I’ve Miscalculated EPF Contributions for My Employees — What Now?

Disclaimer: This article should not be considered to be legal advice, and altHR is not liable for any actions taken based on this article.‍

We recently covered the end-to-end of EPF/KWSP contributions in our Complete Guide for Employers, including how to correctly calculate contributions for your employees and company. However, if you’re reading this article instead, you’ve probably already made a mistake (or two) in your company’s EPF calculations. 

It’s not an uncommon occurrence, although it’s important to understand what your next steps should be to rectify the mistake. As such, we’ve broken down today’s guide on what to do if you’ve already mucked up your EPF calculations with underpaid or overpaid contributions. Plus, we’ll also talk about what you’re liable for with regards to the legal aspect of EPF, and how to best resolve the situation. 

But first: if you’ve made a mistake, you should inform your employee of the discrepancy. This is because the Employees Provident Fund Act 1991 provides that employers have a duty to provide an accurate statement of wages to employees with all necessary information. ‍

Situation A: Employer overpays monthly EPF contribution

If you (as the employer) have miscalculated EPF contributions, and made a payment to EPF that is in surplus, you can make an application for a refund from EPF. Here are a couple of things you’ll need to prepare:

• Download Form 14 from the EPF website.
• Fill in the relevant information, including the registration number of your business, as well as other details that will help with your application. 
• You’re also advised to draft a letter to explain the miscalculation. 
• Provide a copy of the employee in question’s IC
• Provide a copy of Form A detailing the miscalculation.
  

Next, you’ll need to submit these documents to your nearest EPF counter.There is a catch, however: refunds are only available for two years after the inaccurate contribution has been made. Do note that operating hours and procedures may differ due to restrictions under Malaysia’s National Recovery Plan. 

Situation B: Employer underpays monthly EPF contribution

If you’ve underpaid for the monthly EPF contributions, you’ll need to rectify the discrepancy with EPF. To do so, you’ll need to make shortage or adjustment payments to the EPF to make up the difference.

Here are a couple of things you’ll need to have: 

• Log into your i-Akaun employer account. 
• On the sidebar, select “Contribution Payment”, and then click “Submit Contributions”.
• Choose the month for which you need to make the shortage payment. 
• Click on “Blank Form A”, then select “Add New Employee”.
• Fill in the necessary details on the form, including the amount of the adjustment payment
• Confirm that the information is accurate. 
• Choose a payment method from the drop-down menu. If you prefer, you can select “Pay Later” and submit payment manually at an EPF counter. 
  

Situation C: Employer makes an error in Form A, but hasn’t made payment yet

If you’ve made an error in your Form A submission, but have yet to submit the (miscalculated) payments, you can still correct the mistake fairly easily. You’ll need to prepare a letter, and fax it to the KWSP contact centre (03-89226222) along with: 

• Your company’s name 
• Company’s EPF number 
• File name 
• Total contribution amount 
• Contact details of the PIC
  

Your Form A should be deleted within 21 working days — following which, you can submit an accurately calculated Form A to EPF. 

Digitalise your payroll (and all HR processes) with altHR

Keeping track of everything can be challenging, particularly for employers and HR professionals in the SME sector. What’s clear is that it’s crucial for Malaysian businesses of all sizes to digitalise their HR processes. Calculating EPF contributions for employees can be an arduous, tedious task for even the most experienced of HR professions — but it doesn’t have to be, with Digi’s super app, altHR.

Besides the automation of various other HR processes, altHR comes with a Payroll module that helps employers keep track of all forms of employee remuneration, while automatically calculating monthly salary deductions. This doesn’t just cover EPF contributions, with SOCSO, EIS, and monthly income tax (MTD/PCB) deductions also included. 

These deductions are also automatically adjusted when employers make changes to monthly remuneration of employees, including incentives, bonuses, and other allowances. This automation frees up time for HR professionals to focus on other important matters to the business, while ensuring that monthly payroll is calculated accurately for all employees. 

The best bit? Everything is seamlessly integrated with the other modules within altHR, such as Documents, and Expenses. For example, once payroll has run for the month, admins have the option to send payslips to the Documents module — all within altHR. 

Additionally, the account can also be set to send automated emails, so employees are notified the moment payslips are available. And finally, digital copies of payslips are always available — to employees via the Documents module, and admins via the Payroll admin panel. 

HR professionals are often faced with daunting, often tedious tasks on a daily basis — tasks that have become even more difficult to handle in light of the ongoing COVID-19 situation. 

But help is available, if you know where to look. Let us streamline your HR processes by managing and automating day-to-day tasks, so you won’t have to worry about things like paperwork, privacy concerns, time-tracking, or onboarding challenges.

Sign up for altHR, the all-in-one digital solution that covers everything from payroll and onboarding, to staff management and providing employees with information kits. You’ve done it the old way long enough.