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The calculation for EPF dividend is not straight forward. It is not calculated by simply multiply the total contribution or year end balance with the declared dividend rate.
The way EPF dividend calculated is based on daily rest. Means that, dividend is calculated based on daily balanced of each account 1 and 2. However, please bear in mind the following,
- Monthly contribution start earnings dividend only on the last day of the month irrespective the actual day the monthly contribution is deposited.
- For withdrawal, dividend for the withdrawal sum is only eligible up to the day prior to withdrawal day. No dividend will be given on the withdrawal day.
The following is simple example on how to calculate. Alternatively, you may want to use online “EPF Dividend Calculator”
The formula to calculate EPF dividend is as follow,
Daily Dividend = Daily Balance x Yearly Dividend / No of Days in a Year
Total Yearly Dividend = Sum of Daily Dividends.
Take example on the following scenario,
EPF declared 5.65% dividend for year 2009. Opening balance, monthly contribution and withdrawal for Mr M in 2009 are as follow,
| Items | Account 1 | Account 2 |
|---|---|---|
| Opening Balance (RM) | 70,000 | 30,000 |
| Monthly Contribution (Jan-Dec) (RM) | 700 | 300 |
| Withdrawal ( 15th Feb) (RM) | 1000 | 0 |
This is how to calculate the dividend received by Mr M,
January 2009
From 1st until 30th January, dividend is calculated as follow,
Account 1 dividend = 70,000 x 5.65% / 365 x 30 days = 325.07
Account 2 dividend = 30,000 x 5.65% / 365 x 30 days = 139.32
On 31st on January, dividend is calculated as follow,
Account 1 dividend = (70,000 + 700) x 5.65% / 365 = 10.94
Account 2 dividend = (30,000 + 300) x 5.65% / 365 = 4.69
February 2009
From 1st until 14th February, dividend is calculated as follow,
Account 1 dividend = (70,000 + 700) x 5.65% / 365 x 14 days = 153.22
Account 2 dividend = (30,000 + 300) x 5.65% / 365 x 14 days = 65.66
From 15th until 27th February, dividend is calculated as follow,
Account 1 dividend = (70,000 + 700 – 1000) x 5.65% / 365 x 13 days = 140.26
Account 2 dividend = (30,000 + 300) x 5.65% / 365 x 13 days = 60.97
On 28th on February, dividend is calculated as follow,
Account 1 dividend = (70,000 + 700 – 1000 + 700) x 5.65% / 365 = 141.67
Account 2 dividend = (30,000 + 300 + 300) x 5.65% / 365 = 61.58
March to December 2009
You have to continue doing this until December 2009. In the end you have sump up all the figures to obtain dividend for both Account 1 and 2.
Too complicated? Don’t worry. You can use online “EPF Dividend Calculator”.
Thanks to 1-million-dollar-blog readers, “marx” who shows us on how to calculate EPF dividend correctly. Read the comments on following post for reference.
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{ 3 comments… read them below or add one }
I also commented David Lee’s post: http://imdavidlee.com/how-to-calculate-your-epf-dividend/
See how I “debunk” his statement :p below
http://farm5.static.flickr.com/4077/4934130168_6892ae4afd_b.jpg
http://farm5.static.flickr.com/4122/4933536469_5559632de5_b.jpg
You take the effort to combine both the “annual” & “monthly” dividends, that’s good ! You even have the online EPF Dividend calculator now. That’s one of its kind and perhaps the ONLY ONE in Malaysia ! That’s great !
marx,
Credit also goes to you for finding the right formula to calculate.
I just check my 2010 EPF statement online. It is 5.8% for year 2010 dividend rate !