EPF Contribution 2025: Rates, Eligibility, and How to Calculate

As an employer in Malaysia, ensuring your employees' financial security is one of your key responsibilities.

One of the most important aspects of payroll management is making the right contributions to the Employees Provident Fund (EPF).

But do you fully understand how EPF works, how much you need to contribute, and what happens if you don’t?

This guide will explain everything you need to know about EPF contributions, from the rates and calculations to legal obligations.

Read on to ensure your company stays compliant and your employees' futures are secure.

What is EPF Contribution?

EPF, managed by the Kumpulan Wang Simpanan Pekerja (KWSP), is a retirement savings scheme where both employers and employees contribute monthly.

Contributions are deducted from employees' salaries and supplemented by the employer.

These funds are then invested and managed to provide long-term financial security for employees upon retirement.

EPF Contribution Rates for Employers

EPF contribution rates are determined by the employee’s age and salary bracket. Below is a detailed breakdown of the rates:

For Employees Below 60 Years Old

Monthly Salary (RM)	Employer’s Contribution (%)	Employee’s Contribution (%)	Total Contribution (%)
Up to 5,000	13%	11%	24%
Above 5,000	12%	11%	23%

For Employees Aged 60 and Above

Monthly Salary (RM)	Employer’s Contribution (%)	Employee’s Contribution (%)	Total Contribution (%)
Any Amount	4%	0%	4%

Voluntary Contributions

Employers can contribute more than the mandatory requirement if they wish to enhance employee benefits.
Employees can also top up their EPF savings voluntarily through self-contribution.

Who Must Contribute to EPF?

Employers must contribute to EPF for employees who:

Are Malaysian citizens or permanent residents.
Work under a contract of service or apprenticeship.
Earn wages from employment in Malaysia.
Are aged 18 to 60 years old (mandatory contribution applies).

Exceptions:

Foreign workers (unless voluntarily registered for EPF).
Government employees under pension schemes.
Domestic workers, self-employed individuals, and statutory body employees.

How to Calculate EPF Contributions?

EPF contributions are calculated based on an employee’s gross monthly salary, which includes:

Basic salary
Fixed allowances (e.g., transport, housing, meal allowance)
Bonuses and commissions

It does not include:

Reimbursement claims
Overtime payments
Gratuities

EPF Contribution Calculation Formula

The contribution is calculated as follows:

Employee Contribution: Gross Salary x Employee’s Contribution Rate

Employer Contribution: Gross Salary x Employer’s Contribution Rate

Total Contribution: Employee Contribution + Employer Contribution

Example Calculation:

If an employee earns RM4,500 per month:

Employee’s Contribution = RM4,500 × 11% = RM495
Employer’s Contribution = RM4,500 × 13% = RM585
Total Contribution to EPF = RM495 + RM585 = RM1,080

When and How to Make EPF Payments

Payment Deadlines

EPF contributions must be paid by the 15th of the following month. Late payments will result in penalties and interest charges.

Payment Methods

Employers can submit EPF contributions using the following methods:

KWSP i-Akaun (Employer Portal)
Online banking (FPX payment)
EPF counters and kiosks
Authorized bank counters (e.g., Maybank, CIMB, RHB, Public Bank)
Cheque or bank draft (if necessary, but online payments are encouraged)

Penalties for Non-Compliance

Failure to comply with EPF regulations can result in severe penalties, including:

Fines up to RM10,000 per employee.
Imprisonment for up to 3 years.
Additional late payment interest charges, calculated at a rate determined by EPF.

Additional Employer Obligations

Apart from EPF, employers are also responsible for contributing to other statutory funds and schemes:

Statutory Body	Purpose
PERKESO (SOCSO)	Social security protection for employees in case of accidents, disabilities, or death
EIS (Employment Insurance System)	Financial aid for employees who lose their jobs due to retrenchment
LHDN (Income Tax Withholding - PCB)	Monthly tax deductions from employees’ salaries
HRDF (Human Resources Development Fund)	Levy contributions for employee training and development programs

How to Register for EPF as an Employer?

Employers who have newly registered businesses need to register with EPF. Here’s how:

Visit the KWSP website (https://www.kwsp.gov.my).
Register online through i-Akaun (Employer) or visit an EPF branch.
Submit the required documents:
- Business registration certificate (SSM Form 9, 24, 49 for companies)
- Employer’s identity document (IC or passport for foreigners)
Once registered, employers will receive an EPF employer number.
Employers must then start remitting contributions from the first month of employment.

Ensuring compliance with EPF rules helps employers avoid penalties and legal actions while securing employees’ financial future.

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Frequently Asked Questions (FAQ) About EPF Contributions

1. Can an employer contribute more than the mandatory EPF rate?

Yes, employers can voluntarily contribute more than the required percentage.

2. What happens if an employer fails to contribute to EPF on time?

Late contributions will incur penalties, including fines and imprisonment.

3. Can a foreign worker contribute to EPF?

Foreign workers are not required to contribute, but they can do so voluntarily.

4. How do employers check their EPF contribution records?

Employers can log in to KWSP i-Akaun to view and manage contributions.

5. Are contract and part-time employees eligible for EPF contributions?

Yes, if they are working under a contract of service and meet the eligibility criteria.