Well, if you haven't lived in the jungles for last few months, you should know that the Gov has proposed to lower everyone's EPF contribution of 11% to 8%, so that you and I could have some 'extra income' derived from there. What the Gov didn't you, by means of that lower EPF contribution, that you might hit a higher income tax bracket!
Smart and sleazy ain't it?
Let' assume your monthly basic salary is RM4,000.
If your monthly EPF contribution is 11% (RM440), then your taxable income = RM3560, and income tax payable = RM77.
If your monthly EPF contribution is 8% (RM320), then your taxable income = RM3680, and income tax payable = RM109.
If you choose to contribute 8%, you will end up paying more income tax to the government which will make the Gov richer.
So, you might think that you have more money in your pockets, well, part of that pocket actually belongs to the Gov! This is the Gov way to establish a WIN-WIN. Ain't that great?
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