Asking for Increment in employee EPF contribution or basic salary or allowance?

Most people when they want to ask for a raise, we will be thinking of increment in terms of basic salary or additional allowance. For employee who are not paying much of the income tax to LHDN, whether increment in these two forms does not matter much. Employee with higher salary and tax bracket might be finding that the increment will transform into the higher tax bracket, thus higher amount of deduction for LHDN (seems like not much point asking for a raise).

Another way of increment that most people not aware of is getting an increase via higher percentage of employer EPF (KWSP) contribution monthly. Tax savvy employee will find this is a good way to escape from tax as the employer's contribution is not subjected to income tax calculation.

The statutory requirement for employer contribution is as the following

13% contribution of the monthly wages of RM 5,000 and below; 12% contribution of monthly salary above RM5,000

Companies in Malaysia are encouraged to increase the contribution beyond the statutory requirement where any extra contributions is tax deductible up to 19% of the employee’s salary.

Both increment in terms of salary and allowance will however allow more usable cash in the bank while the EPF contribution increment will pile the cash in the retirement. Hence, it is up to you, which is more important. 

MALAYSIA PROPERTY BULK PURCHASE GROUP

 PROPERTY BULK PURCHASE GROUP

The truth in property.

Walk in to the sales gallery, looking for the next best deal nearby. After visiting the showroom, the sales agent will show you all the calculations where you see how much you need to prepare for downpayment, MOT, Loan Legal Fees, progressive payments and monthly commitment. 

You are knowledgeable after doing some read up before this. You will ask for any rebates, any cash back? How much is it during launching? What are the early bird rebates? How much are phase 1 buying? How much phase 1 buyers are given rebates for phase 2?

Definitely you will feel like missing out. Then you need to think if you can afford to buy at a slightly premium price. But the agent will tell you, next time, it will be worth this this this, rental rate will be this this this, property price will rise definitely, for your own stay it's okay one. Buy now or never. Plus you see the stickers on the units are getting more and more.

Look at the facts in the chart below.