What Should I Do If I Miscalculated Employee’s EPF Contributions?

Employees' Provident Fund (EPF), also known as Kumpulan Wang Simpanan Pekerja (KWSP), is a mandatory contribution for Malaysian employees in the private sector as well as those in non-pensionable roles in the public sector. 

As an employer, one of your roles includes submitting EPF contributions on behalf of any individual you've employed to work under a contract of service or apprenticeship. You should ensure that the monthly contributions subtracted from your workers' wages are accurate and transferred to EPF punctually.

 

Nonetheless, there are some unfortunate cases where employers make the mistake of miscalculating an employee's EPF. It's not a rare occurrence, but it's crucial to understand what your following actions should be to sort out the mistake. With this, we've compiled a simple guideline on what can be done if you've underpaid or overpaid your employees' EPF contributions. Also, we'll be talking about what you're responsible for regarding the legal side of EPF and how to rectify the situation better. 

But first and foremost, if you've made a mistake, you should immediately inform your worker about the discrepancy. This is because the Employees Provident Fund Act 1991 states that employers are responsible for giving their workers a correct and accurate statement of salaries with relevant and necessary information. ‍

 

Scenario A - You've overpaid an employee's monthly EPF contribution

If you (as the employer or HR leader) have miscalculated an employee's EPF and made an EPF contribution that is in excess, you may apply for reimbursement from EPF. However, do note that you'll need to prepare several documents as follows:

• Download Form 14 from the KWSP portal.
• Fill in the necessary details, which include your company name, the registration number of your company, and other important information that might help with your application. 
• Preparing an explanation letter containing details of the miscalculation is also recommended. 
• Give a copy of the worker in question's Identification Card (IC).
• Give a copy of Form A explaining the miscalculation.

After you've done the above, you'll need to give these documents to any EPF counter closest to you. Nevertheless, there is a small catch: Refunds and reimbursements are only made available for 2 years after the incorrect EPF contribution has been made. 

 

Scenario B - You've underpaid an employee's monthly EPF contribution

If you've made an underpayment to the monthly EPF contributions, you'll have to remedy the discrepancy with EPF. To address this, you must make the critical shortage or adjustment payments to the EPF to rectify the difference.

Below are a few things and documents you'll need to prepare: 

• Log into your i-Akaun employer account. 
• On the sidebar, choose "Contribution Payment" and click "Submit Contributions".
• Select the month for which you'll need to make the pay adjustments. 
• Click "Blank Form A", then choose "Add New Employee".
• Fill out the relevant and essential information on the Form, such as the amount of the pay adjustments.
• Double-check and confirm that all details filled out are correct and accurate.
• Select your preferred payment method from the drop-down menu. If you'd like, you can also choose "Pay Later" and make the required payment manually at any EPF counter. 

 

Scenario C: I've made a mistake in Form A but have not made the payment yet

If you've made a mistake in your Form A submission but have yet to submit the incorrect payments, you can still rectify the mistake relatively easily. You'll need to draft out a letter and submit it via fax to the KWSP contact centre (03-89226222) with the following information: 

• Your company's name 
• Company's EPF number 
• File name 
• Total contribution amount 
• Contact details of the Person In Charge

In general, once reviewed and approved, your Form A should be removed within 21 working days - in which after that, you may submit another Form A to EPF. Do make sure that it is double-checked and correctly calculated this time round. 

 

Scenario D: What will happen if I've made an overdue or late payment to EPF? 

All Malaysian employers must make the respective EPF payments by the 15th of the following salary month. If the payments were not made during the stated timeline, the contributions would be categorized under outstanding contributions. 

The EPF officer will provide Form KWSP 7 (Form E) and KWSP 8 (Form F), where contribution payments must be made via KWSP 8 (Form F). As mentioned above, payment can be made through Form A for any unpaid outstanding contributions.

Do note that there may be late payment charges, calculated using the lower dividend rate between Simpanan Konvensional and Simpanan Shariah for each year with an additional 1%. In addition, the minimum late payment fee that will be charged is RM 10.

 

For more information on EPF contributions, you may visit the official KWSP site here. 

 

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