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10/10/2009 19:14:08
Re: Is Allowance eligible for EPF deductions

I am working in an audit firm. My basic salary now is RM1,600 and my fixed allowance is RM600. My employer of course will contribute the 12% EPF based on RM1,600. Nowadays, employer wants to save staff cost by only increase the allowance instead of the basic, this way they avoid paying additional EPF on every increment. So my salary for the past 10 years remain RM1600 whereas my allowance kept increase. So, if actually an employee receiving a monthly fixed allowance, is the allowance should be also included in the calculation of the EPF?

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KL Siew
10/10/2009 20:25:46
I wonder if your company is doing the right thing. You better contact EPF to get a clarification.
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10/10/2009 23:20:45
Well, is this according to EPF rules and regulations that allowance should be included in the calculation of EPF since PCB calculation is also take into consideration of alloawnce. Nowadays employer try to find the loophole to escape these compulsory contribution. Since the IRB department do have "PCB Audit", why not the officer of EPF should be more active in conducting regular examine on employer. This is unfair as like our EPF being robbed!
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