All payments for wages are subject to EPF deductions


Employers are legally required to contribute EPF for all payments of wages paid to the employees.

Rate of Contributions
The current rates are 11% for the employee and 12% for the employer, but employers are advised to keep abreast with changes which may take place from time to time. 

In accordance with the proposal made in the Budget 2012, the contribution rate for staff earning less than RM5,000 will be 11% for the employee and 13% for the employer, with effective from 1 January 2012.

The amount of contributions must be rounded up to the next Ringgit, and contributions for a particular month must be paid before or on the 15th of that month.


  • Employee A, whose wages for a month is RM1,000, the rate of contributions is RM110.00 for the employee’s share and RM130 for the employer’s share.
  • Contributions for the month of February which is deduction from the January wages must be received by the EPF together with the Form EPF 6 (Form A) for February before or on 15 February.

Deduction of salary for the employee’s share of EPF contribution can only be made at the time when his/her wage is paid.

Late Contributions
Late contributions are contributions for a certain month which are received by the EPF after the 15th of that month. They include arrears of contributions and contributions for a certain month/period that have been under paid.

For payment of arrears of contributions, employers are required to use the Form EPF 7 (Form E) and Form EPF 8 (Form F) except for contributions in respect of salary revision which are required to be paid together with the current monthly payment by using the same Form EPF 6 (Form A).

Late payment of contributions is subject to penalties.

Making Payments
Payment for EPF contributions can be made at KWSP counters; through Banks that have been appointed as collection agents; through the Internet; or by mail.

Remuneration that subject to EPF Deductions

Generally, all wages paid to the directors/staff/employee/workers are subject to EPF deductions. The payments by the employers subject to deductions are:

  1. Wages
  2. Wages in lieu of notice of termination of employment
  3. Payment for unutilised leaves (including annual & medical leave)
  4. Bonuses
  5. Allowances
  6. Commission
  7. Incentive
  8. Arrears of wages
  9. Wages for maternity leave
  10. Wages for study leave
  11. Wages for half pay leave
  12. Arrears for wages arising from salary revision
  13. Other payments under services contracts or otherwise.

Payments that are not subject to EPF deductions are as follows:

  1. Service charges
  2. Overtime payment
  3. Gratuity
  4. Retirement benefits
  5. Retrenchment, temporary and lay-off
  6. Any travelling allowances or the value of any travelling concession
  7. Director’s fees
  8. Any other remuneration or payment as may be exempted by the Minister
The above list is not exhaustive. If in doubt, please contact any nearest KWSP offices.