All payments that are meant to be wages are liable for EPF contribution. These include:
Payment for un-utilized annual or medical leave
Arrears of wages
Wages for maternity leave
Wages for study leave
Wages for half day leave
Other payments under services contract or otherwise
In HReasily, any pay item(s) labelled as 'Bonus' will not reduce the employer contribution to reduce to 12% in the event the bonus bumps employee's monthly wages above the RM5,000 threshold.
Among the payments that are exempted from EPF contribution include:
Retrenchment, temporary lay-off or termination benefits
Any traveling allowance or the value of any travel concession*
Payment in lieu of notice of termination of service
Other incidental allowances which are related to ‘traveling’ such as transport allowance, outstation allowance, food allowance, car allowance, handphone allowance are subject to EPF contributions UNLESS the said payments are reimbursement in nature.
Please refer to this page for more details.