EPF Voluntary Contribution in Malaysia: How It Works & Benefits

In many companies, monthly EPF contributions are automatically deducted from employees' salaries.

This helps them save for retirement without needing to think much about it.

But what some employees might not realise is, they can also top up their EPF voluntarily on top of the usual deduction.

Voluntary EPF contributions can be done by employees themselves, and in some cases, even by employers as an additional benefit or incentive.

Besides boosting retirement savings, these voluntary contributions come with tax relief that can help employees reduce their personal income tax.

In this article, we’ll break down what voluntary EPF contributions are, who can make them, how the tax relief works, and how employers can support this option at work.

What is Voluntary EPF Contribution?

Voluntary EPF contribution means putting extra money into an employee's EPF account—on top of the usual monthly deductions.

Unlike the required EPF contributions that both employer and employee make through payroll, voluntary contributions are optional and flexible.

Employees might choose to do it to save more. Freelancers and gig workers often use it since they don’t have regular employers.

Even retirees sometimes top up their savings this way.

As an employer, you can also make voluntary contributions—for example, as a bonus or reward for loyal staff. It’s a simple way to show appreciation or offer extra support.

Voluntary EPF helps grow retirement savings, and it may also come with tax relief, which we’ll cover next.

Eligibility for EPF Voluntary Contributions

Not everyone is under the same employment setup.

Some people work without fixed employers, some are running their own business, and others are freelancers or gig workers.

For freelanceers and gig workers, voluntary EPF contributions offer a flexible way to grow their retirement savings even without the usual employer deductions.

Here are some common profiles eligible for voluntary EPF contributions:

Employees without a fixed employer: These are individuals who may be between jobs, part-time workers, or those who prefer freelance or contract-based arrangements. Even though they don't contribute through payroll, they can still build their EPF savings voluntarily.
Gig workers and freelancers: Platforms like Grab, Foodpanda, and various freelance portals have increased the number of Malaysians doing gig-based work. They often don't get EPF deductions, but they can contribute voluntarily under their own name to secure long-term savings.
Business owners: If you're running your own business or are self-employed, you're also eligible. You can contribute directly to EPF as long as you have a registered EPF account.

Tax Relief for Voluntary EPF Contributions

Voluntary EPF contributions aren't just great for saving more — they can also help employees pay less tax.

This is especially useful for freelancers or employees without steady EPF deductions.

By adding extra to their EPF, they not only grow their savings but also enjoy personal income tax relief.

Here’s the simple breakdown:

Under Malaysia’s tax rules, both mandatory and voluntary EPF contributions are grouped together with life insurance or family takaful under a RM4,000 yearly tax relief cap.
For example, if an employee’s monthly EPF deductions add up to RM3,600 a year, they can top up another RM400 voluntarily to hit the RM4,000 tax relief limit.
If they also have life insurance, they’ll need to share that RM4,000 cap between EPF and insurance.

Even voluntary EPF contributions made for parents or a spouse may qualify for tax relief too — under certain conditions.

As an employer, this is something you can highlight during financial talks or year-end payroll briefings.

Most employees don’t realise that small top-ups can lead to big savings — now and in the future.

How to Top Up a Voluntary Contribution

Making a voluntary EPF contribution is easier than many people think. It can be done through several channels, no matter whether it’s a small top-up or a large lump sum.

These are the main ways to contribute voluntarily to EPF:

1. EPF i-Akaun (Online Banking)

Employees who have activated their i-Akaun can make voluntary contributions through online banking.

Most major Malaysian banks are linked with EPF, so contributors can log in to their banking platform, select “EPF Payment,” and follow the steps to submit a top-up.

2. KWSP Mobile App

Employees who prefer mobile access can download the official KWSP app to check balances, make payments, and track contributions.

3. JomPAY

JomPAY is another convenient channel where contributors can use their bank's online platform. Just key in the EPF biller code and reference number provided by EPF.

4. EPF Counters or Kiosks

For those who prefer physical transactions, voluntary contributions can be made at EPF branches or self-service kiosks located nationwide.

Tax Filing and Claims

Once employees make a voluntary EPF contribution, the next step is to claim the tax relief during their annual tax filing.

For many, this part is where confusion begins, especially if they’re contributing outside of the mandatory employer-employee scheme.

How does it work? Voluntary EPF contributions fall under personal income tax, not the company’s corporate tax.

So, it's the employee who needs to report and claim the tax relief when filing their own taxes.

If your employee made voluntary contributions during the year, they’ll need to:

1. Keep a copy of their EPF statement or receipt

These documents are the proof they’ll need during submission. It's recommended they download or request these directly from their i-Akaun or from the EPF branch.

2. File under the right section in e-Filing (Form BE)

Contributions should be reported under Section D – Relief for EPF and Life Insurance/Family Takaful.

This section includes both mandatory and voluntary EPF contributions, as well as life insurance premiums.

You don’t need to handle these claims directly for your employees.

However, sharing a quick internal guide or reminding your team during tax season can help reduce errors and promote financial literacy across your company.

Can Employers Contribute Voluntarily for Employees?

Yes, you can make extra (voluntary) EPF contributions on top of the required monthly deductions.

Many employers do this as a way to reward or take care of their team. It’s a nice way to support your employees' long-term financial goals.

Companies usually offer this as part of:

Performance rewards – instead of a cash bonus, you can top up their EPF.
Retention plans – give EPF bonuses after 3 or 5 years of service.
Festive or anniversary gifts – as a sign of appreciation.

But before you start, make sure to understand the tax impact.

For employers, extra EPF payments may be considered business expenses. Whether they’re tax-deductible depends on how they’re recorded.

For employees, these top-ups still count as EPF savings. But there’s a tax relief cap – EPF + life insurance contributions are only tax-deductible up to RM4,000 per year.

So, if you’re planning to offer this benefit, it’s best to talk to your finance team or tax advisor. That way, you make sure it’s done right – for both your business and your employees.

Voluntary Contribution Limits

Voluntary EPF contributions are flexible, but there are still some rules to know.

The minimum amount you can contribute is just RM10 per transaction—great for anyone starting small or building a savings habit.

However, there is a yearly limit. If you're under 55, the total EPF contributions (both mandatory and voluntary) can't go over RM100,000.

For retirees or self-employed individuals, voluntary contributions are a good way to take control of your savings.

You can contribute monthly for consistency, or make one-time payments—like after getting a bonus or when your business does well.

If you contribute too much by mistake, EPF might refund the extra. But it’s better to keep track and avoid the hassle.

Also, remember: only up to RM4,000 of voluntary EPF contributions can be claimed for tax relief, even if you put in more.

Benefits of Making Voluntary Contributions

On employer’s perspective, encouraging voluntary EPF contributions can bring real advantages. Not just for employees but for the company culture too.

Better Retirement Savings

Many Malaysians, especially freelancers, gig workers, or those in non-traditional employment, may not have structured retirement savings.

Voluntary contributions give them the chance to build a safety net, even without a fixed employer.

Tax Relief for Individuals

Employees can reduce their taxable income by making additional contributions.

This is especially useful near the end of the year, when people are reviewing finances and filing for tax relief.

As mentioned earlier, contributions (combined with life insurance premiums) can reduce taxable income by up to RM7,000 annually, depending on the type of contribution.

More Flexibility

Employees can decide how much and when to contribute. There’s no fixed schedule, so it’s ideal for those with unstable or irregular income.

Encourages Financial Responsibility

Promoting voluntary savings builds a strong saving habit among employees. It teaches them to think about their long-term financial goals.

Positive Employer Branding

When employers support or promote voluntary contributions, it shows the company cares about long-term employee welfare, even beyond the basics of salary and benefits.

FAQ

What is the max voluntary EPF contribution allowed?

There is no strict upper limit set for voluntary contributions, but EPF has a cap of RM100,000 per year per member for individual voluntary contributions (Category 1). This applies to self-contributors who are topping up their own accounts. If the contribution is made by a third party or employer (Category 2), the combined limit across all recipients is RM60,000 per year.

Can I claim tax relief if I contribute to my spouse’s EPF?

Yes, you can. But only under certain conditions. If you are voluntarily topping up your spouse’s EPF account under Category 3 (Top-up Savings), it’s treated as your own contribution and may qualify for tax relief under the combined RM3,000 relief limit (shared with life insurance/takaful). Keep the receipt and proof of payment for tax filing.

Is it better to contribute voluntarily monthly or annually?

There is no fixed rule. Some individuals prefer monthly contributions for budgeting purposes, while others make a lump sum payment at year-end to maximise tax relief. Either way, the contribution must be made within the tax assessment year to be claimable.

Will the voluntary amount be eligible for dividends?

Yes. Voluntary contributions are treated like normal savings in EPF and earn annual dividends based on EPF’s declared rates. So, in addition to tax savings, your voluntary top-ups help grow your retirement fund.

Is there a penalty for over-contributing?

EPF will refund any excess amount if you contribute beyond the allowed limit. However, there’s no penalty, just be mindful that any excess beyond RM100,000 (Category 1) or RM60,000 (Category 2) won’t be accepted. Always double-check your contribution limit before making a payment.

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