By AFIQ AZIZ / Pic By MUHD AMIN NAHARUL

THE government has reduced the minimum statutory contribution rate for employees from 11% to 7% to spur the economy impacted by the deadly coronavirus outbreak.

According to the Employees’ Provident Fund (EPF), the rate will be effective this April.

“The new rate will be effective starting April 1, 2020, until the end of the year and affects members below age 60. For those aged 60 and above, the employees’ share of the contribution rate will remain at 0%,” it said.

The stimulus package was announced by interim Prime Minister Tun Dr Mahathir Mohamad in Putrajaya yesterday.

The EPF said employees could also opt to remain at their current contribution of 11% by completing a special form available on its website which must be presented to employers to be submitted to the EPF.

Currently, employees contribute 11% of their salary to the fund, while employers must put in a minimum of 12% for salaries more than RM5,000 and 13% for salaries lower than that.

For employees above the age of 60, the minimum employers’ share of EPF statutory contribution rate is 4%, while the employees’ share of the contribution rate is 0%.

“Employers are required to ensure the correct amount is deducted from their employees’ wage/salaries based on the Third Schedule, EPF Act 1991,” EPF said.

The EPF’s measure is not new and has been introduced in the past, with the government lowering contribution rates in 2001, 2003, 2009 and 2016.

In 2016, the government lowered employees’ contribution rate to 8% from March of that year until December 2017 to stimulate a slow economy.

The Covid-19 outbreak, originated from Wuhan, China, had cost billions of ringgit to the country’s economy, especially in the tourism and hotel sectors.

As of yesterday, it has infected more than 81,000 people (at press time), and new cases have been documented in at least 47 countries.