Setting Up Employee Provident Fund Contributions

This chapter provides an overview of the Employee Provident Fund (EPF) contribution process and discusses how to:

Set up employer data.
Set up employee EPF data.
Report EPF data.

Note. The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Malaysia. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll PeopleBook.

Understanding the EPF Contribution Process

This section discusses:

EPF contribution calculation.
Gross salary for EPF contributions.
Employee EPF contribution limits.
Delivered EPF elements.

EPF Contribution Calculation

To calculate EPF contributions, the system:

Defines gross salary for EPF contributions and divides them into different income types.
Rounds EPF salaries.
Determines employee and employer voluntary and statutory EPF contribution limits.
Divides the employee contributions into pretax and post-tax deductions.

Gross Salary for EPF Contributions

Global Payroll for Malaysia uses the accumulator EPF AC GROSS to define the gross salary. View the accumulator's definition to see its members.

It may be necessary to include earnings from previous years. For example, bonus payments are subject to EPF contributions but are often paid retroactively. The reporting requirement is to identify the payment and its EPF contributions. The system uses accumulators to accomplish this.

When defining gross salary for EPF, the system splits the payee's EPF income into three parts: regular EPF income (using EPF AC GROSS), current year bonuses (using ERN AC CYBON), and previous year bonuses (using EPF AC PY INCOME).

Employee EPF Contribution Limits

Before determining contribution limits, the system rounds the payee's income. For incomes lower than 5000 MYR, the system rounds in increments of 20 MYR. For incomes greater than 5000 MYR, the system rounds in increments of 100 MYR.

To determine the contribution limit, the system uses element EPF VR EE RATE to apply a flat contribution rate of 11 percent for employees. For employers, the system uses EPF VR ER RATE to apply a flat contribution rate of 12 percent. The system also applies voluntary contribution percentages to this income.

Delivered EPF Elements

Twelve EPF deduction elements are delivered for Malaysia:

Delivered EPF Deduction Element Name	Description
EPF DD AN VO	Voluntry EPF Contrb on ANN Inc
EPF DD ANN	EPF Contrb on Annual Income
EPF DD EE PY	Employee EPF PY Contribution
EPF DD EE TO	Total Employee Contribution
EPF DD EE VO	Voluntary EPF Contr Employee
EPF DD EEREG	Regular EPF Employee Deduction
EPF DD ER	EPF Employer Deduction
EPF DD ER VO	Voluntary EPF Cont ER
EPF DD ERANV	EPF Annual Contrb ER Vol
EPF DD POSTX	EPF Post Tax Deduction
EPF DD PRETX	EPF Pre Tax Deduction
EPF EEREG VO	Regular EE EPF Voluntary contr

Global Payroll for Malaysia uses an array, formulas, variables, and deductions to:

Read payee EPF data.

Array EPF AR EEDATA stores the information that is entered on the Maintain EPF Payee Data page.
Calculate EPF gross earnings.

The accumulators EPF AC GROSS, ERN AC CYBON, and EPF AC PY INCOME define the three parts of the EPF gross salary.
Determine whether the payee is eligible for EPF contributions.

The formula EPF FM CHK checks the effective status to ensure that EPF deductions apply.
Determine whether the payee's income meets the EPF contribution minimum.

The formula EPF FM BS checks that the EPF accumulated monthly gross, which is the accumulator containing the month's applicable EPF earnings, meets the EPF minimums, and it applies the necessary rounding rules.
Calculate the employee and employer contribution.

The formula EPF FM CALCULATION uses the payee's EPF earnings, employee and employer voluntary contribution amounts, tax limits, and EPF contribution rates to calculate the employer and employee deductions. This formula stores the deduction amounts in the following variables: EPF VR PRETX (EPF Pre Tax deduction), EPF VR POSTX (EPF Deduction Post Tax), and EPF VR ER GROSS (Employer Contribution Gross). The EPF pretax deduction is also grouped into the three EPF classes, which match the three tax classes.
Create deduction elements based on the calculated contributions.

The deduction elements EPF DD PRETX (EPF Pre Tax Deduction), EPF DD POSTX (EPF Post Tax Deduction), and EPF DD ER (EPF Employer Deduction) hold the EPF contribution amounts.

Setting Up Employer Data

To set up employer data, use the EPF Number Table MYS (GPMY_EPF_TBL) and Organization Numbers MYS (GPMY_ORG_NBR) components.

This section discusses how to:

Enter reference number contact information.
Associate an EPF number with an organizational link.

Pages Used to Set Up Employer Data

Page Name	Object Name	Navigation	Usage
EPF Table	GPMY_EPF_TBL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Pensions, EPF Number Table MYS, EPF Table	Maintain employer contact information for EPF reporting.
EPF Data	GPMY_EPF_ORG_NBR	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Organization Numbers MYS, EPF Data	Associate an EPF number with an organizational unit, such as a company, pay group, location, establishment, or department.
Org Link EPF Sec Page MYS	GPMY_EPF_ORG_SEC	Click the Details button on the EPF Data page.	View employer details that are associated with the EPF number.

Entering Reference Number Contact Information

Access the EPF Table page.

Statutory Region

Enter the statutory region. This region is reported on the following forms: EPF Form 6, SOCSO Form 8A, SOCSO Form 8B, CP39 Monthly Statement of Tax Deductions - Electronic form, Employee Tax Refund Form - Malaysian CP159A/PCB2(II).

Responsible ID

Enter the employee ID of the organization's EPF contact.

Name

Enter the name of the contact person of the company for EPF inquiries. This name appears on all EPF reports.

Job Title

Enter the job title of the company contact for EPF inquiries. This information appears on all EPF reports.

Telephone and Fax

Enter the telephone and fax number of the company contact for EPF inquiries. This information appears on all EPF reports.

Associating an EPF Number with an Organizational Link

Access the EPF Data page.

Organizational Link Option

Select an organizational link. Values are Company, Pay Group, Location, Establishment, and Department.

Load All Units

Click to insert a list of all possible organizational units into the organization link list. You can then specify the EPF Number for each unit.

Effective Date and Status

Enter the effective date and status of the organization link. If the organizational link option changes, all the organizational units are deleted and all past organizational link options become inactive.

Details

Click the Details button to view the EPF Number Details page, which displays the employer details that are associated with the EPF number.

Setting Up Employee EPF Data

This section discusses how to enter employee EPF data.

Page Used to Enter Employee EPF Data

Page Name	Object Name	Navigation	Usage
Maintain EPF Payee Data	GPMY_EPF_PYE	Global Payroll & Absence Mgmt, Payee Data, Pension Information, Maintain EPF MYS, Maintain EPF Payee Data	Associate an employer number with an employee, apply the foreign worker rate, set up voluntary contributions, and assign beneficiaries.

Entering Employee EPF Data

Access the Maintain EPF Payee Data page.

Identification Card Indicator

Select the type of ID Card number. Values are Old, New. and N/A. This is the ID card number that is used in the statutory EPF reports.

Employer Number

Select the employer's EPF number.

Membership Number

Enter the employee membership number.

Initials

Enter the employee's initials. After the payee is enrolled in the EPF, the organization uses these initials for reporting purposes.

Contribution Type

Specify who makes the contribution. Values are Employer and Payee, Payee only, and Employer only.

Use Foreign Worker Rate

Select this option to apply the foreign worker rate. This rate is stored in the variable EPF VR ER NON CTZN (currently 5%)

Payee Voluntary Contribution

Enter the percentage or amount of the EPF contribution that exceeds the statutory contribution.

Employer Voluntary Contribution

Enter the percentage or amount of the voluntary contribution. A collective employer percentage can be defined through the bracket EPF BR ERVOLPCT. If a voluntary employer percentage is entered here (at the payee level) it overrides the collective employee percentage.

Beneficiaries

Enter beneficiaries. The values that are available in the ID field come from the Dependents page. Enter the appropriate percentage in the Percentage field.

Reporting EPF Data

Global Payroll for Malaysia enables you to create a report summarizing EPF contributions as well as the EPF Form A, which is required by the Inland Revenue Board.

Statutory Region	Enter the statutory region. This region is reported on the following forms: EPF Form 6, SOCSO Form 8A, SOCSO Form 8B, CP39 Monthly Statement of Tax Deductions - Electronic form, Employee Tax Refund Form - Malaysian CP159A/PCB2(II).
Responsible ID	Enter the employee ID of the organization's EPF contact.
Name	Enter the name of the contact person of the company for EPF inquiries. This name appears on all EPF reports.
Job Title	Enter the job title of the company contact for EPF inquiries. This information appears on all EPF reports.
Telephone and Fax	Enter the telephone and fax number of the company contact for EPF inquiries. This information appears on all EPF reports.

Organizational Link Option	Select an organizational link. Values are Company, Pay Group, Location, Establishment, and Department.
Load All Units	Click to insert a list of all possible organizational units into the organization link list. You can then specify the EPF Number for each unit.
Effective Date and Status	Enter the effective date and status of the organization link. If the organizational link option changes, all the organizational units are deleted and all past organizational link options become inactive.
Details	Click the Details button to view the EPF Number Details page, which displays the employer details that are associated with the EPF number.

Identification Card Indicator	Select the type of ID Card number. Values are Old, New. and N/A. This is the ID card number that is used in the statutory EPF reports.
Employer Number	Select the employer's EPF number.
Membership Number	Enter the employee membership number.
Initials	Enter the employee's initials. After the payee is enrolled in the EPF, the organization uses these initials for reporting purposes.
Contribution Type	Specify who makes the contribution. Values are Employer and Payee, Payee only, and Employer only.
Use Foreign Worker Rate	Select this option to apply the foreign worker rate. This rate is stored in the variable EPF VR ER NON CTZN (currently 5%)
Payee Voluntary Contribution	Enter the percentage or amount of the EPF contribution that exceeds the statutory contribution.
Employer Voluntary Contribution	Enter the percentage or amount of the voluntary contribution. A collective employer percentage can be defined through the bracket EPF BR ERVOLPCT. If a voluntary employer percentage is entered here (at the payee level) it overrides the collective employee percentage.
Beneficiaries	Enter beneficiaries. The values that are available in the ID field come from the Dependents page. Enter the appropriate percentage in the Percentage field.