Advice needed on Provident Fund (EPF) contribution

Hi better check your employer does not have to contribute 12% in fact the legal minium is 5RM a month for an expat. If they do indeed pay 12% then basically they are doing it as a "tie in" bonus system. As in you do a runner and lose your money. Worth doing as a saving scheme. No problem getting money back

A good deal if they pay EPF employers contribution.

I would suggest you to take EPF plan without thinking, not everyone gets this offer. Dont miss it. Just grab it.

Benefits:

1. This is considered as your retirement plan for 3 yrs contract though
2. Up to yearly 6k can be exempted from your tax
3. if you are entitled for bonus, you will enjoy the same contributions from both parties and its a huge saving depends on your bonus.
4. As far as i'm aware, easy to withdraw upon exiting. A simple process.

Also dont forget that upon exiting, you still need to close your
income tax file, so better start saving now rather suffer later.

Hope this helps.

Cheers!

Thank you all, I have an email confirming employers contribution of 12 percent,  however will counter check with other employees also. It would be great to hear more responses on this forum. I have almost a month to decide anyway,

Logically speaking,

If you do not accept EPF:
- Happily you will take home additional 11% and at the same time you will not enjoy addition 12% from the company
- Will company increase your salary by 12%? - if so, you're so lucky! But i doubt though

As i said, 23% is considered as a huge saving and equally you will be able to exempt RM 6,000 from your annual income - This would certainly help to reduce your monthly TAX deduction.

For instance, assuming minimum expatriate salary is 5,000
Basic Salary:    5,000   
23% Saving:      1,150   
Yearly Savings: 13,800   
3 Years:        41,400

Assuming you're getting annual bonus:
Annual income: 5,000 x 12 = 60,000
Bonus % is 20%: 60,000 x 20% = 12,000 and 12,000 x 23% = 2760 x 3 Years = 8,280

So upon exiting after 3 years, you will take home 49,680...i don't know how much in Indian Rupees.

Though it sounded forced savings but indeed good for long term survival.

No more further comments from my end. Good luck!

It's a common setup that the employer pays 12% and you pay 11% so there's nothing weird with that.

Good things for you as mentioned before, tax deductible and will also get dividend paid out to your EPF account every year (2010: 5.80%, 2011: 6.0%, 2012: 6.15%).

farm wrote:

It's a common setup that the employer pays 12% and you pay 11% so there's nothing weird with that.

Good things for you as mentioned before, tax deductible and will also get dividend paid out to your EPF account every year (2010: 5.80%, 2011: 6.0%, 2012: 6.15%).

no it's not! Rare for expats to get EPF of 12"

Thank you all,  special thanks to Rasai for the calculation,  I have decided to join EPF,

This is very true Nemodot, 12% company contribution is not common for foreigners. Law said RM5 However it is totally upto company to decide their contribution. Usually most of the multi-national companies offer you 12% since they want to maintain "EMPLOYER OF THE CHOICE".

@ Farm, Thanks for the highlight on yearly divident part as i missed out in my basic calculation.

Nemodot wrote:

farm wrote:

It's a common setup that the employer pays 12% and you pay 11% so there's nothing weird with that.

Good things for you as mentioned before, tax deductible and will also get dividend paid out to your EPF account every year (2010: 5.80%, 2011: 6.0%, 2012: 6.15%).

no it's not! Rare for expats to get EPF of 12"

I think he was referring to a Malaysian who works as an employee in Malaysia.

It is mandatory for the employer to contribute 12% (minimum) and the employee 11%.

There are some MNCs paying more than 12%, 13%/14%.

It is mandatory for the employer to contribute 12% (minimum) and the employee 11% - This applied ONLY for LOCALS.

Just for your info - I'm working for well reputed global MNC and I've received just RM 5.00 from the employer for 3 months. We had to fight for 12%.

#SHinPJ you can read all about KWSP withdrawals here

http://www.kwsp.gov.my/portal/en/web/kw … withdrawal

Yup mandatory for local but foreign just pay 5rm @ follow local epf contribution

Hi My best advice is to go to the nearest EPF office and check all the queries. It is always better to get first hand information. The service is EPF is friendly and they are very helpful. Too many advices and suggestion can make you confused.  Do what you think is best for you.

VSK8000 - surprised to see you participating as you obviously don't rate forums?  There has been some very good information presented in this discussion and at the end of the day it is down to the employer to explain what they intend to offer their international staff.  EPF have no say in that.

Gravitas - first of all let me apologise. I am new to this for5um so I do not know the rating systems. No doubt the employer has the option of whether to pay or not, it is always EPF have the first hand information.

Hi guys,

I know this thread is too old, but i was just exploring some information about EPF for foreigners and found this article.

expatgo.com/my/2013/08/21/making-sense-of-the-employees-provident-fund-epf-a-guide-for-foreigners-in-malaysia/

It explains good. But for withdrawal it states that, foreigners can withdraw only when they permanently left the country or die... Is it true?
Can we withdraw it when we want to change job or just want to discontinue EPF plan?

Thanks!

EPF - Types of Withdrawal

Sorry, you cant withdraw if you change job

Ok, thanks!

You have to leave malaysia and cut all ties with malaysia eg close all bank accounts and sell property.

The main worries I have are

- currency stability. Most expats cashing in now as forced back lost 30% making them worse off than if they had sent the money home monthly

- is the epf safe? Political worries?

I am new here, I'm a Malaysian.  You can actually discuss with your employer to give you your share, 11 or 12% and come to an agreement with him, but it has to be in writing. A frend of mine had it done that way, since she wasn't into savings.

However, some employers in Malaysia will try to avoid paying into EPF. You would not know unless you go to EPF to check. I had a bad experience with an employer, no EPF at all, so I went to EPF and they paid in 2 weeks. Of course the employer was mad at me by which time I had resigned. lol

Be aware of such employers in this country. When its bonus time they will find many excuses not to pay the same as others too.

Good luck.

Many malaysians report that epf deducted from their salaries dont appear at the epf. Common one that.

Most malaysians i know dont want to use the epf as scared that it will end up like the 1mdb fund! They withdraw money asap from it.

I have withdrawn some funds from EPF. So far so good. I still get dividends on my balance. The crook is not EPF , its the employers.

Cheers.