Statutory · Updated July 2026
EPF (KWSP) Contribution Rates in Malaysia
In 2026, the standard EPF (KWSP) contribution is 11% of monthly wages from the employee and 13% from the employer for wages of RM5,000 or less, or 12% for wages above RM5,000. Malaysian employees aged 60 and above contribute 0%, with the employer paying 4%. Contributions are calculated on the KWSP Third Schedule wage bands and must be paid by the 15th of the following month.
Key facts
- Employee contribution: 11% of monthly wages (under age 60)
- Employer contribution: 13% for wages RM5,000 and below; 12% for wages above RM5,000
- Malaysians aged 60 and above: employer 4%, employee 0%
- Foreign workers: mandatory 2% employee + 2% employer, phased in from October 2025
- EPF-able wages include salary, bonus, allowances and commission; overtime pay is excluded
- Payment deadline: the 15th of the following month
EPF contribution rate table (2026)
Statutory EPF rates depend on the employee's age, citizenship and monthly wage band. The standard rates for 2026 are:
| Employee group | Monthly wages | Employee rate | Employer rate |
|---|---|---|---|
| Malaysian / PR, below age 60 | RM5,000 and below | 11% | 13% |
| Malaysian / PR, below age 60 | Above RM5,000 | 11% | 12% |
| Malaysian, age 60 and above | Any | 0% | 4% |
| Foreign worker (mandatory from Oct 2025) | Any | 2% | 2% |
Employees may voluntarily contribute above the statutory rate, and employers may also contribute more; the rates above are the statutory minimums applied by default in payroll.
Which payments are subject to EPF
EPF is calculated on wages as defined in the EPF Act 1991, which is wider than basic salary but narrower than every payment on a payslip. Getting this classification wrong is one of the most common payroll compliance errors in Malaysia.
| Subject to EPF | Not subject to EPF |
|---|---|
| Basic salary | Overtime pay |
| Bonus | Service charges |
| Allowances (in general) | Gratuity |
| Commission | Retrenchment / termination benefits |
| Arrears of wages, unutilised leave payments | Director's fees (non-service), benefits in kind |
How the Third Schedule wage bands work
Contributions are not calculated as an exact percentage of the actual wage. Instead, KWSP's Third Schedule groups wages into bands (generally in RM20 steps at lower wage levels and RM100 steps at higher levels) and prescribes a fixed ringgit contribution for each band. The percentage is applied to the upper limit of the band and rounded up to the next ringgit.
This means the amount payable is usually slightly higher than a straight percentage of the actual salary. For wages above the top of the Third Schedule (above RM20,000), the exact percentage is applied directly. Always take the final figures from the Third Schedule or from payroll software that implements it.
Payment deadline and how to pay
EPF contributions for a given month's wages must be received by KWSP by the 15th of the following month. For example, contributions on June wages are due by 15 July. Late payment attracts dividends owed to members plus late payment charges.
- Register as an employer with KWSP and obtain an employer number before hiring
- Submit contribution details and pay monthly via the i-Akaun (Employer) portal or approved payroll software
- Deduct the employee's share from wages for that month; an employer cannot recover missed employee deductions from wages more than 6 months later
Foreign workers: mandatory 2% + 2%
Historically, EPF was optional for non-Malaysian workers. Under Budget 2025 changes, EPF contributions became mandatory for foreign workers (excluding domestic workers) at 2% from the employee and 2% from the employer, phased in from October 2025. Employers of foreign workers must register them with KWSP and include them in monthly contribution submissions.
Worked example: RM3,000 monthly salary
EPF for a Malaysian employee under 60 earning RM3,000 per month
Wage band: RM3,000 falls in the Third Schedule band of RM2,980.01 to RM3,000.00
Employee share = 11% x RM3,000 = RM330.00
Employer share = 13% x RM3,000 = RM390.00 (wages RM5,000 and below)
Total credited to the member's EPF account = RM330.00 + RM390.00 = RM720.00
Employee's take-home pay is reduced by RM330.00; the employer bears RM390.00 on top of salary
Automating this with an HR system
An HR and payroll system like staffs.id applies the correct EPF rate automatically based on each staff member's age, citizenship and wage band, classifies each pay element as EPF-able or not (so overtime is excluded while bonus and commission are included), and computes the employee and employer shares per the Third Schedule every month.
Because staffs.id computes EPF, SOCSO, EIS and PCB in the same payroll run for both monthly-salaried full-timers and hourly part-timers, employers avoid manual band lookups and can pay KWSP before the 15th deadline with figures that already reconcile to payslips.
Frequently asked questions
What is the EPF contribution rate in Malaysia in 2026?
11% from the employee and 13% from the employer for monthly wages of RM5,000 and below, or 12% employer share for wages above RM5,000. Malaysians aged 60 and above pay 0%, with the employer contributing 4%.
Is overtime pay subject to EPF in Malaysia?
No. Overtime pay, service charges, gratuity and retrenchment benefits are excluded from EPF wages. Salary, bonus, allowances and commission are subject to EPF.
Is bonus subject to EPF deduction?
Yes. Bonuses are EPF-able wages, so both the employee's 11% and the employer's 12% or 13% apply to the bonus amount in the month it is paid.
When is the EPF payment deadline for employers?
Contributions must reach KWSP by the 15th of the month following the wage month. Late payments incur dividends and late payment charges.
Do foreign workers need to contribute to EPF in Malaysia?
Yes. From October 2025, EPF is mandatory for foreign workers (excluding domestic workers) at 2% from the employee and 2% from the employer.