Kreatif Sdn Bhd made the following contributions for the accounting period ending on 31 December 2013:
(a) EPF = 12% of employees’ remuneration and
(b) PRS funds = 7% of employees’ remuneration
Total employees remuneration for the period was RM300,000. Allowable deduction to the company under subsection 34(4) of the Income Tax Act is RM57,000 (RM300,000 x 19%).
(1) Employer contribution rate at 12% of employees remuneration.
(2) Contributions made by employers on behalf of their employees are allowable as a deduction under subsection 34(4) of the Income Tax Act subject to a maximum of 19% of the employees’ remuneration.
* Source: Inland Revenue Board (Private Retirement Scheme – Public Ruling No. 9/2014 Section 5.2).