EPF Contribution Rates 2025: Complete Employer & Employee Guide
Understanding KWSP contribution rates, Third Schedule, and compliance requirements
Why Malaysian SMEs Choose HavaHR Payroll
Accurate EPF calculations using Third Schedule
Avoid late payment penalties
Proper handling of age-based rates
Correct optional rate elections
Compliance with EPF Act 1991
Automated rate updates
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EPF rates 2025: Employee 11% (or 9% optional), Employer 13% (≤RM5,000 salary) or 12% (>RM5,000). Age 60+: Employee 0% (voluntary), Employer 4%. No wage ceiling. Due by 15th monthly. Use Third Schedule for exact amounts.
This comprehensive guide covers EPF contribution rates for 2025, including employee and employer rates, age-based variations, Third Schedule usage, and payment deadlines.
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Frequently Asked Questions
What is the EPF contribution rate in Malaysia 2025?
EPF contribution rates 2025: Employees contribute 11% of wages (or optional 9% for salary >RM5,000). Employers contribute 13% for wages ≤RM5,000 or 12% for wages >RM5,000. Rates are calculated on total wages including allowances.
What is the EPF employee contribution rate?
Standard employee EPF rate is 11% of monthly wages. Employees earning more than RM5,000 can opt for reduced 9% rate by submitting Form KWSP 17A (Khas 2021). This election is valid until revoked.
What is the EPF employer contribution rate?
Employer EPF contribution: 13% for employees earning RM5,000 or below per month, 12% for employees earning above RM5,000 per month. Employer contribution is additional to employee salary, not deducted from wages.
What is the EPF rate for employees above 60?
For employees aged 60 and above: Employee contribution is 0% (voluntary up to 5.5%). Employer contribution is reduced to 4% regardless of salary level. Employee may opt for higher voluntary contribution.
What wages are subject to EPF contribution?
EPF is calculated on all wages: basic salary, fixed allowances (housing, transport, meal), overtime pay, commissions, bonuses, and incentives. Directors' fees and benefits-in-kind have specific treatment.
Is there a maximum EPF contribution limit?
No maximum wage ceiling for EPF contributions - the percentage applies to total wages. However, for tax relief purposes, employee EPF is capped at RM4,000 per year. There's no cap on employer contribution.
What is the EPF Third Schedule?
EPF Third Schedule (Jadual Ketiga) is the official contribution table used to determine exact EPF amounts based on wage bands. It ensures consistent calculations across all employers. Payroll software uses this for accuracy.
How do I calculate EPF for partial month?
For partial month (new joiner/leaver): Calculate based on actual wages paid in that month. Use Third Schedule to find contribution amount for the wage paid. No pro-rata calculation on percentage - use table lookup.
When must EPF be paid to KWSP?
EPF contributions must be remitted to KWSP by the 15th of the following month. Example: January contributions due by 15th February. Late payment incurs dividend loss and penalties.
What is the penalty for late EPF payment?
Late EPF payment penalty: Loss of annual dividend (typically 5-6%) on the late amount, plus administrative charges. Persistent non-payment can lead to prosecution under EPF Act 1991 with fines up to RM10,000 or imprisonment.