Why Payroll Report Does Not Match EPF Submission

It is a common issue for many businesses in Malaysia, the payroll report generated from payroll software does not match the EPF submission figures. This mismatch can lead to confusion, delays in statutory payments, and even compliance risks during audits.

Understanding the reasons behind these differences is important to ensure accurate payroll processing and smooth statutory submissions.

1. Differences in Payroll Cut-Off Dates

Different payroll and EPF cut-off dates often create reporting discrepancies.

• Payroll reports typically follow salary accrual dates
• EPF submissions follow actual salary payment dates

For example, if you process a salary in December but pay it in January, the payroll report and EPF submission will appear in different months, causing a mismatch.

2. Unpaid or Partially Paid Salaries

EPF contributions depend on actual wages paid, not simply the amounts recorded in payroll reports.

Discrepancies often occur when:

• The company processes salaries but delays payment
• Employees receive only partial salary payments, advances, or staggered payments
• Payroll staff fail to update adjustments before submitting EPF contributions

As a result, payroll reports may show higher amounts than the EPF submission.

3. Incorrect Employee EPF Category Setup

Employee contribution rates vary according to age and employment status. Incorrect system settings can easily create mismatches.

Common setup mistakes include:

• Assigning employees to the wrong EPF category
• Failing to update contribution rates when employees reach age 60
• Entering incorrect employer or employee contribution percentages

Even minor configuration errors can affect payroll accuracy over multiple months..

4. Overtime, Bonus, and Allowance Differences

Not all earnings are treated equally in payroll reports and EPF submissions.

Some components may:

• Be included in payroll reports but excluded in EPF calculations
• Be incorrectly categorized as non-contributable income
• Be added in a different payroll period

For example, bonuses may be processed in payroll but submitted to EPF in a different month depending on payment timing.

5. Employee Data Changes Not Updated

Employee information changes can also affect EPF calculations, such as:

• Salary increment not updated in payroll system
• Change in working hours or employment type
• Incorrect effective date for salary changes

If updates are not properly applied, payroll reports will not reflect actual EPF contributions.

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