Welcome to the first edition of In Plain English, a blog series where we lay out in easy-to-read terms the numbers and regulations involving statutory laws. This week, we put in bare terms the rules and percentages for the Employeesโ Provident Fund. The figures shown here are accurate as of January 2019.
Employees’ Provident Fund (EPF), aka Kumpulan Wang Simpanan Pekerja (KWSP)

Who needs to pay EPF?
Employers and Malaysian citizen employees in the private sector are required to contribute to EPF. Every month, a set percentage of the employeeโs gaji must be borne by the employer and employee and paid into this savings and retirement planning fund. Also, EPF is voluntary for non-Malaysian citizens.
What kinds of wages are EPF-liable?
Pay EPF for these | Don’t pay EPF for these |
– Salary – Payment for un-utilised annual or medical leave – Bonus – Allowance – Commission – Incentive – Arrears of wages – Wages for maternity leave – Wages for study leave – Wages for half-day leave – Other payments under services contract or otherwise | – Service Charges – Overtime payment – Gratuity – Retirement benefits – Retrenchment, temporary and lay-off termination benefits – Any travelling allowance or the value of any travelling concessions – Payment in lieu of notice of ter- mination of employment – Director’s free |
What are the contribution rates for the employer and employee?
In a nutshell, the employees’ monthly statutory contribution rate is 11% for employees below the age of 60 and 5.5% for those aged 60 and above. Where employer contribution rate is concerned, it gets a little tricky. SO here are the specifics in 2 neatly drawn tables:
For Employees aged 60 years old and below
Monthly salary of RM5,000 or less | Monthly salary greater than RM5,000 |
Employee contributes 11% of monthly salary | Employee contributes 11% of monthly salary |
Employer contributes an amount equivalent to 13% of employee’s monthly salary | Employer contributes an amount equivalent to 12% of employee’s monthly salary |
For Employees aged 60 years old and above and up to 75 years old
(the minimum contribution rates are halved)
Monthly salary of RM5,000 or less | Monthly salary of RM5,000 or less |
Employee contributes 5.5% of monthly salary. | Employee contributes 5.5% of monthly salary. |
Employer contributes an amount equivalent to 6.5% of the employee’s salary | Employer contributes an amount equivalent to 6% of the employee’s salary |
For an exact breakdown of the salary ranges and their corresponding contribution amounts, refer to the KWSP website.
By when must the EPF contribution be paid?
EPF contributions must be paid no later than the 15th day of each succeeding month. For example, the contributions for February 2019 must be paid by 15 March 2019.
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