EPF contribution in Malaysia is one of the main statutory payroll obligations employers need to manage every month. The Employees Provident Fund, commonly known as EPF or KWSP, requires eligible employers and employees to contribute a portion of monthly wages into the employee’s EPF savings account.
For Malaysian employers, HR teams and payroll professionals, EPF calculation is not always as simple as multiplying salary by a percentage. For most Malaysian employees earning RM20,000 or less per month, employers must use the official wage ranges in the Third Schedule of the EPF Act 1991. Exact percentage calculations generally apply only when wages exceed RM20,000, while a separate calculation method applies to many non-Malaysian employees.
The current contribution rates used in 2026 took effect from the October 2025 salary period. These rules introduced mandatory EPF contributions for many non-Malaysian employees and continue to apply in 2026 unless KWSP issues a later statutory change.
What Is EPF Contribution Malaysia?
EPF contribution is a compulsory retirement savings contribution paid into an employee’s Employees Provident Fund account by the employer and, in most cases, the employee.
The contribution is governed mainly by the Employees Provident Fund Act 1991 and the contribution rates in its Third Schedule.
Who Must Contribute to EPF?
Employers are generally required to contribute to EPF for employees engaged under a contract of service or apprenticeship. The contract may be written, verbal, expressed or implied.
This requirement covers more employment arrangements than many employers expect. Permanent employees, contract employees, part-time workers, temporary employees, probationary employees and directors receiving salary or wages may all fall within the EPF contribution rules.
The minimum age for EPF registration is 14 years old, while the maximum contribution age is generally 75 years old. Contribution rates change once an employee reaches age 60.
For Malaysian citizens below age 60, the normal statutory employee contribution rate is 11%. The employer contribution rate is generally 13% for monthly wages of RM5,000 or below and 12% for monthly wages above RM5,000. The statutory wage table must still be used for wages of RM20,000 or less.
Permanent residents and certain non-Malaysian employees who became EPF members before 1 August 1998 broadly follow the same contribution structure as Malaysian citizens below age 60. Different rates apply after age 60.
From the October 2025 salary period, mandatory EPF coverage was also extended to many non-Malaysian employees working legally in Malaysia. For non-Malaysian employees who became EPF members from 1 August 1998 onwards, the standard contribution rate is 2% from the employer and 2% from the employee.
Who Is Exempt From EPF?
Not every person who performs work must automatically be treated as an EPF employee.
The EPF Act contains a First Schedule identifying persons who are not treated as employees for EPF purposes. Certain domestic servants are among the excluded categories, although exceptions apply depending on who employs them.
Foreign domestic workers are also excluded from the mandatory foreign-worker contribution expansion introduced from October 2025. KWSP states that employers of non-Malaysian domestic servants are not required to make mandatory contributions, although voluntary contribution options may be available.
A person working under a true contract for service, rather than a contract of service, may also fall outside the normal employer-employee contribution relationship. In simple terms, a contract for service normally involves an independent service provider who controls how the work is performed rather than working as an employee under the employer’s direction.
Employers should not assume that job titles such as “consultant”, “freelancer” or “contractor” automatically remove EPF obligations. The actual working relationship matters.
Pensionable public-sector employment can also involve different EPF treatment. Employers dealing with public-sector or pensionable categories should review the specific provisions of the EPF Act rather than applying private-sector contribution rules automatically.
EPF Contribution Rates for 2026
The current EPF rates used in 2026 are based on the Third Schedule effective from the October 2025 salary or wage period.
Malaysian Employees Below Age 60
For Malaysian citizens below 60 years old:
For monthly wages of RM5,000 and below, the employee share is 11% and the employer rate is 13%.
For monthly wages of more than RM5,000, the employee share remains 11%, while the employer rate is 12%.
However, these percentages should not normally be applied directly to wages of RM20,000 or below. The official Third Schedule wage table must be used.
Malaysian Employees Aged 60 and Above
For Malaysian citizens aged 60 and above, the employee statutory share is 0%, while the employer share is 4%.
Again, where wages are RM20,000 or below, employers should use the appropriate statutory wage range rather than simply multiplying the exact wage by 4%.
Permanent Residents Aged 60 and Above
For permanent residents and certain non-Malaysian employees who became EPF members before 1 August 1998, different rates apply after age 60.
Where monthly wages are RM5,000 or below, the employee contribution is 5.5% and the employer rate is 6.5%.
Where monthly wages exceed RM5,000, the employee rate is 5.5% and the employer rate is 6%.
Non-Malaysian Employees in 2026
For non-Malaysian employees who fall under the newer mandatory contribution regime and became EPF members from 1 August 1998 onwards, the standard 2026 rates are:
Employer contribution: 2%
Employee contribution: 2%
Total: 4% of monthly wages, subject to KWSP’s rounding rules.
This mandatory requirement took effect with the October 2025 salary period. Eligible non-Malaysian employees generally must be under age 75 and hold a valid passport and valid work pass. Domestic workers are excluded from this mandatory requirement.
Is There an EPF Salary Ceiling?
Unlike SOCSO and EIS, EPF does not have a normal monthly wage ceiling such as RM6,000.
EPF contributions continue to increase as wages increase.
For most Malaysian employees earning up to RM20,000, the official Third Schedule wage ranges apply.
Once wages exceed RM20,000, the contribution can be calculated using the applicable percentage rate specified in the Third Schedule.
Complete EPF Contribution Rate Table for 2026
The table below summarizes the complete contribution rate structure that employers need to determine which Third Schedule section applies.
| Employee Category | Monthly Wage | Employee Share | Employer Share | Total Rate |
|---|---|---|---|---|
| Malaysian below 60 | RM5,000 and below | 11% | 13% | 24% |
| Malaysian below 60 | Above RM5,000 | 11% | 12% | 23% |
| Malaysian age 60+ | Any wage | 0% | 4% | 4% |
| PR below 60 | RM5,000 and below | 11% | 13% | 24% |
| PR below 60 | Above RM5,000 | 11% | 12% | 23% |
| PR age 60+ | RM5,000 and below | 5.5% | 6.5% | 12% |
| PR age 60+ | Above RM5,000 | 5.5% | 6% | 11.5% |
| Certain non-Malaysians registered before 1 Aug 1998, below 60 | RM5,000 and below | 11% | 13% | 24% |
| Certain non-Malaysians registered before 1 Aug 1998, below 60 | Above RM5,000 | 11% | 12% | 23% |
| Certain non-Malaysians registered before 1 Aug 1998, age 60+ | RM5,000 and below | 5.5% | 6.5% | 12% |
| Certain non-Malaysians registered before 1 Aug 1998, age 60+ | Above RM5,000 | 5.5% | 6% | 11.5% |
| Non-Malaysians registered from 1 Aug 1998 | Any wage | 2% | 2% | 4% |
These are the statutory rate categories currently published by KWSP. Employers should still use the Third Schedule table where the schedule requires wage-range lookup rather than direct multiplication.
EPF Statutory Wage Table for Common Payroll Amounts
For Malaysian employees below age 60, the official table uses wage bands. Up to RM5,000, the bands generally move in RM20 increments. Above RM5,000 and up to RM20,000, the table moves through broader statutory wage ranges.
The following rows show the exact contribution amounts for common monthly wages:
| Monthly Salary / Wage Range | Employee Contribution | Employer Contribution | Total |
|---|---|---|---|
| RM1,480.01–RM1,500.00 | RM165 | RM195 | RM360 |
| RM2,480.01–RM2,500.00 | RM275 | RM325 | RM600 |
| RM3,480.01–RM3,500.00 | RM385 | RM455 | RM840 |
| RM4,980.01–RM5,000.00 | RM550 | RM650 | RM1,200 |
| RM5,000.01–RM5,100.00 | RM561 | RM612 | RM1,173 |
| RM5,100.01–RM5,200.00 | RM572 | RM624 | RM1,196 |
| RM5,200.01–RM5,300.00 | RM583 | RM636 | RM1,219 |
| RM5,300.01–RM5,400.00 | RM594 | RM648 | RM1,242 |
| RM5,400.01–RM5,500.00 | RM605 | RM660 | RM1,265 |
| RM5,500.01–RM5,600.00 | RM616 | RM672 | RM1,288 |
| RM5,600.01–RM5,700.00 | RM627 | RM684 | RM1,311 |
| RM5,700.01–RM5,800.00 | RM638 | RM696 | RM1,334 |
| RM5,800.01–RM5,900.00 | RM649 | RM708 | RM1,357 |
| RM5,900.01–RM6,000.00 | RM660 | RM720 | RM1,380 |
| RM6,000.01–RM6,100.00 | RM671 | RM732 | RM1,403 |
| RM6,100.01–RM6,200.00 | RM682 | RM744 | RM1,426 |
| RM6,200.01–RM6,300.00 | RM693 | RM756 | RM1,449 |
| RM6,300.01–RM6,400.00 | RM704 | RM768 | RM1,472 |
| RM6,400.01–RM6,500.00 | RM715 | RM780 | RM1,495 |
| RM6,500.01–RM6,600.00 | RM726 | RM792 | RM1,518 |
| RM6,600.01–RM6,700.00 | RM737 | RM804 | RM1,541 |
| RM6,700.01–RM6,800.00 | RM748 | RM816 | RM1,564 |
| RM6,800.01–RM6,900.00 | RM759 | RM828 | RM1,587 |
| RM6,900.01–RM7,000.00 | RM770 | RM840 | RM1,610 |
| RM7,900.01–RM8,000.00 | RM880 | RM960 | RM1,840 |
| RM9,900.01–RM10,000.00 | RM1,100 | RM1,200 | RM2,300 |
| RM19,900.01–RM20,000.00 | RM2,200 | RM2,400 | RM4,600 |
The statutory table itself contains many more wage bands. For production payroll systems, employers should use the complete EPF Act 1991 Third Schedule effective 1 October 2025 rather than relying only on a summary table.
A particularly important point appears around the RM5,000 threshold. An employee earning exactly RM5,000 falls in the 13% employer-rate category, producing an employer contribution of RM650. An employee earning slightly above RM5,000 moves into the 12% employer-rate structure, so the contribution pattern changes. Payroll software should therefore follow the statutory table exactly rather than applying a rough formula.
How to Calculate EPF Contribution
Step 1: Identify Whether the Worker Is an Employee
Confirm that the individual works under a contract of service or apprenticeship and falls within the EPF contribution requirements.
Do not determine EPF status only from a job title. Review the employment relationship.
Step 2: Determine Citizenship and EPF Category
Identify whether the worker is a Malaysian citizen, permanent resident, older non-Malaysian EPF member or a non-Malaysian employee covered by the 2% mandatory contribution regime.
This step is essential because contribution rates differ significantly.
Step 3: Determine the Employee’s Age
Check whether the employee is below 60 or has reached age 60.
The employee and employer contribution rates may change once the employee reaches 60.
The maximum general contribution age is 75.
Step 4: Calculate EPF-Contributable Wages
Determine the wage elements that are subject to EPF.
KWSP includes salary or wages, bonuses, allowances, commissions, incentives, salary arrears, payment for unused annual or medical leave, paid maternity leave, paid study leave and certain other payments made under the employment relationship.
Step 5: Remove Payments That Are Not EPF Wages
Overtime is generally not subject to EPF contribution.
Other exclusions include service charges, gratuity, retirement benefits, retrenchment benefits, termination-related payments, payment in lieu of notice and travelling allowance or travelling concessions.
Step 6: Select the Correct Third Schedule Part
For a normal Malaysian employee below age 60, use Part A.
For qualifying permanent residents and older categories, the relevant Third Schedule part depends on age and status.
For Malaysian citizens age 60 and above, use the applicable age-60 schedule.
For many non-Malaysian employees under the new contribution framework, use Part F.
Step 7: Use the Wage Band if Wages Are RM20,000 or Below
Do not calculate the contribution by multiplying the exact salary by 11%, 12% or 13%.
KWSP specifically states that employers are not allowed to use exact percentage calculations for the normal schedules unless wages exceed RM20,000.
Step 8: Use the Percentage Method Above RM20,000
Where monthly wages exceed RM20,000, calculate the contribution using the percentage stated for the applicable category.
For a Malaysian employee below age 60 earning above RM20,000, this means 12% employer contribution and 11% employee contribution.
The total contribution, including any amount, must be rounded up to the next ringgit where required.
PF Calculation Examples for 2026
Example 1: RM1,500 Monthly Salary
Assume the employee is a Malaysian citizen below age 60 and the full RM1,500 is EPF-contributable wages.
The correct wage band is RM1,480.01 to RM1,500.00.
Employee contribution: RM165
Employer contribution: RM195
Total EPF contribution: RM360.
The result happens to align with 11% and 13% in this example, but payroll should still retrieve the statutory amount from the Third Schedule.
Example 2: RM2,500 Monthly Salary
For RM2,500 in EPF wages:
Employee contribution: RM275
Employer contribution: RM325
Total contribution: RM600.
Example 3: RM3,500 Monthly Salary
For RM3,500 in EPF wages:
Employee contribution: RM385
Employer contribution: RM455
Total EPF contribution: RM840.
Example 4: RM5,000 Monthly Salary
For RM5,000 in EPF wages:
Employee contribution: RM550
Employer contribution: RM650
Total contribution: RM1,200.
The employee remains in the RM5,000-and-below employer-rate category.
Example 5: RM6,000 Monthly Salary
For RM6,000 in wages, the employer rate category is 12%, but the statutory table must be used.
Employee contribution: RM660
Employer contribution: RM720
Total EPF contribution: RM1,380.
Example 6: RM10,000 Monthly Salary
For wages of RM10,000:
Employee contribution: RM1,100
Employer contribution: RM1,200
Total contribution: RM2,300.
Example 7: RM21,250 Monthly Salary
Because the salary exceeds RM20,000, exact percentage calculation is allowed.
Employer contribution:
RM21,250 × 12% = RM2,550.00
Employee contribution:
RM21,250 × 11% = RM2,337.50
Combined amount:
RM4,887.50
Under KWSP’s rounding approach, the total contribution becomes RM4,888.
Example 8: Non-Malaysian Employee Earning RM3,250
Assume the employee falls under the 2% employee and 2% employer foreign-worker contribution regime.
Employer contribution:
RM3,250 × 2% = RM65
Employee contribution:
RM3,250 × 2% = RM65
Total contribution: RM130.
Employer Responsibilities for EPF
An employer must register with EPF within seven days from the date the employer becomes liable to contribute after hiring an employee.
Employers must also register employees who are not already EPF members before making their first contribution. Registration can be completed through i-Akaun (Employer), and some Malaysian citizens and permanent residents may be registered through the contribution process itself.
During payroll, the employer must determine EPF-contributable wages, deduct the employee share, calculate the employer share and remit both amounts to KWSP.
The employer initially pays the full contribution to KWSP and then recovers the employee portion through the payroll deduction made from the employee’s wages. The employer must never recover its own statutory share from the employee.
Employers should also maintain accurate payroll and contribution records, update employee information when circumstances change and provide payslips showing the relevant EPF deduction.
EPF Contribution Payment Deadline
EPF contributions for a salary month must be paid on or before the 15th day of the following month.
For example, if an employee receives wages for September 2026, the contribution month is October 2026 and the employer must remit the contribution by 15 October 2026.
KWSP describes the contribution month as the month in which payment becomes due for the previous month’s wages.
Employers should therefore configure payroll calendars around both the salary month and statutory remittance month.
How Employers Submit EPF Contributions
Employers can manage contributions through KWSP i-Akaun (Employer) and related EPF online services.
The normal process involves preparing employee contribution data, checking each employee’s wages and statutory share, submitting contribution information and completing payment through an accepted payment method.
KWSP also supports online contribution channels and employer services designed to reduce manual submission work.
For businesses with many employees, payroll software can prepare contribution data in a format that makes review and submission easier, but employers remain responsible for ensuring that the information submitted to KWSP is correct.
Late Payment, Penalties and Non-Compliance
Late EPF contributions are treated as outstanding contributions.
KWSP may impose a late payment charge and require payment of dividends relating to delayed contributions. The published late payment charge is based on the lower dividend rate between Simpanan Konvensional and Simpanan Shariah for the applicable year, plus one percentage point. The minimum late payment charge is RM10.
The EPF Act also provides statutory penalties for serious non-compliance.
An employer that fails to register with EPF within the required seven-day period may face imprisonment of up to three years, a fine of up to RM10,000, or both.
Failure to pay contributions by the statutory deadline may also carry imprisonment of up to three years, a fine of up to RM10,000, or both.
An employer that deducts the employee contribution but fails to remit it to EPF may face imprisonment of up to six years, a fine of up to RM20,000, or both.
The same maximum penalty can apply where an employer improperly deducts part of the employer contribution from an employee’s wages.
These are statutory maximum penalties. Actual enforcement action depends on the circumstances of the case.
Benefits of EPF to Employees
EPF is designed primarily to build long-term retirement savings.
Monthly contributions from the employee and employer accumulate in the employee’s EPF account and may earn annual dividends declared by KWSP.
EPF savings are divided across accounts designed for different financial needs. Under the current EPF account structure, members may have retirement-focused savings as well as funds that can be used for approved purposes under KWSP withdrawal rules.
Eligible members may be able to use EPF savings for matters such as housing, education, healthcare and other approved financial needs, depending on the account and withdrawal requirements.
For employees, the main value of EPF is that retirement savings grow through regular payroll contributions rather than relying entirely on voluntary savings.
EPF vs SOCSO in Malaysia
EPF and SOCSO are both important Malaysian payroll obligations, but they serve very different purposes.
| Area | EPF / KWSP | SOCSO / PERKESO |
|---|---|---|
| Main purpose | Retirement and long-term savings | Social security protection |
| Administered by | Employees Provident Fund | Social Security Organization |
| Main legislation | EPF Act 1991 | Employees’ Social Security Act 1969 |
| Employee contribution | Generally 11% for Malaysian employees below 60 | Based on statutory SOCSO schedule |
| Employer contribution | Generally 13% or 12% for Malaysian employees below 60 | Based on statutory SOCSO schedule |
| Salary ceiling | No normal wage ceiling | RM6,000 contribution ceiling |
| Calculation method | Statutory wage ranges up to RM20,000; percentage above RM20,000 | Statutory wage bands |
| Main benefit | Retirement savings and approved withdrawals | Employment injury and invalidity protection |
| Foreign employee rules | Mandatory 2% + 2% for many foreign employees from Oct 2025 | Separate PERKESO foreign-worker rules |
Employers should never treat EPF and SOCSO as interchangeable deductions. Both need separate payroll calculations and separate statutory configuration.
Common EPF Payroll Mistakes
Using Exact Percentages Instead of the Third Schedule
This is one of the most common EPF errors.
For wages of RM20,000 or below, employers should use the official wage table rather than calculate 11%, 12% or 13% directly.
KWSP even provides an example showing that a RM3,250 salary produces an employer amount of RM424 and employee amount of RM359 using the statutory table, compared with RM423 and RM358 if the employer incorrectly calculates the exact percentages.
Using the Wrong Employer Rate Around RM5,000
A Malaysian employee below 60 earning RM5,000 or less falls under the 13% employer structure.
Once monthly wages exceed RM5,000, the normal employer rate changes to 12%.
Payroll systems should therefore identify the correct threshold before calculating the contribution.
Treating Overtime as EPF-Contributable Wages
Unlike SOCSO, overtime payment is generally excluded from EPF wages.
Payroll teams should map overtime separately instead of adding it to the EPF contribution base.
Excluding Bonuses or Allowances That Are Subject to EPF
Bonuses, commissions, incentives and many allowances may be subject to EPF.
Employers should review each pay component according to KWSP’s wage definition rather than assuming only basic salary is contributable.
Forgetting the October 2025 Foreign Employee Rules
From October 2025 wages, many non-Malaysian employees became subject to mandatory EPF contributions of 2% from the employer and 2% from the employee.
A payroll system using older foreign-worker rules can therefore produce incorrect 2026 payroll results.
Applying the 11% Employee Rate After Age 60
Malaysian citizens who have reached age 60 generally have a 0% statutory employee contribution and 4% employer contribution.
Age should therefore be a payroll calculation input, not merely an HR profile field.
Assuming EPF Has a Salary Ceiling
EPF does not stop at RM6,000 or another SOCSO-style ceiling.
Contributions continue as wages rise, and direct percentage calculation applies above RM20,000 for the relevant schedules.
Missing New Employees
Employers must register with EPF within the statutory period and ensure new employees are registered when required.
Onboarding and payroll should therefore be connected so that new hires are not omitted from contribution files.
Paying After the 15th
Processing payroll correctly is not enough if the contribution is submitted late.
Employers should build the 15th-day deadline into their monthly payroll compliance calendar.
How Payroll Software Can Help With EPF Compliance
EPF calculation involves more rules than a simple percentage field.
A payroll system can help determine the correct employee category, age group, citizenship status, contributable wage amount and statutory contribution band before calculating the employee and employer shares.
It can also distinguish between EPF-contributable payments such as salary, allowances and bonuses and non-contributable items such as overtime or certain termination payments.
Payroll software can maintain current contribution tables, generate monthly EPF reports, store employee registration details and help HR and finance teams review statutory deductions before submission.
For employers with Malaysian and foreign employees in the same payroll, this becomes especially useful because different EPF contribution rules may apply within the same pay cycle.
PayDay Malaysia can support employers by bringing employee records, payroll calculations and Malaysian statutory contribution workflows into one payroll process.
Frequently Asked Questions About EPF Contribution Malaysia 2026
What Is the EPF Rate in Malaysia for 2026?
For a Malaysian employee below age 60, the employee contribution is generally 11%. The employer rate is generally 13% where monthly wages are RM5,000 or below and 12% where wages exceed RM5,000. The statutory Third Schedule should be used for wages up to RM20,000.
How Is EPF Calculated in Malaysia?
First determine the employee category and EPF-contributable wages. Then locate the correct wage range in the Third Schedule. For normal Malaysian employees with wages above RM20,000, the applicable percentage calculation can be used.
What Is the Maximum Salary for EPF Contribution?
There is no standard EPF salary ceiling. Contributions continue to apply as monthly wages increase.
Does the Employer Contribute to EPF?
Yes. Employers are required to pay an employer contribution in addition to deducting the employee’s statutory share.
What Is the Employer EPF Rate for Salary Below RM5,000?
For a Malaysian employee below age 60, the normal employer rate is 13% for monthly wages of RM5,000 or below. The actual contribution amount must normally be taken from the statutory table.
What Is the Employer EPF Rate for Salary Above RM5,000?
For a Malaysian employee below age 60, the employer rate is generally 12% once monthly wages exceed RM5,000.
Are Foreign Employees Required to Contribute to EPF in 2026?
Yes, many non-Malaysian employees are now required to contribute. Mandatory coverage began with wages for October 2025. For employees covered by the new regime, the employer contributes 2% and the employee contributes 2%.
Is Overtime Included in EPF Wages?
Generally, no. KWSP lists overtime payment as a payment that is not subject to EPF contribution.
Are Bonuses Subject to EPF?
Yes. Bonuses are listed by KWSP as payments subject to EPF contribution.
When Is the EPF Payment Deadline?
EPF contributions must normally be paid on or before the 15th day of the month following the salary month.
What Happens if an Employer Pays EPF Late?
The employer may be charged a late payment charge and dividends on overdue contributions. Statutory penalties can also apply for failure to remit contributions on time.
What Happens to EPF After Age 60?
For Malaysian employees age 60 and above, the normal statutory employee share becomes 0% and the employer contribution is 4%. Other categories, such as permanent residents, may follow different age-60 rates.
