📣Benefits when leaving the provident fund

📣Benefits when leaving the provident fund

For this article, we would like to present the useful and should know about the rights and benefits when leaving the provident fund to leave each other. If you're ready, let's go see it.

🔸 Get to know provident fund

Provident Fund is a fund established by employers and employees with the purpose of saving money for employees to spend during retirement and is considered part of the benefits that employers provide to employees.

The provident fund money will come from

- Employees or members who will be deducted a portion of their wages to the fund on a monthly basis, also known as savings.

- and the second comes from the employer who will regularly pay another part to the fund every month and in addition to the payment of regular wages to the permanent employee where the money in this section is known as the contribution

🔸 Rules that should be checked

1. As for the accumulated money and benefits from the accumulated money

By this money, it will be the money that the employee or the member of the provident fund pays to accumulate into the fund every month and also includes the benefits that will be received from the savings and when the membership That ends, making the employee have the right to receive this amount in full in all cases.

2. Contributions and benefits derived from contributions

In which the money in this part is the part that the employer makes contributions to the provident fund to the employee or the provident fund member in every month and when the membership is terminated, how much money in this part will be refunded depends on the conditions or regulations of each fund. This is in most cases determined by the length of service or the number of years of membership of the provident fund. and to motivate employees to work in the long term

for example

- less than one year of service is eligible for a 10% contribution.

- Employed from one year onwards but less than two years will be eligible for a 20% contribution.

- Employed at least two years but less than three years will be entitled to a 40% contribution.

- Employed at least three years but less than four years will be entitled to receive a 50% contribution.

- Employed for four years or more but less than five years are eligible for 80% contributions.

- Finally, more than five years of employment that is eligible for 100% contributions

🔸 Tax rights and benefits

When being a member of the provident fund will be entitled and tax benefits according to the conditions Upon termination of membership, the cumulative benefits will be tax exempt. But in terms of benefits from savings, contributions and benefits from contributions must be calculated as income for tax purposes. which can be divided into 3 cases according to age and number of years of membership of the provident fund

Case 1 has retired before the age of 55 and the age of the fund's membership is less than 5 years.

In which case, there will be no tax rights and benefits. The three parts of the income, the benefit from the contributions and the benefit from the contributions, must be combined with other income to make pay income tax as usual

Case 2 has retired from work before the age of 55 years and has a provident fund member age of more than 5 years

In this case, you can choose whether to combine it with other income for tax filing or to calculate the tax separately. In the tax computation, special expenses are deducted in two parts: the first part is multiplied by 7000 by the number of years of service and the second part is deducted by the first part. How much is left, multiply by 50% and take the money after deducting these two expenses to calculate personal income tax.

Case 3 Retirement at the age of 55 years or more and the retirement age of the provident fund is more than 5 years

In which case, it will be exempt from paying tax in full.

How are you? Hope that this article will be useful for all readers and see you in the next article.

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