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All About EPF Mandatory Contribution

 

All About EPF Mandatory Contribution

Who Obligated to Contribute EPF ?

  • Permanent, Contract, Part time, Temporary and Probationary employees
  • Directors who receive salary/wages from company
  • Employees who have made a 55 Years Withdrawal and are below 75 years old and still working in any occupation
  • Employees who have made full withdrawal under the Incapacitation withdrawal, have since recovered and are re-employed in any service
  • Employees who have made a Pensionable Employees and Optional Retirement Withdrawal and are working with employers
  • Employees who have made Pensionable Employees Withdrawal and were re-employed after the retirement age

Q:“Is a Part time worker  or employee who work with more than one employer  subject to EPF contribution?”

  • Yes, they are subject to EPF contribution

 

Q:“Is there  a liability  to contribute for a deceased  employee?

  • Employers are not liable to make any contribution for the month an employee passes away (Section 43 (7), EPF Act 1991).

 

Does EPF set minimum age of contribution?

  • There is no minimum age limit, every employee is liable to contribute
  • However, Act 350 - the Child And Young Persons (Employment) Act 1996 (Revised 1998) has set 14 years old as the minimum age for employment.

 

When is an employee eligible for EPF contribution?

  • An employee is eligible to contribute upon receiving a salary of more than RM10.00 in a month or part thereof.

 

How to Register An Employee EPF File ?

  • Automatic 
    • When the EPF receives first contribution from your employer, you will be automatically registered as a member.
    • This is only applicable to Malaysian employees and permanent residents who hold a MyKad
  • Counter / Mail
    • Malaysian workers are required to fill-in KWSP Form 3 and MyKad. 
    • Non-Malaysian employees are required to present a valid passport, a work permit or a valid visa and KWSP Form 16B.
  • EPF I-Akaun

    • Employers log in to the Employer's i-Akaun to enter the employees registration information.
    • After 3 days, check the registration status of employee's registration.
    • Members visit the EPF counter for thumbprint verification.
  • Kiosk

    • By using MyKad and verifying thumbprint at any EPF Smart Kiosk, you can register as a member.
    • You will receive a notice with your EPF member number upon successful registration.

 

What is the “contribution month”?

  • Contribution month is the month in which the contribution is payable based on the previous month's salary.
  • Example contributions paid in January 2021 are for December 2020’ payroll. Contributions must be paid on or before 15th January 2021.

 

What is the Definition of “Wages”?

Wages are all remuneration in the form of money paid by an employer to an employee under a contract of service or apprenticeship based on agreed terms of payment, whether monthly, weekly or daily.

 

What is the Payments Liable for EPF Contribution ?

  • Salary
  • Bonus
  • Allowance
  • Commission
  • Incentives
  • Arrears of salaries (backpayment)
  • Payment in respect of unutilised annual or medical leave
  • Paid maternity leave
  • Paid study leave
  • Wages for half day leave
  • Other payments under contract of service or otherwise

 

What is the Payments Not Liable for EPF ?

  • Service charge / Tips / Service Fee
  • Retirement Benefit
  • Overtime payment
  • Gratuity upon completion of service or voluntary resignation as a recognition of such employee's service.
  • Retrenchment, temporary lay-off or termination benefits
  • Any traveling allowance or the value of any travel concession
  • Any other remuneration or payment as may be exempted by the Minister

 

What is Gazette EPF Contribution Rate?

 

What is the contribution % allocate to my EPF Account?

(1) Age below 60 years old 

  • I-Sinar Withdrawal
  • Investment
  • Death
  • Leaving country
  • Incapacitation
  • Withdraw from Akaun 55
  • Withdraw from both Akaun 55 & Emas

 

  • one-time partial withdrawal 50 years old
  • Build House
  • Education
  • Flexible Housing
  • Health
  • PR1MA Housing
  • Housing Loan Monthly Instalment
  • Haji
  • Buy House
  • i-Lestari Withdrawal 
  • Reduce / Redeem Housing Loan

 

(2) As at 1 Jan 2017, member who reached 55 years old 

  • Contributions from Account 1 and 2 will be transferred to Akaun 55 for members who have reached age 55.

 

  • Contributions after age 55 will be parked under the new Akaun Emas.
  • No pre-retirement withdrawals before 60 years old
  • Upon reaching age 60, balances in Akaun 55 and Akaun Emas will be combined for withdrawal.

 

Source from: 

https://www.kwsp.gov.my/employer/what-you-need-to-know

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

https://www.kwsp.gov.my/member/contribution/mandatory-contribution

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