EPF Contribution: Employer’s Obligations in Malaysia

EPF is a savings fund that private sector employees and employers in Malaysia are obliged to contribute monthly. Although employees’ contribution comes from their salaries, it is actually the responsibility of employers to make the deductions from employees’ and remit to EPF on behalf of employees, whilst at the same time contribute their share to the each employee’s EPF account.

In April 2023, the mandatory rate of EPF contribution stands at:

  • 13% by employees;
  • 13% by employers for employees who earn RM5,000 per month or below; and
  • 12% by employers for employees who earn more than RM5,000.

Step 1: Calculate Salary for EPF

For EPF calculation, an employee’s salary is defined as income, excluding the following:

  • Service charge;
  • Overtime payment;
  • Gratuity;
  • Retirement benefit;
  • Retrenchment, temporary lay-off or termination benefits;
  • Traveling allowance or the value of any travel concession; and
  • Any other remuneration or payment as may be exempted by Ministry of Finance Malaysia.

Step 2: Employees’ Contribution

Once the salary is derived, multiply the amount with 11% in order to derive the amount of EPF contribution by employee (to be deducted from the employee’s salary.

Step 3: Employers’ Contribution

For employer’s contribution, multiply the salary amount derived in Step 1 the applicable rate (13% if the salary is RM5,000 or below, and 12% if the salary is above RM5,000).

Step 4: Remittance

As the employer, it’s your duty to make the remittance for employees’ and employer’s contribution to EPF (KWSP) by the 15th day of the following month. For example, for EPF contributions for January 2023, you are remit the contributions by 15 February 2023.

Many channels payments are available for EPF contributions.

The channels available are as follows:

e-Caruman– Maybank2u
– Financial Process Exchange (FPX)
– Direct Debit Authorisation (DDA)
Mobile App (e-Caruman)– Financial Process Exchange (FPX)
Internet Banking
Bank AgentsCash/Cheque/MyDebit Corporate Card/Debit transfers
– Bank Simpanan Nasional
– Maybank
– Public Bank
​​​​​​- RHB – Only payment via Debit Card and Debit transfers are accepted.
EPF countersCash/Cheque
– Alor Setar
– Ipoh
– Johor Bahru
– Kangar
– Kelantan
– Kota Bharu
– Kota Kinabalu
– Kuala Lumpur
– Kuala Terengganu
– Kuching
– Melaka
– Muar
– Seberang Jaya
– Seremban
– Shah Alam

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