Malaysia News



  1. What are the components of wage?
    • Payments which are subject to EPF contribution include:
      • Salary
      • Bonus
      • Allowance
      • Commission
      • Incentives
      • Arrears of salaries
      • Payment in respect of unutilised annual or medical leave
      • Paid maternity leave
      • Paid study leave
  1. What are non-wages?
    • Payments which are not liable for EPF contribution are:
      • Service charge
      • Overtime payment
      • Gratituity
      • Retirement benefits
      • Retrenchment
      • Temporary lay-off & termination benefits
      • Payment in lieu of notice of termination of employment
      • Travelling allowance or the value of any travelling concession
    • * The above list is not exhaustive.
  1. Can the monthly contributions be paid bimonthly or combined as one month?
  1. What should an employer do if he/she wishes to contribute more than the stipulated rate for employer’s share?
    • An employer can make a Voluntary Excess (VE) Contribution by completing Form KWSP 17 (MAJ) - Notice to Contribute More Than Statutory Rate (Employer). The contribution paid must be rounded up to the nearest ringgit and must not be backdated.
  1. If an employee chooses to contribute more than the stipulated rate, can the employer deduct from the employee’s own salary for that purpose?
    • Yes you can, but only if the employee has opted for Voluntary Excess (VE) Contribution and after completing Form KWSP 17A (AHL) - Notice to Contribute More Than Statutory Rate (Employee).
  1. Are salaries paid by hour subject to EPF contribution?
    • Yes, if an employee works any day in a month and receives wages in excess of RM10.00 (whether of daily, hourly or piece-rated salary), he/she is liable to make an EPF contribution.
  1. Who does ‘Employee Liable to Contribute’ refer to?
    • Permanent employees
    • Contract employees
    • Part time employees
    • Temporary employees
    • Probationary employees
    • Directors receiving salary/wages
    • Employees who have made full withdrawal under the Incapacitation Withdrawal and have since recovered and are re-employed in any service
    • Employees who have made a 55 Years Withdrawal and are below 75 years old and still working in any occupation
    • Employees who have made a Pensionable Employees and Optional Retirement Withdrawal and are working with employers other than the Federal or State Governments, or any statutory bodies or local authorities
    • Employees who have made Pensionable Employees Withdrawal and were re-employed after the retirement age
  1. Is a part-time worker or employee who works with more than one employer subject to EPF contribution?
    • Yes, they are subject to EPF contribution
  1. Do non-Malaysian employees have to contribute?
    • No, non-Malaysian employees are not required to contribute, but they are given the option to contribute. If an employee has opted to contribute, he/she and the employer are liable to contribute and not allowed to revoke the option made.
  1. Do foreign companies hiring Malaysian citizens need to contribute?
    • Yes, if the foreign company has registered and is operating in Malaysia.
  1. Can an employer deduct the employer’s share of contribution from an employee’s salary?
    • No. According to Section 47(1) of the EPF Act 1991, any employer who makes deductions or attempts to make deductions from an employee's wages or remuneration, either whole or in any part of the employer's contribution, faces imprisonment for no more than six years or a fine of not more than RM20,000, or both.