The 15% incentive sipeh attractive. will bank in 2k for my wife,
2023 - increase from 250 to 300.
What are the benefit of i-saraan?
1. Eligible for 15% government incentive
Members aged below 60 years old who made a self-contribution through the i-Saraan scheme shall receive a government contribution of 15% of the amount contributed. This government incentive is subjected to a maximum of RM250 a year.
Top i-Saraan benefits is 15% matching government contribution.
i-Saraan incentive: 15% matching government contribution with a maximum of RM250 in a year (RM300 in a year for 2023)
For example, if a member made his first i-Saraan contribution of RM1,000 for the year 2018, the member shall receive an RM150 contribution from the government for the year 2018.
If the same member made his first contribution of RM10,000 instead of RM1,000 for the year 2018, the member shall receive a maximum RM250 incentive from the government for the year 2018.
And if that member contributed RM1,667 for the year 2018, he shall receive the full RM250 incentive for the year 2018.
The rate of 15% took effect in 2018 and the government contribution incentive has been extended to the year 2022.
For the year 2023, EPF shared that once again, the government has extended the 15% matching incentive with an increment of up to RM300 matching incentive.
For any further extension, I’ll update this post. Alternatively, you may refer to the EPF website for the latest updates.
2. Enjoy Annual EPF dividends
Savings under the i-Saraan scheme shall receive EPF annual dividend payments credited to their account up until the member reaches age 100.
As announced in 2023, the EPF dividends for 2022 are at 5.35% for Simpanan Konvensional and 4.75% for Simpanan Shariah. These dividends are considered very attractive.
And for your information, EPF guarantees a dividend of 2.5% per year for its member’s savings.
3. Eligible for LHDN income tax relief
The third benefit would be the eligibility for income tax relief.
For the assessment year 2022, the tax relief for EPF contribution and other approved schemes is up to RM4,000.
I believe many self-employed individuals in Malaysia are not aware that they can register as EPF members and start contributing through EPF i-Saraan scheme.
Thus, they missed out on the opportunity to maximize their income tax saving through EPF contributions.
4. Eligible for EPF death benefit of RM2,500
In 2019, I also contacted EPF through their website to ask whether EPF member under the i-Saraan scheme is eligible for the death benefit of RM2,500.
The answer is “Yes”, provided they fulfill the terms and conditions of EPF withdrawal.
5. Flexible EPF contribution
As stated on the EPF website, another benefit of the i-Saraan scheme is the flexibility to make contributions in terms of:
contribution amount
the member may make any contribution amount within his or her own financial ability.
contribution frequency
the member may make the contribution anytime according to his or her own timing and schedule.
The flexibility offered is a great advantage for self-employed as they can contribute according to their own financial capabilities.
6. To improve your credit score
Lastly, contributing to EPF i-Saraan may also improve your credit score.
Perhaps in the future, you may want to apply for loans such as housing loans. The regular EPF contributions which you have made throughout the years are a sign that you are a committed and responsible person. Thus, this may make the loan approval smoother.
Personally, I had come across a credit card company that uses EPF statements to support my credit card application.
So, making regular EPF contributions may boost your credit score.
Source: EPF i-Saraan 2023: All You Need To Know • The Money Magnet (the-money-magnet.com)