In Plain English: EPF for Malaysian Businesses

EPF logo and banner
Reading Time: 2 minutes

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 Employees’ Provident Fund. The figures shown here are accurate as of January 2019.

Employees’ Provident Fund (EPF), aka Kumpulan Wang Simpanan Pekerja (KWSP)

official logo of EPF, employer's provident fund, or 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 employee’s 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 theseDon’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 lessMonthly salary greater than RM5,000
Employee contributes 11% of monthly salaryEmployee contributes 11% of monthly salary
Employer contributes an amount equivalent to 13% of employee’s monthly salaryEmployer 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 lessMonthly 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 salaryEmployer 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.

Auto-calculate EPF for your Malaysian Business

Talenox Malaysia banner

Talenox Malaysia comes preset with the contribution rates for Malaysia’s Employees Provident Fund (EPF), SOCSO (Social Security Organisation), Monthly Tax Deduction (MTD) and other statutory tax ordinance. Try out all the features and integrations with a free 30-day trial!

Read more about Talenox Malaysia here!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Good reads come to those who click.

Subscribe for quarterly email updates on the latest articles here.

NOTE: You are signing up for the Talenox Blog's email newsletter. By subscribing, you read, agree, and consent to our Privacy Policy ( and Terms of Conditions (