Hi all,

For a newly-formed company intending to pay only Director Fees, is there a need to register with EPF, Socso and LHDN, and then remit any % of Director Fees to them?

Thanks.

Among the payments not liable for EPF contribution:
• Service charges
• Overtime payment
• Reward
• Retirement benefits
• Retrenchment, temporary and lay-off termination benefits
• Any travelling allowance or the value of any travelling concession
• Payment in lieu of notice of termination of employment
• Director's fee

The above list is not exhaustive. Should require further clarification, please contact our Call Management Centre at 03-89226000, enquiry or any EPF Office.
http://www.kwsp.gov.my/portal/en/employers...-responsibility

Categories of employees exempted from SOCSO's coverage:-

• Government employees
• Domestic servants
• Self-employed persons
• Foreign workers
• Business owner and spouses of sole-proprietorship or partnership
http://www.perkeso.gov.my/en/employer-a-employee.html

LHDN...I think director can-lah

Thanks, yklooi.

So it means that Director's Fees have to pay PCB to LHDN?

I think it depends on the amount......
example.
http://www.hasil.gov.my/goindex.php?kump=5...it=5000&sequ=11




This post has been edited by yklooi: Sep 14 2013, 03:15 PM

What is the best way to pay Director without having to pay LHDN upfront?

pay at the end of the year?

Maybe I should rephrase my question:

What is the best way to classify payment to myself on a regular basis, without the company having to pay EPF, Socso, LHDN or Kastam?

good question....
what about dun't pay director fees above the taxable rate?

Which is RM2,500 per year? Can't survive with that amount la.

what about paying a little taxes and the director got higher fees...both win-win for the director and the govt....
unless you have certain reason against paying taxes.
that's is all I know.....
guess the govt needed taxes to run and give BR1M among others

Taxes has to be paid of course. My point is that if I receive the Director Fees, I will have to declare it in full in my BE Form. That is on personal income tax.

On the company side, I would like to find out what procedures there are when it comes to my Sdn Bhd paying me the Director Fees, as in what are the procedures and % of tax to be paid, and when.

get the advise of a qualified tax accountant......what is posted here may not be "qualified". and you may end up in deep shit with the govt. ha-ha

I am sure there are some excellent tax/accounting/cosec types here

then how do you who is real?
are they really helping you or secretly "hurting" you in the end?

Director salary paid for each month - subjected to EPF, Socso, PCB (Tax instalment)

Director fee paid in ad-hoc basis - Not subject to EPF and Socso, Have to declare in BE form

Company tax rate is at 20% (For the first RM500k chargable income), subsequently 25% flat rate.
While Personal tax rate is multi tier rate, max at 26%.
These figure will help u in your business tax planning

If pay dividend, is it taxable at personal level?

Or if pay ownself as consultant?

Even if u declare dividend, the profit at Company level still has to pay tax.

Then why not declare director salary/fee to reduce it? is all about tax planning

but TS is seeking to "What is the best way to classify payment to myself on a regular basis, without the company having to pay EPF, Socso, LHDN or Kastam?"

My bad

Dividend would be the best option to avoid all the above, since our tax structure is tax on one source.

So it is best to, for example, let the company revenue be taxed maximum at 20%, then declare the Profit After Tax as dividends (which is not taxable at the personal level at 25%)?