Planit:Employer EPF Contributions Exercise Answer Key
From Planipedia
This case study is specific to financial planning in Malaysia, so has fixed values rather than indices by country. For a similar case study applicable to Singapore, please see Planit:Detailed CPF Contributions Exercise.
Question One:
Nidal and Rasha, want you as their financial planner to include the EPF contributions made by each of their employers. You have collected a bit more information on their cash flow - mainly that their respective salaries are RM 80,000 and RM 95,000.
Answers:
On the Cash Flow Management screen you will add in all incomes, savings, and any tax deductions in order to deduce income taxes and living expenses.
1. Enter Nidal’s $80,000 salary in the Client's Personal Income field.
2. Enter Rasha's $95,000 salary in the Spouse's Personal Income field.
3. Calculate the 11% of his income (RM 8,800) and enter this in the EPF Approved Annual Savings
4. Rasha's EPF Approved Annual Savings will equal 11% of her income, or RM 10,450.
6. Click Calculate so that these values are saved into the Detailed Cash Flow
Continue to the Savings screen using the Next arrow to enter the employer EPF contributions.
- Click Edit beside Nidal’s EPF Retirement Savings
- The employer contribution will be entered in the Matching Amount field. First you must calculate his contribution based on 12% of Nidal’s RM 80,000 income (RM 9,600). So enter $9,600 as the Matching Amount
- Click Save
- Click Edit beside Rasha’s EPF Retirement Savings
- The employer contribution will be entered in the Matching Amount field. First you must calculate his contribution based on 12% of Rasha’s RM 95,000 income (RM 11,400). So enter $11,400 as the Matching Amount
- Click Save
