If you employ anyone in Malaysia, even one part-timer, you have to contribute to the Employees Provident Fund or Kumpulan Wang Simpanan Pekerja (EPF) every month. EPF is the national retirement savings scheme that employers and employees pay into from each month's wages.
This guide sets out the EPF contribution rate for employers in Malaysia, how to work out the amounts, and what happens if you pay late. The rates for Malaysian staff have barely moved, but since October 2025 EPF has also been compulsory for most foreign employees.
The quick answer: Malaysian employers pay EPF at 13% of monthly wages for Malaysian employees under 60 earning RM5,000 or less, and 12% above RM5,000, while deducting 11% from the employee. For Malaysian employees aged 60 and above, employers pay 4% and deduct nothing. For most foreign employees, employer and employee each pay 2%. Payment is due by the 15th of the following month.
1. What is the EPF contribution rate for employers in Malaysia?
The employer rate is 13% for Malaysian employees under 60 earning RM5,000 or less, 12% for those earning more, 4% for those aged 60 and above, and 2% for most foreign employees.
These rates, the current kadar caruman KWSP, have applied since October 2025 wages (paid in November 2025). The table below shows the employer and employee shares for each category of employee.
| Employee category | Monthly wages | Employer | Employee |
|---|---|---|---|
| Malaysian citizen, under 60 | RM5,000 and below | 13% | 11% |
| Malaysian citizen, under 60 | Above RM5,000 | 12% | 11% |
| Malaysian citizen, 60 and above | Any amount | 4% | 0% |
| Permanent resident, or foreign employee who joined EPF before 1 August 1998, under 60 | RM5,000 and below | 13% | 11% |
| Permanent resident, or foreign employee who joined EPF before 1 August 1998, under 60 | Above RM5,000 | 12% | 11% |
| Permanent resident, or foreign employee who joined EPF before 1 August 1998, 60 and above | RM5,000 and below | 6.5% | 5.5% |
| Permanent resident, or foreign employee who joined EPF before 1 August 1998, 60 and above | Above RM5,000 | 6% | 5.5% |
| Foreign employee who joined from 1 August 1998 | Any amount | 2% | 2% |
2. How do you work out the EPF amount?
For wages up to RM20,000, you look up the amount in the Third Schedule rather than multiplying the wage by the rate. The Third Schedule is the official table of contribution amounts in the Employees Provident Fund Act 1991.
The table is set out in wage bands. Up to RM5,000 the bands are RM20 wide, and above that they are RM100 wide. The contribution is based on the top of the band.
For wages above RM20,000, you apply the percentage directly. Any amount with cents is rounded up to the next ringgit, because contributions are paid in whole ringgit only.
Payroll software normally applies these rules for you. It is still worth checking that yours uses the October 2025 schedule. If you would rather not track schedule changes yourself, a payroll management service can run the monthly calculations for you.
3. Do you have to pay EPF for foreign workers?
Yes. From October 2025 wages, EPF is mandatory for most non-Malaysian employees, and the first payment was due by 15 November 2025.
Who is covered. Foreign employees are covered if they:
- hold a valid passport and a valid work pass
- work under a contract of service or apprenticeship
- are paid in money by an employer registered in Malaysia
- are under 75
This includes Employment Pass and Visitor's Pass (foreign worker) holders, among others. Part-time, contract and temporary staff are covered too.
Who is excluded. Domestic workers (such as maids, cooks, gardeners and family drivers), staff of embassies and foreign government offices, and employees aged 75 and above are excluded. Contributions for domestic workers are optional.
Rates. You and the employee each pay 2%, at any age and any wage. The wage used must be at least the national minimum wage in force at the time. Budget 2027 has announced a change to it, covered in section 8.
Registration. EPF registered many Employment Pass and work permit holders automatically, using Immigration Department data. If an employee isn't registered yet, you can register them in i-Akaun (Employer), or they can register at any EPF office.
Your obligation ends when the employee reaches 75, dies or leaves your employment. If a work pass is not renewed, it ends two months before the pass expires.
4. Who must register and contribute?
Every employer with at least one employee must register with EPF within seven days of hiring their first employee.
You contribute for anyone under a contract of service or apprenticeship. That includes permanent, contract, part-time, temporary and probationary staff, and directors who draw a salary. There is no minimum headcount.
The table below shows which payments count as wages for EPF.
| Attracts EPF | Does not attract EPF |
|---|---|
| Basic salary | Overtime |
| Bonuses | Service charges |
| Commissions and incentives | Gratuity |
| Most allowances | Retirement and retrenchment benefits |
| Arrears of wages | Termination benefits |
| Payment for unused annual or medical leave | Payment in lieu of notice |
You may deduct the employee's share only from that month's wages. You must never deduct your own share from their pay, as that is a separate offence.
5. When is EPF due and how do you pay?
EPF contributions for a month's wages are due on or before the 15th of the following month. For example, October 2026 wages must be paid by 15 November 2026.
i-Akaun (Employer) is EPF's online portal for employers, sometimes called i-Akaun Majikan. Most employers pay through it. There you submit Form A, which is the monthly list of employees and the amounts paid for each, and pay in the same step by internet banking, FPX or direct debit.
You can also use i-Akaun (Employer) to register new employees, download payment receipts and check any late charges. Payment is also possible at selected bank agent counters.
6. What happens if you pay EPF late?
If you miss the deadline, EPF adds a late payment charge and, in some cases, a late payment dividend.
A late payment charge (LPC) is a charge EPF sets under section 49 of the EPF Act 1991, with a minimum of RM10. EPF's online calculator in i-Akaun (Employer) shows the exact amount.
A late payment dividend is an extra charge that makes up the returns your employees lost. EPF applies it if you pay after the 1st of the following month.
Beyond the charges, the EPF Act sets these criminal penalties:
- Failing to register, or failing to pay on time: a fine of up to RM10,000, up to three years' imprisonment, or both.
- Deducting the employee's share and not paying it to EPF: a fine of up to RM20,000, up to six years' imprisonment, or both.
- Deducting your own share from the employee's wages: the same penalty of up to RM20,000, six years, or both.
EPF can also take court action to recover unpaid contributions.
7. What about SOCSO and EIS?
The Social Security Organisation or Pertubuhan Keselamatan Sosial (SOCSO) runs other monthly contributions you pay alongside EPF, with the same 15th-of-the-month deadline. SOCSO contributions cover employees for work injuries and invalidity. The Employment Insurance System (EIS) gives support to employees who lose their jobs.
These are paid through SOCSO's own portal, not EPF.
Lindung 24 Jam is a newer scheme that has covered employees for accidents outside work, such as at home or during personal travel, since 1 June 2026.
8. How will the 2027 minimum wage change affect EPF?
A higher minimum wage raises the EPF, SOCSO and EIS you pay for staff on or near that wage.
Budget 2027, tabled on 9 October 2026, announced a national minimum wage of RM2,000 a month from June 2027. Micro, small and medium enterprises (MSMEs) that fulfil the criteria, including annual sales under RM50 million, are exempt for now.
For employers who must apply the new rate, contributions go up with it. That includes foreign staff, because their EPF is worked out on at least the minimum wage.
Frequently asked questions
Is EPF compulsory for part-time staff in Malaysia?
Yes. EPF covers anyone employed under a contract of service, whether full-time, part-time, temporary or on probation. The same rates apply as for full-time staff.
Do employers pay EPF on overtime?
No. Overtime, service charges, gratuity and termination benefits don't attract EPF. Bonuses, commissions and most allowances do.
Can an employee contribute more than 11% to EPF?
Yes. An employee can ask the employer to deduct more than the statutory rate, and the employer can also choose to pay more than its share.
Do I have to pay EPF for a company director?
Yes, if the director draws a salary under a contract of service. EPF treats a salaried director like any other employee, so the normal rates and the 15th-of-the-month deadline apply.
Getting your monthly EPF right
Every employer in Malaysia, however small, has to pay EPF on the right wages, at the right rate and by the 15th of each month, alongside SOCSO and EIS. Centry's payroll service handles monthly EPF, SOCSO and EIS submissions for its clients, keeping each employee's category, age and wages up to date so contributions stay correct as rates and the minimum wage change. Get in touch with us to get your payroll compliance in order.
