Can an Employee in Malaysia Have Two Employments and Contribute to EPF and SOCSO for Both?
by Chloe Chan
Apr 16, 2023
at 5:18 PM
In Malaysia, having more than one job at the same time is common in other words two employments. Some individuals may work multiple jobs to increase their income or gain more work experience. However, this may raise questions about whether employees can contribute to the Employees Provident Fund (EPF) and Social Security Organization (SOCSO) for both employment. This article will explore the laws and regulations regarding having two employments and contributing to EPF and SOCSO for both.
Legal Provisions for Multiple Employments
According to Section 24 of the EPF Act 1991, an employee with more than one employment can contribute to the EPF for both employments, subject to the maximum statutory contribution. The employer is required to deduct the employee's EPF contribution based on the total income earned from all employment, and the employee's combined contribution cannot exceed the maximum amount allowed by the law.
Similarly, under Section 2 of the Employees' Social Security Act 1969, an employee with more than one employment can contribute to SOCSO for both employments, subject to the maximum wages. The employer is required to deduct the employee's SOCSO contribution based on the total wages earned from all employment, and the employee's combined contribution cannot exceed the maximum amount allowed by the law.
Maximum Contribution Limits
The maximum EPF contribution rate for both the employer and employee is currently set at 11% of the employee's monthly salary, with a maximum of RM 5,000 per month. This means that if an employee earns RM 10,000 per month from two employments, the employer is required to deduct EPF contributions of RM 1,100 (11% of RM 10,000) for both employments, and the employee's total EPF contribution for both employments cannot exceed RM 1,100.
On the other hand, the maximum SOCSO contribution rate for both the employer and employee is currently set at 1.75% of the employee's monthly wages, with a maximum of RM 5,000 per month. This means that if an employee earns RM 10,000 per month from two employments, the employer is required to deduct SOCSO contributions of RM 350 (1.75% of RM 10,000) for both employments, and the employee's total SOCSO contribution for both employments cannot exceed RM 350.
Reporting Multiple Employments
It is important for employees to inform their employers of their multiple employments to ensure accurate EPF and SOCSO contributions. The employer is required to deduct EPF and SOCSO contributions based on the employee's total income and wages earned from all employment. Therefore, if employees fail to report their other employment(s) or provide inaccurate information, their EPF and SOCSO contributions may not be calculated correctly.
Benefits of Contributing to EPF and SOCSO for Multiple Employments
Contributing to EPF and SOCSO for multiple employments can provide employees with several benefits. Firstly, EPF contributions can help employees save for their retirement. In contrast, SOCSO contributions can provide social security protection in accidents or disabilities. Secondly, contributing to EPF and SOCSO for multiple employments can increase the employee's total contributions and benefits and their eligibility for higher benefits such as disability or death benefits.
Keynote
In conclusion, employees in Malaysia can have multiple employments and contribute to EPF and SOCSO for both, subject to the maximum contribution limits set by law. It is important for employees to inform their employers of their multiple employments and provide accurate information to ensure that the correct EPF and SOCSO contributions are made. Contributing to EPF and SOCSO for multiple employments can provide several benefits, such as retirement savings and social security protection, increasing the employee's total contributions and eligibility for higher benefits.
FAQs
Q: Is it legal for an employee in Malaysia to have two employments at the same time?
A: Yes, it is legal for an employee in Malaysia to have two employments at the same time, as long as there is no conflict of interest and both employers have given their approval.
Q: Can an employee contribute to EPF and SOCSO for both employments?
A: Yes, an employee can contribute to EPF and SOCSO for both employments as long as both employers are registered with these organizations.
Q: How does contributing to EPF and SOCSO for two employments affect an employee's contributions?
A: Contributing to EPF and SOCSO for two employments may result in a higher overall contribution amount, which can provide additional benefits to the employee such as a higher retirement fund and better social security coverage.
Q: Are there any limitations or regulations to consider when having two employments in Malaysia?
A: Yes, there are limitations and regulations to consider, such as the need for approval from both employers, ensuring that there is no conflict of interest, and adhering to the terms and conditions of both employment contracts.
Q: How can an employee manage two employments and their contributions to EPF and SOCSO?
A: An employee should keep track of their contribution amounts and ensure that they are not exceeding the contribution limits set by EPF and SOCSO. They can also seek advice from their employers and relevant authorities to ensure compliance with regulations.
