EPF Contribution Rates 2026: Employee vs Employer Share Explained (Malaysia)

For most Malaysian employees below 60, the employee EPF (KWSP) share is 11% of monthly wages and the employer share is 13% if wages are RM5,000 or less, or 12% if wages are above RM5,000. On a gaji of RM3,500, that works out to RM385 deducted from your pay and RM455 paid on top by your employer, so RM840 goes into your EPF account each month.

The rest of this guide explains where those numbers come from, why EPF is not simply "11% of salary" to the sen, and how age, wage level and pay items change the result. To run your own numbers, use the KiraBoss salary calculator.

EPF contribution rates 2026 at a glance

These are the statutory rates in the Third Schedule of the EPF Act 1991, effective from October 2025 wages:

• Malaysian citizens, PR and non-Malaysians registered before 1 August 1998, below 60, wages RM5,000 and below: employee 11% · employer 13%
• Same group, below 60, wages above RM5,000: employee 11% · employer 12%
• Malaysian citizens aged 60 and above (any wage): employee 0% · employer 4%
• PR and non-Malaysians registered before 1 August 1998, aged 60 and above, RM5,000 and below: employee 5.5% · employer 6.5%
• Same group, aged 60 and above, above RM5,000: employee 5.5% · employer 6%

Non-Malaysian employees registered from 1 August 1998 follow a separate part of the schedule (Part F). Check the current rate on KWSP's mandatory contribution page before running payroll for foreign workers.

Employee EPF vs employer EPF: what each one does to your pay

Employee EPF is deducted from your salary. It lowers your take-home pay, and it appears on your payslip as a deduction.

Employer EPF is paid by your company on top of your salary. It never enters your bank account as cash and is not deducted from you. It does go into your EPF account, so it is part of your total compensation, but not part of your monthly spending money.

Both shares are paid to KWSP together by your employer, on or before the 15th of the following month. For example, January's salary is paid as the February contribution.

Once credited, the total mandatory contribution is split across your accounts: 75% to Akaun Persaraan, 15% to Akaun Sejahtera and 10% to Akaun Fleksibel (for members below 55).

How EPF is actually calculated: the Third Schedule

Many people multiply their salary by 11% and get a slightly different number from their payslip. That's because employers must use the Third Schedule table, not an exact percentage, for wages up to RM20,000.

The table works in wage bands:

• Wages up to RM5,000 are grouped in RM20 bands (for example RM3,480.01 to RM3,500).
• Wages from RM5,000.01 to RM20,000 are grouped in RM100 bands (for example RM5,900.01 to RM6,000).
• Each band's contribution is the rate applied to the top of the band, rounded up to the next ringgit.
• Above RM20,000, the exact percentage is used, and the total contribution including cents is rounded up to the next ringgit.

So for wages up to RM20,000, each EPF share on your payslip should be a whole ringgit amount. If yours shows sen at that wage level, it's worth asking HR how it was calculated.

Worked examples in RM

Example 1: Gaji RM3,500 (below 60)

• Band: RM3,480.01 to RM3,500
• Employee EPF: 11% × RM3,500 = RM385
• Employer EPF: 13% × RM3,500 = RM455
• Total to KWSP: RM840 (RM630 Persaraan, RM126 Sejahtera, RM84 Fleksibel)
• Your salary after EPF only: RM3,500 − RM385 = RM3,115 (before SOCSO, EIS and PCB)

Example 2: Gaji RM3,510, why it isn't RM386.10

• Exact 11% would be RM386.10, but RM3,510 falls in the RM3,500.01 to RM3,520 band.
• Employee EPF: 11% × RM3,520 = RM387.20 → rounded up to RM388
• Employer EPF: 13% × RM3,520 = RM457.60 → rounded up to RM458

A RM10 raise added RM3 to your EPF deduction, not RM1.10. This is normal and is how the official table works.

Example 3: Crossing the RM5,000 line

• Gaji RM5,000: employee RM550, employer RM650 (13%), total RM1,200
• Gaji RM5,001: band RM5,000.01 to RM5,100, employee RM561, employer RM612 (12%), total RM1,173

Above RM5,000, the employer rate drops to 12%. That's why someone earning RM5,001 can receive a smaller employer contribution than someone earning exactly RM5,000. Your own deduction still goes up because the employee rate stays at 11%.

Example 4: Gaji RM8,000

• Employee EPF: RM880
• Employer EPF: 12% × RM8,000 = RM960
• Total: RM1,840

Example 5: Aged 60, Malaysian citizen, gaji RM4,000

• Employee EPF: RM0 (no deduction from salary)
• Employer EPF: 4% × RM4,000 = RM160

Your take-home pay rises once you turn 60 because the 11% deduction stops, though your employer still contributes.

Example 6: Gaji RM25,000

• Above RM20,000 the exact percentage applies.
• Employee EPF: 11% × RM25,000 = RM2,750
• Employer EPF: 12% × RM25,000 = RM3,000

Which pay items count for EPF

EPF is charged on "wages", which is wider than basic salary. According to KWSP:

Subject to EPF: basic wages, bonus, allowances, commission, incentives, arrears of wages, payment for unused annual or medical leave, and wages for maternity, study or half-day leave.

Not subject to EPF: overtime payment, service charge, gratuity, retirement benefits, retrenchment, lay-off or termination benefits, payment in lieu of notice, and travelling allowance or the value of travel concessions.

Example: gaji RM2,500 plus RM300 overtime. EPF is based on RM2,500 only, so employee EPF is RM275 and employer EPF is RM325. Overtime is still taxable for PCB, which is a separate calculation.

Bonus months matter too. Because a bonus counts as wages, your EPF deduction in a bonus month is noticeably higher. See how to calculate take-home salary in Malaysia for how this flows through to net pay.

Contributing more than the statutory rate (i-Topup)

You, your employer, or both can choose to contribute above the Third Schedule rates through i-Topup (previously called Voluntary Excess). Employees opt in through the KWSP i-Akaun app or portal, or with Form KWSP 17A (AHL) submitted to the employer. Employers who want to top up their share need no form.

For example, KWSP shows an employee on RM1,000 choosing 16% (11% + 5%). That gives an employee share of RM160, the employer still pays 13% (RM130), and the total is RM290. Top-up contributions are also rounded to the next ringgit. The chosen rate continues until a cancellation notice is submitted.

Common mistakes

• Using 13% for everyone. The employer rate is 12% once wages exceed RM5,000.
• Multiplying by exactly 11%. Below RM20,000, the band table applies and amounts round up to whole ringgit.
• Including overtime in EPF wages. Overtime is not subject to EPF, though it still counts for PCB.
• Adding employer EPF to take-home pay. Employer EPF goes to your KWSP account, not your bank account.
• Forgetting the age-60 change. Malaysian citizens aged 60 and above have no employee deduction, and the employer pays 4%.
• Leaving out the bonus. Bonus, commission and most allowances are EPF wages.

Check your own numbers

Enter your basic pay, allowances, overtime and bonus in the salary calculator. It applies the Third Schedule bands and shows employee and employer EPF separately, alongside SOCSO, EIS and PCB. For the PERKESO side of your payslip, see the SOCSO and EIS contribution table 2026. To project how your EPF balance could grow over time, try the EPF growth calculator.

KiraBoss guides are for general information and estimation only. Your employer's payroll and your KWSP statement are the official record.