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Sales Commission & EFP/PBC Deduction

Resh07
Member
Tue, 30 Jan 2018 07:51:48 PM  (Last updated: Tue, 30 Jan 2018 08:09:03 PM)

Hello there,

I'm not sure if this is the right forum to discuss but I would like to seek some expert guidance particularly on sales commission deductibles. As SME, we have been following all guidelines concerning our sales personnel including KSWP and PCB deductions but a few of our sale staffs have raised concerns that commissions should be paid to them in full without deductions. According to them, their previous employers used to process sales commission payouts separately without any deduction. As much as we are obliged to adhere to all standard policies set by relevant authorities we are equally concerned over the wellbeing of our employees and we take their feedback seriously. Is there any potential workout for this matter? Your suggestions or recommendations highly appreciated. Thank you! 

Gon
Contributor
Tue, 30 Jan 2018 08:09:03 PM

EPF wage definition : 

All remuneration in money due to an employee under his contract of service or apprenticeship whether it was agreed to be paid monthly, weekly, daily or otherwise.

Among the payments that are liable for EPF contribution:

Salary
Payment for unutilised annual or medical leave
Bonus
Allowance
Commission
Incentive
Arrears of wages
Wages for maternity leave
Wages for study leave
Wages for half day leave
Other payments under services contract or otherwise

View: Section 2: Interpretation

Among the payments not liable for EPF contribution:

Service charges
Overtime payment
Gratuity
Retirement benefits
Retrenchment, temporary and lay-off termination benefits
Any travelling allowance or the value of any travelling concession
Payment in lieu of notice of termination of employment
Director's fee

The above list is not exhaustive. Should require further clarification, please contact our EPF Contact Management Centre at 03-89226000, enquiry or any EPF Office.

and yes, you are doing it right, commission is subject to EPF and income tax. It is previous company mistake wrongdoing for not contributing to EPF.

You can tell you employee this, you are actually getting more money in your pocket : Reason : 89% (via salary) + 11% (Employee contribution to EPF) + 12/13%% (Employer contribution). which total will be 112% or 113% 

While if not contributing to EPF, you are only getting 100% of commission

So please ask them why they did not want employer put extra $$ into your EPF. They are salesman and for sure they want the money 

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