Employees Provident Fund (EPF)


What Is Employees Provident Fund (EPF)?

The Employees Provident Fund (EPF) is a social security institution formed according to the Laws of Malaysia, Employees Provident Fund Act 1991 (Act 452) which provides retirement benefits for members through management of their savings in an efficient and reliable manner. The Employees Provident Fund (EPF) also provides a convenient framework for employers to meet their statutory and moral obligations to their employees.
A contribution constitutes the amount of money credited to members' individual accounts in the Employees Provident Fund (EPF). The amount is calculated based on the monthly wages of an employee. Current contribution rate is in accordance with wage/salary received. For employees who receive wages/salary of RM5,000 and below, the portion of employee's contribution is 11% (9% for Jan - Jun 2022) of their monthly salary while the employer contributes 13%. For employees who receive wages/salary exceeding RM5,000 the employee's contribution of 11% remains, while the employer's contribution is 12%.

Update during COVID-19 Period

In order to reduce the financial burden of public, the EPF has reduced the contribution rate for employees

In 2020: Employee contribution rate is 7%
In 2021: Employee contribution rate is 9%
In 2022: Employee contribution rate is 9% for Jan - Jun, 11% afterwards

If any employee wishes to remain at 11%, form application is needed.

Persons Obligated to Contribute Employees Provident Fund (EPF)

Except for the persons mentioned in the 1st Schedule of the EPF Act 1991, an employer shall be liable to pay EPF contributions in respect of any person whom he has engaged to work under a Contract Of Service or Apprenticeship and includes:
  • Part time, temporary and probationary employees
  • Directors who receive wages from company;
  • Employees until the age of 75 years old if they are still working regardless whether they have or have not made the full withdrawal/part of it after attaining the age 55 or 60 years old;
  • Employees who have withdrawn their savings under the Pensionable Employees and Optional Retirement Withdrawal, and work with employers other than the Federal or State Governments, or any statutory bodies or local authorities;
  • Employees who have previously made full withdrawal under the Incapacitation Withdrawal and have since recovered and are re-employed in any service.
Minimum Age: Employment age is subject to Children and Young Persons (Employment) Act 1966.
Maximum Age: 75 years

Person Not Obligated To Contribute Employees Provident Fund (EPF)

Persons stipulated in the First Schedule of the EPF Act 1991 who are exempted from making a contribution are as follows:
  1. Nomadic aborigines unless recommended in certain cases by the Director-General of the Department of Aborigines;
  2. Domestic servants as defined under Section 3 of the Workmen's Compensation Act 1952 [Act 273], for example maid, cook, house guard, gardener and personal driver EXCEPT when hired: 
  • by any employer as stated in the Second Schedule of the Act;
  • by an association already registered or required to register under any written law currently in force with respect to the registration of associations - or co-operative bodies;
  • in any business registered or licensed or required to be registered or licensed under the Registration of Businesses Act 1956 [Act 197], Trades Licensing Ordinance for the State of Sabah [Sabah Chapter 144], Business, Profession and Trade Licensing Ordinance for the State of Sarawak [Sarawak Chapter 33], or Business Names Ordinance for the State of Sarawak [Sarawak Chapter 64], as the case may be; or
  • by corporations incorporated under any written laws
  1. Out-workers (as defined under Section 3 of the Workmen's Compensation Act 1952 [Act 273] );
  2. Persons detained in any prison, Henry Gurney School, detention centre, mental hospital or rehabilitation centre defined under the Drug Dependants (Treatment and Rehabilitation) Act 1983 or leprosariums;
  3. Members of the administration (refer to Article 160 of the Federal Constitution);
  4. Expatriates whose country of domicile is outside Malaysia (foreign citizens) and who elect not to contribute;
  5. Employees who have attained 75 years of age.

Salary / Wages Required To Contribute Employees Provident Fund (EPF)

All remuneration in money due to an employee under his contract of service or apprenticeship whether it was agreed to be paid monthly, weekly, daily or otherwise.
Among the payments that are liable for EPF contribution:
  • Salary
  • Payment for unutilised annual or medical leave
  • Bonus
  • Allowance
  • Commission
  • Incentive
  • Arrears of wages
  • Wages for maternity leave
  • Wages for study leave
  • Wages for half day leave
  • Other payments under services contract or otherwise

Among the payments not liable for EPF contribution:
  • Service charges
  • Overtime payment
  • Gratuity
  • Retirement benefits
  • Retrenchment, temporary and lay-off termination benefits
  • Any travelling allowance or the value of any travelling concession
  • Payment in lieu of notice of termination of employment
  • Director's fee

What We Can Help You?

Payroll can be a real headache for every size of business from one man or woman bands through to large companies. Just because you only have a few employees doesn’t mean that you’ll find payroll simple.
Staying up to date with ever-changing payroll legislation can be a real challenge, but you don’t have to work that way. When you choose to outsource your payroll to us, you can rest assured that your payroll is in safe hands.
Themis will provide you with assistance regarding Malaysia laws and regulations as well as payment facilities. When you choose to work with us, you can rest assured that you are working within the Malaysia regulations.
Our professional staff will assist our clients with:
  • The preparation and submission of all forms and returns on a timely basis;
  • The computation of payroll whilst ensuring all necessary deductions have been deducted;
  • Pass the payroll information to person in charge of business account;
  • Advice on the rules and regulations update related to payroll.

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