EPF – Employees Provident Fund (KWSP)

What is EPF?

• Government Mandatory Deposits and Retirement Funds
• Usually 13% for the boss and 11% for the employee (adjusted   annually)

Example: Salary of RM2,000 for an employee

What doesn’t need to be given to EPF?

• Salary
• Payment for unutilized annual or medical leave
• Bonus
• Allowance
• Commission
• Incentive
• Arrears of wages
• Wages for maternity/ Study/ Half day leave
• Other payments under services contract or otherwise

What doesn’t need to be given to EPF?

• Service charges include Tips
• Overtime payment
• Gratuity (payment to employee payable at the end of a service period or upon voluntary resignation)
• Retirement benefits
• Retrenchment, temporary and lay-off termination benefits
• Travelling allowance or the value of any travelling concession
• Payment in lieu of notice of termination of employment
• Director’s fee
• Gifts, including cash payments for holidays like Hari Raya, Christmas, etc.
• Benefits-in-kind and nonmonetary perquisites

EPF Contribution Rate Malaysia as of Year 2021

Reminder :
The calculation of the contribution amount must follow the
Third Schedule of the EPF Act 1991. Also, try not to use the exact percentage for the contribution rate, except for those who have salary of more than RM20,000.

Source From: https://www.kwsp.gov.my/employer/contribution/all-about-your-responsibility

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