Pengeluaran KWSP 2025: Complete Guide for Employers

In every HR department, questions about pengeluaran KWSP come up regularly. An employee might ask how to withdraw savings for a medical bill, another may want to use their funds for a first home, while some are curious about the new Akaun Fleksibel (Account 3).

That is why employers need to understand how the Employees Provident Fund (KWSP/EPF) works to give the right guidance when staff need help.

This article explains the latest KWSP account structure, the types of withdrawals available in 2025, and how HR can support employees through the process.

What is KWSP (EPF)?

The Kumpulan Wang Simpanan Pekerja (KWSP/EPF) is Malaysia’s retirement savings scheme. Employers and employees contribute monthly, building a safety net for employees’ future. Beyond retirement, KWSP also provides structured withdrawal schemes for housing, education, healthcare, and other important life events.

Employers need to know KWSP to answer staff questions clearly, prepare the right documentation, and keep payroll practices aligned with KWSP regulations.

Restructuring of KWSP Accounts

Starting in 2024, KWSP introduced a new three-account structure to balance short-term and long-term needs better. This continues in 2025:

Akaun Persaraan / Account 1: 75% of new contributions go into the Retirement Account.
Akaun Sejahtera / Account 2: 15% go into the Wellbeing Account.
Akaun Fleksibel / Account 3: 10% go into the Flexible Account.

Account 3 is a new feature created for flexibility. Unlike Accounts 1 and 2, it lets members withdraw funds anytime (with a minimum of RM50 balance).

Types of KWSP Accounts

Account 1 (Retirement Account)

The retirement account receives the largest portion (75%) of contributions and can only be withdrawn in full at age 55, or earlier under special conditions such as incapacity.

Account 2 (Wellbeing Account)

Wellbeing account supports life needs such as housing, education, medical expenses, Hajj, and a special withdrawal at age 50. Employees often approach HR for advice on this account since most partial withdrawals come from here.

Account 3 (Flexible Account)

Like the name, this is the most accessible account, with 10% of contributions. Employees under 55 can withdraw at any time, as long as they keep at least RM50 inside. Payments are usually credited within seven working days.

KWSP Withdrawal 2025 from Account 1 & Account 2

At age 55, Accounts 1 and 2 merge into Account 55. Employees can choose to withdraw all, take out partial amounts, or receive monthly payments. Contributions made after age 55 go into a separate Akaun Emas, which can only be withdrawn at age 60.

Eligibility:

Both Malaysians and non-Malaysians can apply.
Must be between ages 55 and 59.
Must have savings in Account 55.

Withdrawal options include:

Full withdrawal
Partial withdrawal
Monthly payment withdrawal
Combination of partial withdrawal and monthly payments
Automatic annual dividend payment
Withdrawal payment to an approved Investment Institution (IPD)

What can be withdrawn?

Withdrawal Type	Citizens	Non-Citizens (Joined Before 1 Aug 1998)	Non-Citizens (Joined On/After 1 Aug 1998)
All savings in Account 55	Yes	Yes	Yes
Partial withdrawal (no minimum amount)	Yes	Yes	No
Monthly payments (min RM100/month or RM1,200/year for at least 12 months, up to age 100)	Yes	Yes	No
Combination of partial and monthly withdrawals	Yes	Yes	No
Annual dividend withdrawal (lump sum of dividends from previous year)	Yes	Yes	No
Monthly dividend withdrawal (min RM600 = RM100/month for at least 6 months; max 12 months)	Yes	Yes	No
Age 55 Investment Withdrawal (min transfer RM1,000; must maintain min RM1,000 balance in Account 55; transfer only to KWSP-approved IPD)	Yes	Yes	No

KWSP Withdrawal from Account 3

Members can withdraw from Account 3 at any time, provided the balance is at least RM50. Requests may be submitted online via the i-Akaun portal or in person at any EPF branch.

After approval, the funds are typically deposited into the member’s bank account within seven working days.

Conditions for Account 3 withdrawal:

Open to all EPF members, both Malaysians and non-Malaysians
Must be below 55 years old
Must have savings in the Flexible Account
Minimum withdrawal amount is RM50

How to Apply for Account 3 Withdrawal

The withdrawal can be applied manually by filling out a form at the counter, kiosk, or online.

The online withdrawal is through i-Akaun. Below is the step-by-step guide for a Flexible Account (Account 3) withdrawal through i-Akaun:

Log in to the EPF i-Akaun app. You can download the app or visit: https://iakaun.kwsp.gov.my/portal/member/login
Select the Withdrawal menu, then choose Withdraw Your Savings.
Select Flexible Account.
Click Withdraw Now.
Enter the withdrawal amount and click Continue.
Select or update your bank account.
Click Continue.
Click Accept if you agree with the Member’s Declaration.
Enter the TAC number.
Your application has been successfully submitted.

17 Types of KWSP Withdrawals 2025 (Partial Withdrawals)

KWSP categorises withdrawals into Partial Withdrawals (before age 55, for specific needs) and Full Withdrawals (at retirement age, incapacity, leaving Malaysia, or death). Here’s the full breakdown, with details from the official material.

1. Withdrawal at Age 50

Employees between age 50 and before 55 can make a one-time withdrawal from Account 2. This can be either partial or the entire balance of Account 2. It is meant as a pre-retirement option to prepare financially before age 55.

Conditions:

Age 50–54.
Savings available in Account 2.
Can only be done once.

2. Education Withdrawal

Employees may use Account 2 to pay for education fees for themselves, their spouse, children, or parents. This covers studies at approved local or overseas institutions, from certificate level (Tahap 3) up to PhD.

Conditions:

Under 55 years old.
Valid offer letter, tuition bills, or proof of enrolment required.
Payment may go directly to the institution or reimbursed to the member.

For further information, check https://www.kwsp.gov.my/ms/ahli/fasa-kehidupan/pengeluaran-pendidikan.

3. Purchase of a House

Withdrawals from Account 2 can fund the purchase of a residential property.

Conditions:

Must be a house, flat, apartment, condominium, or similar.
Requires proof of purchase such as Sale and Purchase Agreement.
First-time buyers or those who have disposed of a previous house can apply.

For further information, please check https://www.kwsp.gov.my/ms/ahli/pengeluaran-rumah/beli-rumah

4. Building a House

If a member wants to build a home, Account 2 can be used.

Conditions:

Below 55 years old
Have at least RM500 in Account 2
Member or spouse has purchased land and is building a house on that land
Loan approved by a recognised lender OR self-financing
Has never made a Housing Withdrawal / Or has previously withdrawn to buy a house but has since sold or disposed of ownership
House Building Agreement must not be more than three (3) years from the date the application is received

For further information, check https://www.kwsp.gov.my/ms/ahli/pengeluaran-rumah/bina-rumah

5. Reducing or Settling Housing Loan Balance

Employees can use Account 2 to pay off part or all of their housing loan.

Conditions:

Below 55 years old
Have at least RM500 in Account 2
Have purchased/built a residential house*
Member is registered as the owner of the house
The residential house has been charged as collateral
Member still has an outstanding housing loan with an approved institution
Application can be made once a year from the date of the previous application
Loan must be approved by a recognised/approved institution

6. Monthly Housing Loan Instalments

For employees struggling with monthly instalments, KWSP allows withdrawal from Account 2.

Conditions:

Below 55 years old
Have at least RM600 in Account 2
Have purchased/built a residential house
Still have outstanding housing loan arrears with a lender recognised by EPF
Monthly instalments have already started

For further information, check https://www.kwsp.gov.my/ms/ahli/pengeluaran-rumah/ansuran-bulanan

7. Flexible Housing Scheme

You can use your current and future EPF savings to increase your chances of getting a housing loan from a bank. Part of your savings in Account 2 will be set aside into a special Flexible Housing Loan Account.

When the bank reviews your loan application, it will count your monthly EPF contributions as part of your income.

Conditions:

Below 54 years old
Purchasing/Building a residential house
Have a housing loan with a financial institution recognised by EPF

8. PR1MA Housing Scheme

For members purchasing their first home under the PR1MA programme, Account 2 savings and future contributions may be used. The withdrawal supports the government’s initiative to help middle-income earners own homes.

Check further information about PR1MA: https://www.pr1ma.my/

9. Hajj Withdrawal

Muslim members can use Account 2 to supplement Tabung Haji savings if selected to perform Hajj.

Conditions:

Under 55 years old.
Must have official confirmation from Lembaga Tabung Haji (LTH).
Not previously applied for Hajj withdrawal.
LTH savings insufficient to cover full cost.

For further details, check https://www.kwsp.gov.my/ms/ahli/fasa-kehidupan/pengeluaran-haji

10. Health-Related Withdrawal

Account 2 can be used to cover treatment for critical illnesses or for approved medical equipment.

Coverage:

The member.
Parents (biological, adoptive, in-law).
Spouse.
Children (biological, adoptive, step).
Siblings (biological).

Conditions:

Aged 55 years and below
Have savings in Account 2
Medical costs are not fully covered by the employer
Illness/Medical equipment must be approved by EPF
Not receiving alternative treatment

In Budget 2020, EPF announced plans to introduce a new withdrawal category to support members whose spouses undergo fertility treatments, including in-vitro fertilisation (IVF).

11. Savings Exceeding RM1 Million

Members with savings above RM1 million may withdraw the excess amount and manage it independently. The RM1 million base remains in KWSP and continues earning dividends.

12. Incapacity Withdrawal

Members can withdraw all their EPF savings if a doctor or an EPF medical panel confirms that they are permanently unable to work because of physical or mental incapacity.

The application must be submitted with full documents at the nearest EPF office. If everything is complete, approval is usually given within 21 working days.

Conditions:

Below 55 years old
Have savings in EPF
Not working
Certified by a medical officer as physically or mentally incapacitated
Must be assessed by the EPF Medical Board
The assessment appointment by the EPF Medical Board will be set during the submission of the application at the counter

For further details, please check https://www.kwsp.gov.my/en/member/healthcare/incapacitation

13. Leaving Malaysia

Malaysian citizens who renounce their citizenship, or expatriates/foreign workers permanently leaving Malaysia, may withdraw their entire savings. Documents such as a passport or immigration approval must be shown.

14. Death Benefits Withdrawal

If a member passes away, their nominee or next of kin may claim the savings. In addition, KWSP provides a Death Assistance payment as outlined in the scheme. HR should encourage employees to update their nominees to avoid complications.

15. Retirement for Pensionable Employees / Optional Retirement

Public sector employees who are confirmed as pensionable may withdraw their KWSP savings before age 55. This is usually a one-time withdrawal to transition into the pension scheme.

Conditions:

Below 55 years old
Employee in the public sector / Ministry of Defence / Armed Forces who contributes to EPF
Granted pensionable status by the Public Service Department (JPA)

16. Withdrawal at Age 55

At age 55, the savings in Account 1 and Account 2 are merged into a new Account 55. From this account, members can take out either the full balance or partial amounts whenever they choose.

For those who keep working beyond 55, any new contributions will go into a special account called Account Emas, and these funds can only be withdrawn when the member turns 60.

For further information, check https://www.kwsp.gov.my/ms/ahli/fasa-kehidupan/pengeluaran-umur-55-60

17. Withdrawal at Age 60

The age 60 withdrawal is the next stage after the age 55 withdrawal, designed for members who keep working past 55.

When you turn 60, the balances from Account 55 and Account Emas will be merged. At that point, you can take out all your savings in one go or withdraw smaller amounts whenever you need them for retirement.

For further information, check https://www.kwsp.gov.my/ms/ahli/fasa-kehidupan/pengeluaran-umur-55-60

Additional Information

You can find the latest guidelines and policy below:

Website: https://www.kwsp.gov.my / https://www.kwsp.gov.my/ms/korporat/hubungi-kami
Facebook: Kumpulan Wang Simpanan Pekerja
Hotline: 03-8922 6000

FAQs

Can employers help employees apply for KWSP withdrawals?

Employers cannot submit applications on behalf of employees, but HR can guide them, explain the requirements, and direct them to i-Akaun or the nearest KWSP office.

Is KWSP withdrawal taxable?

Tax treatment is not detailed in the 2025 material. HR should advise employees to check directly with KWSP or LHDN.

How long does it take to process a withdrawal?

For most cases: Account 3 takes about 7 working days, withdrawals at age 55 or 60 take 1–10 working days, and death benefits take around 26 days.

Can foreign employees contribute and withdraw KWSP?

Yes. Non-citizens also contribute and may withdraw under certain rules, for example, when leaving Malaysia permanently.

What documents are needed?

It depends on the type of withdrawal. Common examples: property purchase agreements for housing withdrawals, medical reports for health withdrawals, or university offer letters for education.

Can employees make multiple withdrawals in a year?

Some withdrawals are limited (such as reducing housing loans, which is once a year), while others are one-time (such as the Age 50 withdrawal). Employees should check their eligibility before applying.

How does a KWSP withdrawal affect retirement savings?

While withdrawals help employees meet urgent needs, they also reduce retirement savings. HR should remind staff to weigh immediate needs against long-term security.

Your Next Hire Could be Just a Click Away!

At AJobThing, we connect you with 5+ million jobseekers in Malaysia, ensuring you hire the best.

Post your job ads today & simplify your hiring process!