A Malaysian woman recently sparked discussion after sharing a simple EPF “hack” that could potentially help some taxpayers save more on tax.
Her idea was to withdraw RM3,000 from EPF Account 3, transfer it to her bank account, then put the same RM3,000 back into EPF as a voluntary contribution.
She estimated that this could save her up to RM750 in tax.
But before you try it, there are a few important catches.
1. Yes, voluntary EPF contributions can qualify for tax relief
Under the current tax relief structure, taxpayers may claim up to RM4,000 for EPF contributions.
There is also another RM3,000 relief category shared between life insurance, family takaful and additional voluntary EPF contributions.
So if you still have unused relief under this category, topping up your EPF could potentially reduce your taxable income.
2. RM3,000 relief does not mean RM750 for everyone
This is where some people may misunderstand the “hack”.
Tax relief reduces your chargeable income. It is not a direct cash payout.
For example, if RM3,000 of relief falls within a 25% tax bracket:
RM3,000 × 25% = RM750 in potential tax savings
But someone in a lower tax bracket would save less.
The original poster later clarified that RM750 was based on her own tax situation.
3. Already maxed out your relief? Then it may not help
The RM3,000 relief is shared with qualifying life insurance and family takaful contributions.
So if you have already fully used that RM3,000 limit, adding another RM3,000 into EPF would not automatically give you extra tax relief.
This means the “hack” works differently for everyone.
4. Your RM3,000 will not go fully back into Account 3
This is probably the biggest catch.
When you voluntarily contribute RM3,000 back into EPF, the money is split according to EPF’s current allocation:
75% to Akaun Persaraan: RM2,250
15% to Akaun Sejahtera: RM450
10% to Akaun Fleksibel: RM300
So after putting RM3,000 back in, only around RM300 would return to the account that can be easily withdrawn.
This means you cannot simply keep recycling the same RM3,000 over and over.
5. You are trading easy access for potential tax savings
The strategy may sound attractive, but remember that most of the money will be moved into longer term EPF savings.
For someone with enough emergency savings, that may not be an issue.
But if you might need the RM3,000 for daily expenses or emergencies, locking most of it back into EPF may not be worth the tax savings.
So, is the EPF ‘hack’ worth trying?
It could be useful for some people, especially those who still have unused tax relief and are already comfortable putting more money into retirement savings.
But it is definitely not “free RM750”.
How much you actually save depends on your tax bracket, existing relief claims and personal financial situation.
So before moving money around just for tax relief, it is worth checking how much relief you actually have left first.
