Assume monthly basic salary is RM4000.
- If your monthly EPF contribution is 11% ( RM440 ), taxable income = RM3560, income tax payable = RM77.
- If your monthly EPF contribution is 8% ( RM320 ), taxable income = RM3680, income tax payable = RM109.
Conclusion : If you choose to contribute 8%, you will end up paying more income tax to the go~ment,
which will make the go~ment richer. Finance Minister Najib said this measure is meant
to boost up the slow-down market, but from this example we see that the money does not
go into the market. Instead the money goes direct into the go~ment's pocket through
the greater amount of income tax that we will have to pay. Obviously this measure does not
help the market at all. Do we still want this kind of go~ment that doesn't have the best interest
of the people in mind?
Download EPF Forms
here
Tax payable is base on total income........
Very good analysis Jason, i stop paying EPF 20 years ago......
Good work, Jason......just show how good (or bad) a Finance Minister we have!
Can I give an alternative view?
Jason, you are right!
But there is a limitation to how much you can deduct from your EPF - If I am not mistaken, contribution deduction is up to RM2000 or 3000 (whether it's EPF or Insurance Life saving policy). Hopefully I tak salah.. coz last year I didn't fill my income tax form but my wife. So can someone verify it?
So, if you contribute less, it will also means that you can put ur money else where. If you don't have other form investment, then maintain it at 11%. You will save on income tax. But if you have other forms of saving which enables you to deduct from Income tax, then contributing 8% sounds like a good idea.
My opinion, seriously I don't really trust EPF... happy happy they simply invest to bailout company. Now they pump money into their so called ValueCap... and yet... I seriously doubt we will get our high return. So might as well have money in our pocket, then simply let it burnt by the go~ment.
Plus, the lower income group will appreciate the lower contribution. We may say, what does the 30 or 40 extra can do? Well, for those that are having their usual starbucks or coffeebean (i will not mean a lot), but for the poor, it does help. Everything is expensive but salary tak naik.
keluar pocket kiri masuk pocket kanan
I think you guys are still ok. me and Garo lagi best becoz we need to pay a 'pre income tax' on Jan each year base on our last year tax and will be justified again on July whether to pay more or to get our refund back from our Jan Pre Tax payment.....hahaa.......
actually, 'high income group' doesn't have extra income tax but low income grouop has to.
RM6000 taxable income deductable for insurance policy + EPF.
high income group: as they will always hit more than RM6000 regardless 8% or 11% EPF. therefore, same tax they pay.
low income group: if 8%, EPF+insurance = RM5000, if 11%, EPF+ insurance = RM6000. Extra RM1000 ( RM6000-RM5000) will be taxable.
(11-19-2008 05:31 PM)john998 Wrote: [ -> ]actually, 'high income group' doesn't have extra income tax but low income grouop has to.
RM6000 taxable income deductable for insurance policy + EPF.
high income group: as they will always hit more than RM6000 regardless 8% or 11% EPF. therefore, same tax they pay.
low income group: if 8%, EPF+insurance = RM5000, if 11%, EPF+ insurance = RM6000. Extra RM1000 ( RM6000-RM5000) will be taxable.
conclusion? if you high income, take the extra 3% to spend, if low income then stick to 11%, at the same time you are poorer to due to inflation?
(11-19-2008 06:42 PM)makkor Wrote: [ -> ] (11-19-2008 05:31 PM)john998 Wrote: [ -> ]actually, 'high income group' doesn't have extra income tax but low income grouop has to.
RM6000 taxable income deductable for insurance policy + EPF.
high income group: as they will always hit more than RM6000 regardless 8% or 11% EPF. therefore, same tax they pay.
low income group: if 8%, EPF+insurance = RM5000, if 11%, EPF+ insurance = RM6000. Extra RM1000 ( RM6000-RM5000) will be taxable.
conclusion? if you high income, take the extra 3% to spend, if low income then stick to 11%, at the same time you are poorer to due to inflation?
i think just take out the 3% and don't spend. put it in fund or blue chips. I think it will beat lousy EPF return in long terms.