What Is EPF & KWSP?

nbc-epf-kwspEPF stands for Employees Provident Fund and also common known as KWSP or Kumpulan Wang Simpanan Pekerja in Malaysia.

Every company is required to contribute EPF for its staff/workers and to remit the contribution sum to KWSP before the 15th day of the following month. Failing to submit within the stipulated period will result in late penalty charged by KWSP.

The mandatory contributions based on the employee’s pay are as follows:

  • Employer (company)
    – 13% for any wages less than RM5,000
    – 12% for any wages more than RM5,000
  • Employee (staff / workers) – 11%

Voluntarily to contribute more than the statutory requirement (12%-13%) by the company for its employees are encouraged by the Government where a tax deduction will be given for such extra contribution by the company.

The employers’ contributions are tax deductible up to 19% of the employee’s pay.

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  • I’m working in hospitality as a reservation.
    Does EPF deducted when basic salary plus service point?
    Or Basic salary minus EPF ?
    For example: Basic salary = RM700, service points = RM125, EPF = 11%

    Is it (RM700 + RM125) -11% OR RM700-11% only?

    Thank you.

    • Hi Amira, may I know what is the definition of service point?

      Is it a part of remuneration package where you will entitle if you have performed your duty upon call up? Is it kind of reward arising from your performance of duty in work?

      Whatever the above other than Service Charge, Overtime or Travelling allowance, if it is related to your employment, then it is subject to EPF.

      Let’s take an example, the sales commission of RM3,000 for salesman who is only receiving basic salary of RM1,500 is subject to EPF & SOCSO.

      For more details, please visit: All payments for wages are subject to EPF contributions

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