Malaysia’s government has made a number of adjustments to its tax and social security infrastructure in the past 10 months to help employers and employees cope with the financial impact of the coronavirus crisis. Those adjustments include a reduction in EPF contributions until the end of December 2021 and an increase in EPF withdrawal thresholds. In the 2021 budget, the government also introduced hiring incentives, tax relief measures, and a wage subsidy program.
In 2021, the government is making further adjustments to the EPF and to the PTPTN loan scheme. Employers and taxpayers in Malaysia should understand the latest changes and how they will be affected.
EPF Payment Dates
The Employee Provident Fund is Malaysia’s statutory retirement fund to which all employees and employers make contributions. At the height of the coronavirus crisis, in order to help businesses and taxpayers cope with the financial consequences of lockdown restrictions, the Malaysian government extended the monthly payment date for employers to make their EPF contributions from the 15th to the 30th of every month.
On 30 December 2020, the Malaysian government adjusted the EPF contribution payment date, reverting back to the date in place prior to the coronavirus measures.
In 2021, the EPF contribution payment date is the 15th of every month.
EPF contributions can be made on the EPF website using the employer portal. Payments can also be made via the internet, or by using authorised banks.
PTPTN Loan Extension
The Perbadanan Tabung Pendidikan Tinggi Nasional (National Higher Education Fund) loan is available to students across Malaysia to help them to gain tertiary education qualifications. Loan applicants must meet certain eligibility criteria and apply for their loan through the Ministry of Education.
In response to the coronavirus crisis, the Malaysian government has announced that certain categories of PTPTN borrowers will be able to defer their loan repayments for 3 months. The loan extension is available to:
- Borrowers who lost their source of income (i.e. lost their jobs) during the coronavirus pandemic.
- Borrowers who have had their income reduced during the coronavirus pandemic.
The PTPTN loan extension was made available on 5 January and borrowers can apply for their extension through the fund’s official portal. Borrowers will be notified of approval within 3 working days and their 3-month loan extensions will commence in the same month as that approval.