Employee contribution rate drops to 9% by 2021, opt-out is required to maintain 11%



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As announced during Budget 2021, the employee contribution rate for the Employee Provident Fund (EPF) will be reduced from 11% to 9% over a 12-month period from January to December 2021. This is to increase potential cash flow up to RM9.3 billion.

Source: RTM

According to the latest EPF statement, the new statutory contribution rate for employees will be applicable to members under the age of 60 who are responsible for the contribution. The contribution rate remains unchanged for members age 60 and over.

He also explained that the new rate of 9% will automatically take effect for the entire year and affects salaries from January 2021 (February 2021 contribution) to December 2021 (January 2022 contribution). In case you missed it, the current reduction of the EPF contribution rate from 11% to 7% under the Economic Stimulus Package will end on December 31, 2020.

For members who wish to retain the normal 11% contribution rate for 2021, they can complete the Borang KWSP 17A (Khas 2021) form which will be available on the EPF website from December 1, 2020. Completed forms must be submitted to the respective employers for online registration via i-Akaun (Employers), which will start from December 14, 2020. Employers should retain the forms received from their employees for their own records.

Also announced during Budget 2021 was the i-Sinar program that allows EPF members who have lost their jobs or suffered reduced income to withdraw money from Account 1. Eligible members can withdraw up to RM60,000 subject to their balance and Current applications for Account 1 will open from mid-December 2020.

The EPF will provide more details on the i-Sinar program this week and members are told not to be fooled by the fake i-Sinar applications circulating online. All requests must be made directly with the EPF through its online portal or through the official i-Akaun KWSP app.

[ SOURCE , IMAGE SOURCE ]

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