A friend of mine sent me a email showing how if you are contributing 8% that would effectively mean you pay more tax! This may apply for those who’s earnings are above a certain amount. Have a look at the calculation below :

Assume monthly basic salary is RM4000

  • If your monthly EPF contribution is  11% ( RM440 ), taxable income = RM3560, income tax payable = RM77.
  • If your monthly EPF contribution is    8% ( RM320 ), taxable income = RM3680, income tax payable = RM109.

Conclusion :

If you choose to contribute 8%, you will end up paying more income tax to the government, which will make the government richer. Finance Minister Najib said this measure is meant to boost up the slow-down market, but from this example wee see that the money does not go into the market. Instead the money goes direct into the government through the greater amount of income tax that we will have to pay every month. Obviously this measure does not seems to help the market at all.

So you still lazy to fill up that form??

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Category: Malaysia

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