Breach of Offer on Provident Fund (PF)

Hi,
I am from India and moved to KL under international transfer from my Organization 2 months ago as an Expat.

While I accepted the offer it was confirmed in an E-mail that I would be getting additional 12% PF by employer over and above my CTC.

However, last week I got a surprise out of life....the HR told me it was a 'human error' and was wrongly committed to you, as my company in KL does not provide PF for expats and we asked them if they are going to compensate the 12% in any other form, the answer was No.

Like me there are other few employees are impacted, as the PF was considered one of the additonal income for us + tax savings for us.

Has anyone on this group experienced similar kind of issue and what should I do to get it compensated?

Nothing to do. You need your company to agree to registering you with the EPF and if they don't (OR can't) do so, then you can't do it yourself.

Tax savings? Not sure what you were hoping for but you will be deducted 28% flat rate if salaried in Malaysia until you are tax resident (if on an Employment Pass).

Secondments frequently use the Professional Visit Pass system where you remain salaried in home country and continue to pay tax there. Living expenses are usually provided in some way.

I guess you all have grounds to request to cancel the secondment. It is true that if a person continues to be paid in the home country, it is impossible to contribute to EPF in Malaysia, as it is based on Malaysian income.

You have not given details of your immigration status so it is unclear exactly what has happened.

Thanks Gravitas for your response.

I moved here under employment pass and I understand I will pay tax of 28% for first 6 months then I will move to resident tax payer. If I have a PF enrolled by my organization (as promised by them) I should be getting some tax rebates when I do tax filing, am I right?

However, in my case I should be getting 12% PF contribution by the employer as committed before I accept this Offer,  which am missing today. Its more like me and my fellow collegues have been ditched by the HRs wrong commitment.

I lost the complete faith in the internal HR system. What should I do to get the PF?

There is no employment law which forces an employer to contribute to the EPF for a non-Malaysian - it is optional. But according to some sources, it is possible for you to open an EPF account yourself -  notice to contribute using Form KWSP 16B and then registering as an EPF member using Form KWSP 3. 

But do check, as I did read somewhere that interest is not paid to foreigners with EPF accounts that are withdrawn when they leave the country.  So your worries might actually be less than you think. But worth doing if interest is paid, as its about 6% theses days.

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