EPF Dividend Increase to 6.30% for 2024 with RM73.24 Billion Payout

The Employees Provident Fund (EPF) has declared a 6.30% dividend for both Simpanan Konvensional and Simpanan Shariah for 2024.

This marks a significant milestone, with a total payout of RM73.24 billion to EPF members.

For Malaysian employers, this announcement reinforces the importance of EPF contributions and their role in strengthening employee financial security. 

It also highlights the need for businesses to remain compliant and leverage EPF benefits as part of their workforce strategy.

But what does this mean for employers? Let’s break it down.

EPF/KWSP Declares 6.30% Dividend for 2024

EPF’s consistent growth reflects effective fund management and strategic investment decisions. The key financial highlights for 2024 include:

• Total Investment Income: RM74.46 billion (11% increase from RM66.99 billion in 2023)

• Total Investment Assets: RM1.25 trillion (10% growth)

• Total EPF Contributions: RM108.22 billion (11% increase)

• New Employer Registrations: 71,471, bringing the total to 614,563 employers

• Active Members: 8.78 million out of 16.22 million total members

For the year ending December 31, 2024, EPF reported a total investment income of RM74.46 billion, an 11% increase from RM66.99 billion in 2023. 

The fund's investment assets have now grown to RM1.25 trillion, reflecting a 10% increase from RM1.13 trillion in 2023.

This strong performance was driven by portfolio income, net contributions of RM108.22 billion (an 11% increase from RM97.56 billion in 2023), and strategic asset allocation. 

The positive results indicate EPF’s commitment to ensuring long-term financial security for employees in Malaysia.

What This Means for Employers

1. Increased Employee Confidence in EPF

A higher dividend rate boosts employee trust in EPF as a retirement savings institution.

Employees may feel more financially secure, which can lead to increased job satisfaction and productivity.

2. Higher Wage Expectations

The rise in total contributions (RM108.22 billion in 2024) reflects wage growth in Malaysia. 

Employers should be prepared for possible salary adjustments in line with market trends.

3. New Employer Registrations Growing

EPF recorded 71,471 new employer registrations in 2024, bringing the total number of registered employers to 614,563. 

This indicates a growing formal employment sector and the need for businesses to stay competitive in attracting and retaining talent.

4. Stronger Labour Market and Workforce Expansion

With 16.22 million total EPF members (including 8.78 million active members), more employees are contributing to EPF, reflecting a stable and growing workforce. 

Businesses should take advantage of this momentum by hiring skilled workers to strengthen their teams.

5. EPF’s Impact on Business Costs

With EPF contributions growing by 11 percent, employers must ensure:

• Accurate payroll deductions

• Timely and correct payments to EPF

• Compliance with EPF regulations to avoid penalties

Non-compliance can result in legal consequences, financial penalties, and reputational damage. 

Employers should stay informed about any regulatory changes and ensure internal processes are aligned with EPF requirements.

Malaysia’s Economic Outlook for 2025

EPF maintains a well-diversified investment strategy, with 63% of assets invested domestically. 

This approach contributes to economic stability, supports business growth, and enhances job creation. 

A strong and well-managed EPF translates to a more resilient financial ecosystem, benefiting both employers and employees.

How Employers Can Maximize EPF Benefits

1. Encourage Employees to Save More

Employers can introduce financial literacy programs to educate employees on voluntary EPF savings options. 

Employers can support this by promoting voluntary contributions through programs like i-Saraan for self-employed individuals and i-Sayang for spousal contributions.

Encouraging employees to increase their savings can contribute to greater financial security and reduce future financial stress, ultimately benefiting workplace productivity.

2. Maintain Compliance to Avoid Penalties

Employers should stay updated on EPF contribution rates, deadlines, and policy changes. 

Compliance not only helps businesses avoid legal repercussions but also reinforces a responsible corporate reputation.

3. Position EPF Contributions as an Employee Benefit

Offering competitive benefits, including employer contributions beyond the statutory requirement, can enhance a company’s attractiveness to potential hires. 

Employers can also highlight retirement savings as part of their overall employee value proposition.

Key Takeaways for Employers

• The 6.30% EPF dividend rate boosts employee confidence and financial security.

• Wage growth trends may impact salary structures and hiring budgets.

• The number of registered employers and employees continues to rise, reflecting a stable labour market.

• Businesses should prepare for higher payroll costs due to EPF contribution increases.

• Malaysia’s economy remains strong despite global uncertainties, providing growth opportunities for employers.

Looking Ahead to 2025 – What to Expect?

The strong economic outlook suggests that EPF will continue to play a vital role in Malaysia’s workforce. 

As an employer, staying proactive, informed, and compliant with EPF policies can: