Planit:EPF Tax Deductions

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In this Video you will Learn...
How do I enter a tax deduction based on my client's EPF contributions?
• Tax deduction on Cash Flow screen
• 6000 or EPF I Savings, whichever is less
• Employer Account II contributions counted as income and tax deductions

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Life Planning Integrated Planning
Cash Flow Management Screen

Other Related Topics
EPF Contributions Summary Cash Flow Introduction to the Cash Flow Management Screen
How Are Taxes Calculated? Employer Contributions Introduction to the Assets and Liabilities Screen

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Contributions by the employee to the EPF program are tax deductible up to a maximum deduction of 6,000 RM. This deduction also includes reliefs for life insurance premiums.

The way this is being handled in the PlanPlus Planit is that we look at the employee’s contributions to the EPF Retirement Account I (23,100 RM and 13,860 RM as seen above) and include a relief in the tax calculation for the employee’s EPF Retirement Savings amount or 6,000 RM, whichever is less.

One impact of this approach is that there may be occasions where a client or spouse’s income is less than 77,922 RM which is the amount of income required to generate an employee EPF Retirement contribution of 6,000 RM. In this case, if you wish to ensure that the full 6,000 RM relief is included, you would have to enter a manual relief on the detailed cash flow screen for the difference. For example, if the income was only 50,000 RM and the employee EPF Retirement Account I savings were only 3,850, you would enter an additional relief of 1,650 to recognize the contributions to the EPF Account II. (50,000 x 11% x 30% = 1,650).