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GPMYS: Global Payroll Malaysia Legislative Changes for Tax Year 2020-2021 (Doc ID 2602461.1)

Last updated on DECEMBER 09, 2020

Applies to:

PeopleSoft Enterprise HCM Global Payroll Malaysia - Version 9.2 to 9.2 [Release 9]
Information in this document applies to any platform.


The intent of this document is to describe solutions for problems or questions related to Global Payroll Malaysia Legislative Changes for Tax Year 2020-2021 This solution applies to customers on PeopleSoft Release 9.2. This is a living document and will be updated as new solutions are created; please review thoroughly on a regular basis.

Please see table below for details.

Legislative Change Effective Date Additional Info P1 Patch Fix Target Date Targeted into PUM Image/Patchset

The Malaysian government on 11 October 2019 presented the budget for
Financial Year 2020. Key highlights are:

a) Introduction of a new 30% tax
bracket for individuals, on chargeable income above RM2 million

b) Tax relief for medical expenses expanded to include the cost of fertility treatment.

c) Tax relief for fees paid to approved child care centers and kindergartens is increased from RM1,000 to RM2,000.

 <Bug 30445077>

 PRP 127586


 PRP Posted

REDUCTION OF EPF CONTRIBUTION MYS FROM 01/04/2020 TO 31/12/2020 1st Apr 2020

The Malaysian government has reduced the minimum employee contribution rate
for the Employees¿ Provident Fund (EPF) to 7% starting from April 1 in a bid to cushion the impact of the COVID-19.

<Bug 30974419>

PRP 129856

PRP Posted

PUM Image 34


Minister of Finance tabled the much-anticipated Budget 2021 in parliament, on 7th November 2020.

Tax relief:
Tax relief limits on personal, spouse, and child medical treatment for serious illnesses will be raised from RM6,000 to RM8,000. Also, the tax relief for a full health screening will be increased from RM500 to RM1,000. The tax relief on expenses for medical treatment, special needs, and parental care has also been raised from RM5,000 to RM8,000. The government will expand the scope of tax exemption for the medical treatment covering vaccination expenses such as pneumococcal, influenza, and COVID-19. Tax exemption will be given for the vaccination costs for self, spouses, and children limited to RM1,000.
For those earning between RM50,000 to RM70,000 per year, income tax will be reduced by 1%.
The income tax exemption limit for compensation paid upon job loss will be increased from RM10,000 to RM20,000 for every year of service completed. This is for a period of two assessment years,
The lifestyle tax relief limit has been raised from RM2,500 to RM3,000. This is an RM500 increase specifically for sports-related expenditure. The scope of the relief has also been expanded to include a subscription to the digital newspaper.
Tax relief of up to RM8,000 for National Education Savings Scheme (SSPN) net savings will be implemented until the assessment year 2022 to encourage parents to save for the costs of their children¿s higher education fees.
Employee's Provident Fund (EPF)/ KWSP
Employee's EPF contribution is reduced from 11% to 9% for 12 months (1 year) beginning in January 2021.
The government has announced the targeted facility for the withdrawal of EPF savings as much as RM500 per month, amounting up to RM6,000 for 12 months from Account 1. Eligible members can apply for this beginning in January 2021.
EPF to allow contributors to withdraw from Account 2 to purchase insurance.
RM24 bill for the Social Security Organisation (SOCSO) employment injury scheme. Delivery riders will be included in this scheme.
RM3,000 tax exemptions for contributors to private retirement schemes.


More information on these legislative announcements is now available on My Oracle Support under <Document 2645132.1>

<Bug 32129516>

PRP 206815

PRP Posted

PUM Image 37



 You need to apply the critical patches / GP Updates whenever their legislative fixes are posted


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