Govt increases FNPF employer and employee contributions from 6% to 7% from 1st Jan 2023

The government has increased the FNPF employer and employee contributions from 6% to 7% from 1st January 2023 through 31st December 2023.

Minister for Economy, Aiyaz Sayed-Khaiyum says for more than a year now, FNPF members’ accounts have received contributions at a lower rate.

This 1 percent reversal for both employers and employees should credit around $40 million to members’ accounts.

The government will eventually revert the contribution rates to a total of 18 percent (10 percent for employers and 8 percent for employees) in the coming years.

Sayed-Khaiyum says any employer who chooses to contribute in excess of the 7 percent mandatory contribution up to 10 percent, will be allowed to deduct 300 percent of the additional contribution from their taxes, and that additional income for their employees will be exempt from income tax.