EPF Calculation For Two Payroll Cycles in a Month

Modified on Thu, 6 Nov at 4:33 PM

When your company runs both MidMonth and Month End payroll cycles, the EPF contribution is calculated based on the total EPF Base for the entire month and not per cycle.

How It Works

Ensure “Enable Statutory Consolidation” setting is turned OFF in the Payroll Policy.

The EPF amount for the MidMonth cycle will be calculated first.
The system adds up both MidMonth and Month End payroll amounts.
It refers to the EPF Contribution Table to determine the total EPF contribution for the month.
The balance EPF amount will then be assigned to the Month End cycle.

Example

Cycle	Payroll Amount (RM)
MidMonth	3,500
Month End	4,700
EPF Base (RM)	8,200

EPF Contribution Table for reference:

Amount of Wages For The Month (RM)	By Employer (RM)	By Employee (RM)	Total (RM)
3,480.01 – 3,500.00	455.00	385.00	840.00
4,680.01 – 4,700.00	611.00	517.00	1,128.00
8,100.01 – 8,200.00	984.00	902.00	1,886.00

Please refer to the official EPF Act 1991 Third Schedule for the latest rates or any updates made by EPF.

MidMonth Payroll

In this example, a bonus payment of RM3,500 is processed during the MidMonth payroll.

Since this is considered an ad-hoc payment not exceeding RM5,000, the EPF contribution is calculated based on the EPF Contribution Table (Jadual 3).

EPF for MidMonth (RM3,500):

Employer: RM455
Employee: RM385

Month End Payroll

During the Month End payroll, the system combines the MidMonth and Month End amounts, resulting in total monthly earnings of RM8,200.

According to EPF guidelines, when an employee’s salary below RM5,000 is combined with other payments (e.g. bonuses,allowance) and the total exceeds RM5,000, the employer contribution rate remains at 13%.

In this case, the contribution is not based on Jadual 3, but calculated directly at 13% of total earnings:

Employer: RM8,200 × 13% = RM1,066
Employee: RM8,200 × 11% = RM902

EPF Breakdown:

Employer EPF from MidMonth = RM455
Employer balance for Month-End = RM1,066 – RM455 = RM611
Employee EPF from MidMonth = RM385
Employee balance for Month-End = RM902 – RM385 = RM517

The system will automatically allocate the remaining EPF balance to the Month-End payroll to ensure the total monthly contribution matches the correct amount.

When “Enable Statutory Consolidation” Is Turned ON

If Statutory Consolidation is enabled, statutory contributions (EPF, SOCSO, EIS, etc.) will be consolidated and calculated in the last payroll cycle set in the Payroll Policy.

Note: This setting only affects when the contribution is calculated, not the total EPF amount for the month.

We hope this explanation clarifies the matter. If you require additional assistance, do not hesitate to contact our support team.