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System Explanation: Voluntary EPF Tax Relief Limit (RM4,000)

Understand how the RM4,000 EPF tax relief limit works in BrioHR, including mandatory and voluntary EPF, TP1, TP3, and its impact on PCB calculations.

A fix has been implemented to address an issue related to voluntary EPF contributions, where the tax relief limit is shared with mandatory EPF contributions. This update ensures consistent application of the RM4,000 EPF tax relief limit across the system.

EPF Tax Relief Limit

Under Malaysian tax regulations, the maximum tax relief for EPF contributions is RM4,000 per year, inclusive of both:

  • Mandatory EPF contributions

  • Voluntary EPF contributions

How the RM4,000 Limit Is Applied in the System

The RM4,000 tax relief limit is enforced consistently across the following three areas:

  1. Payroll Run – Default EPF Contribution

    • Mandatory EPF contributions calculated during payroll are counted toward the RM4,000 tax relief limit.

  2. TP3 Form : Section D11B – Voluntary EPF Input

    • Voluntary EPF contributions entered under D11B are capped at RM4,000, inclusive of mandatory EPF contributions.

  3. TP1 Item During Payroll

    • Voluntary EPF contributions entered via the TP1 item during payroll are also capped at RM4,000, inclusive of mandatory EPF contributions.

All three inputs share and converge on the same RM4,000 tax relief limit.

TP3 Form Tracking

  • The RM4,000 EPF tax relief limit is also tracked in the TP3 form at the beginning of the year.

  • TP3 serves as the starting reference for accumulated EPF contributions when calculating tax relief.

Impact on PCB (Monthly Tax Deduction)

  • Any reduction in PCB depends on which EPF contribution reaches the RM4,000 limit first:

    • TP3 input

    • Default EPF contribution during payroll

    • TP1 voluntary EPF item

  • Once the RM4,000 limit is reached, additional EPF contributions will no longer reduce PCB.

Effective Date

  • This logic applies from 1 January onwards for each tax year.

Summary

  • EPF tax relief is capped at RM4,000 per year, inclusive of mandatory and voluntary EPF.

  • The limit is shared across Payroll, TP3 : Section D11B, and TP1 inputs.

  • PCB reduction stops once the RM4,000 limit is fully utilised.

  • This fix ensures accurate tax calculations and statutory compliance.

 

Need Assistance?

If you have any questions or require assistance, please reach out to our support team via live chat or email us at support@briohr.com.