for those who earn more than RM5,000 per month). Employees also have the option of contributing 8% or 11% of their monthly salary. Contributions and dividends will be divided into two accounts; 70% goes to Account 1 and 30% to Account 2. • These contributions are mandatory for all employers and employees; it is also an avenue for employers to provide structured benefits and fulfill a moral obligation to their employees.

  4. Register as a member of EPF • Registration is automatic when the EPF rate receives the first contribution in your name (based on your identification card details) from your employer. You can also register by mail or at the EPF counter using the KWSP 3 form. • What you need to do after having an EPF number is to register for an online account with EPF (i-Akaun). With an online account, you can save yourself the hassle of making the trip to the EPF office for withdrawal requests, obtaining your EPF statements for the current and last year, as well as updating the details of your correspondence and nominations. All of these account activities are available to perform online through i-Akaun. • Signing up for the account online is simple; all you need to do is obtain the activation code from an EPF kiosk or counter and proceed to the login page on the EPF website to complete your registration, and voila, you will have your own i-Akaun!

  5. EPF Benefits You Should Know About • In addition to the account being a retirement savings vehicle, you are also entitled to certain additional benefits. Here are four important ones, some of which you may not be aware of: • -Dividend Earnings: The EPF 2021 guarantees minimum annual dividend earnings of 2.5%, although the average is 5% to 6% over the last 10 years. At this rate, your savings are protected from inflation and accumulate quite healthily over the long term. • -Death Benefit: The members of the EPF's closest relatives or dependents can receive a death benefit of RM 2,500 if the members have not reached the age of 55 (subject to consideration and other conditions by EPF calculator).

  6. -Disability Benefit: RM5,000 will be provided to eligible members who request disability retirement and are not fit for work (subject to consideration and other conditions by EPF). • -Tax exemptions: Your contributions are tax deductible up to a maximum of RM6,000 per year, which includes your life insurance premium. Additionally, dividend earnings from EPF investments are also tax-free.

  7. Can you make withdrawals? • You can make withdrawals, but only for specific purposes outlined by the agency. For example, you can withdraw a portion to do Hajj, invest in unit trusts, pay for your education, pay off your home loan, finance your medical expenses, or buy property or build a house. • Between the ages of 50 and 54, you can withdraw some or all of the funds from Account 2. You can also fully withdraw your account if you plan to leave the country or when you turn 55.

  8. Make voluntary contributions • If you are unemployed, you can still withdraw with EPF contribution rate account and enjoy the benefits (subject to terms and conditions). Those who are self-employed, domestic servants, retired workers, or "persons not defined as employees in the 1991 EPF Act" can register for self-employment contributions. You can contribute from RM50 per month up to a maximum of RM60,000 per year. • Still, are EPF contributions the best way to save for retirement? Well, we lean towards the affirmative. For one thing, whether you're employed or not, everyone needs retirement savings, and with the guaranteed returns from the EPF, you'll always have something to turn to. • Also, since your contributions are tax deductible, you can reduce the amount of tax you pay each year.

  9. About Us • QNE Software SdnBhd (QNE) is a dynamic organization located in Kuala Lumpur (KL) that actively provides Accounting System to the South East Asia market. QNE’s solutions are designed specifically to meet the requirement of local business practices and challenging environments. Since QNE (formally known as OneStop Software Solutions (M) SdnBhd) was formed on 15 August 2001 under the Companies Act 1965, QNE’s is known for its strong commitment to research and development. As a result, QNE was awarded the MSC Pioneer Status in April 2005. • Website - https://www.qne.com.my/

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