Every company is required to contribute EPF for its employees (made up from the employee's and employer's share) and to remit the contribution sum to KWSP before the 15th day of the following month. Failing to submit within the stipulated period will result in a late penalty charged by KWSP.
Effective from January 2018, the employees' monthly statutory contribution rates will be reverted from the current 8% to the original 11% for employees below the age of 60.
What are the minimum contribution rates?
(For Employees aged 60 years old and below)
1. Monthly salary of RM5,000* or less:
Employee contributes 11% of his monthly salary.
Employer contributes an amount equivalent to 13% of the employee's salary
(*Note: When the employer pays bonus to an employee who receives monthly wages of RM5,000.00 and below, and upon receiving the said bonus renders the wages received for that month to exceed RM5,000.00, the employer’s contribution shall be calculated at the rate of 13% of the amount of wages for the month. The total contribution which includes cents shall be rounded off to the next ringgit.)
2. Monthly salary greater than RM5,000:
Employee contributes 11% of his monthly salary.
Employer contributes an amount equivalent to 12% of the employee's salary
For the months where the wages exceed RM20,000.00, the contribution by the employee shall be calculated at the rate of 11% of the amount of wages for the month and the contribution by the employer shall be calculated at the rate of 12% of the amount of wages for the month. The total contribution which includes cents shall be rounded off to the next ringgit.
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(For Employees aged 60 years old and above and up to 75 years old)
As of January 2019, a new minimum statutory rate for employees above age 60 takes effect (Refer to this official KWSP announcement).
"The move to reduce the statutory contribution rates follows the Government’s proposal during the tabling of Budget 2019 on 2 November 2018, to help increase the take-home pay for employees who continue to work after reaching age 60"
Updated link can be found from EPF's website:
1. Monthly salary of RM5,000 or less:
Employee contributes 0% of his monthly salary.
Employer contributes an amount equivalent to 4% of the employee's salary
2. Monthly salary greater than RM5,000:
Employee contributes 0% of his monthly salary.
Employer contributes an amount equivalent to 4% of the employee's salary
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Additional Notes:
For employer and employee contribution that exceeds RM20,000, as not indicated in the Third Schedule, both EPF employee and employer contribution will be calculated based on the total amount of wages and do not need to round up during calculation. After the calculation, the contribution amount shall be rounded to the next ringgit, if the total contribution includes cents.
For total wages less than RM20,000 (Basic Salary + Bonus), EPF employee contribution needs to refer to the Third Schedule while EPF employer contribution will need to be multiplied by the contribution rate. After calculation, the total EPF contribution shall be rounded to the next ringgit (if includes cents).