The government had turned down a proposal that companies suspend EPF contributions to help them survive following losses incurred by the Covid-19 lockdown.
“Reducing EPF contributions for employers will help in job retention. The market is bad,” MEF executive director Shamsuddin Bardan told FMT.Currently, employees contribute 11% to their EPF, while employers put in between 12% and 13% depending on the salary amount. “Private sector wages per month in Malaysia amount to RM27.5 billion,” he said, adding the allocation for the wage subsidy programme was RM13.8 billion for three months.
“Now, it is about sharing the burden, we have to stretch what money we have. If my cash flow allows me to survive for two months, I cannot be incurring the same costs while revenues are affected for more than that or my company will die.” “This way, both employers and employees will have more cash in hand and more importantly, it will help companies retain staff.”Giving the example of a company with 10 employees earning RM3,000 a month, he said EPF contributions alone would cost the company at least RM30,000.
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