KWSP Contribution

EPF or KWSP is an Employee Provident Fund or also known as the Kumpulan Simpanan Wang Pekerja in Malaysia. Every company is required to contribute EPF for their staff. These contributions are made monthly and must be submitted before the 15th day of the following month. It is also the employer’s responsibility to make sure that they deduct their employee’s salary appropriately and remitted for EPF.

How to opt out from EPF Employee Contribution Rate 11% to 9%?

On November 2020, The Employee Provident Fund (EPF) has announced that as of year 2021, the employee’s statutory contribution rate for EPF will be reduced from 11% to 9%. This in in compliance of the Budget 2021 intentions of decreasing employee contribution rates from 11% to 9%, to increase potential cash flow of up to RM9.3 billion.

This compulsory contribution rate will only affect all employees under the age of 60 years old who are eligible to contribute. The contribution rate remains unchanged for employees above 60 years old.

This changes will take effect on January 2021 (February 2021 contribution) and will remain until December 2021 ( January 2022 contribution).

Employees who wish to maintain their current contribution rate of 11% are required to fill in the Borang KWSP 17A(Khas 2021). This form is available on the EPF official website from December 2020 onwards.

The completed form must be submitted by the employer online via i-Akuan. Submission period starts on the 14th of December 2020. Employers have to keep a copy of the forms received from their employees for their own record.

contribution rate 11% to 9% kwsp epf saving - sql payroll

Who must contribute and how much?

Every Malaysian, Permanent Resident (PR), and registered non-Malaysian member are required to contribute for EPF.

The contribution rate is different for employees based on age, monthly wages, and citizenship.

The table below shows a detailed breakdown on the contribution rate :

Employee’s StatusMonthly Salary RateStage 1 (Below 60 years old)Stage 2 (Age 60 and above)
  1. Malaysian
  2. Permanent Residents (PR)
  3. Non-Malaysians (registered as member before 1 August 1998)
No limit
  • Applicable for (i) only
    Employees share: 0%
    Employer’s share: 4%
    (Ref Contribution Rate – Section E)
RM5,000 and below Employees share: 7%
Employer’s share: 13%
(Ref Contribution Rate – Section A)
  • Applicable for (ii) and (iii) only
    Employees share: 5.5%
    Employer’s share: 6.5%
    (Ref Contribution Rate – Section C)
More than RM5,000 Employees share: 7%
Employer’s share: 12%
(Ref Contribution Rate – Section A)
  • Applicable for (ii) and (iii) only
    Employees share: 5.5%
    Employer’s share: 6%
    (Ref Contribution Rate – Section C)
Non-Malaysians (registered as member from 1 August 1998) No limit Employees share: 7%
Employer’s share: RM5.00
(Ref Contribution Rate – Section B)
Employees share: 5.5%
Employer’s share: RM5.00
(Ref Contribution Rate – Section D)
  1. Employers are not allowed to calculate the employer’s and employee’s share based on exact percentage EXCEPT for salaries that exceed RM20,000.00. The total contribution which includes cents shall be rounded to the next riggit.
  2. Effective from April 2020 salary/wage up to December 2020 (May 2020 contribution month up to January 2021).

Voluntary Contribution

For employee’s that are not required to contribute for EPF, they can opt to make a voluntary contribution. Domestic helpers and foreign citizens can apply to contribute for EPF. They would have to submit the KWSP 16 and KWSP 16B from.

Contribute More than the Statutory Rate (Voluntary Excess)

The employee, employer or both can choose to contribute more than the set rate.

If you want to contribute more for the employee share only, employers are required to submit KWSP 17A (AHL) OR KWSP 17AA (AHL) for employers with more than one employee.

If a voluntary excess is wanted on only the employer’s share, employers are required to submit a KWSP 17(MAJ) form.

If both employee and employer’s share want to contribute more than the statutory rate, employers are required to submit the form KWSP 17A (AHL) and KWSP 17 (MAJ).


SQL Payroll Highlight Features

SQL Payroll Software removes the complexities in Human Resources Management, make your payroll process easier. SQL Payroll Software ready with all HR management, eLeave, PCB tax calculator, specific contribution assignment and automatic overtime calculation. SQL Payroll is the only software that you would ever need to use for your Payroll processing.

Automated & Accurate

Certified & compliant by Malaysia KWSP, SOCSO, LHDN, EID, HRDF

Monthly Payroll & Payslips

Process monthly payroll & payslip in just less than 10 minutes.

Bank Giro & E Submission

Available in more than 25 Malaysia statutory bodies online submissions.

EA Form & Borang E

Send EA form to all employees & online submission of Borang E / CP8D to LHDN in just 1 click.

Comprehensive HR & Management Reports

View payroll summary, yearly payroll report, appointment letter, confirmation letter, increment letter & many more.

E-Leave & E-Claims

Apply leave & submit claim via mobile app easily, save time and get paid faster.

With Malaysia Government Subsidy, you can have a certified, highly accurate and trustworthy SQL Payroll Software at 50% of the original price now!

Offered in limited slots, first-come-first-served basis.

Contact us now to get a Free Demo !