If you are an employer or an employee in Malaysia, or are looking to be one, you may have heard of the KWSP Fund, or as it is known in Malay as Kumpulan Wang Simpanan Pekerja. This is a federal statutory body governed by the Ministry of Finance in Malaysia. Commonly translated to the Employees’ Provident Fund or the EPF in English, this body controls the savings and retirement plan for all workers in Malaysia who are classified as working under the private sector. In essence, this is one of the social security schemes managed by the government and was established in 1991 under Act 452.
While the subscription is mandatory for all private sector workers of Malaysian Nationality, it is optional for those who aren’t, however it is highly recommended as it provides a means of income even after retirement.
Applying for the EPF in Malaysia is compulsory on the part of the employer, i.e. the employer has to be the one who submits an application for each individual employee. It is to be noted that the fund is paid for and contributed by both the employer and employee and is calculated as such.
On the employer’s end:
- 13% of the total monthly income if an employee’s income comes to under RM 5000
- 12% of the total monthly income if an employee’s income comes to above RM 5000
On the employee’s end:
- 11% of their monthly income is deducted and set aside for the fund.
In terms of the employer’s contribution, it should be noted that the charge is levied as a percentage of all the income categories below:
- Monthly Salary
- Allowances for annual/medical leave that remains unused
- Any bonuses received
- Any extra allowances
- Commissions (in the case of those who work with sales and marketing)
- Employee incentives
- Outstanding wages
- Wages granted for maternity
- Wages granted for study leave
- Wages granted for half day leave
- Other payments detailed under the services contract
As previously stated, if the candidate is not a private sector worker or a Malaysian National, the contribution to the EPF is voluntary, and if a candidate were to apply for it, it would be classified as a self-contribution and can be filed for by the following candidates:
- Those who own and have registered a sole proprietorship
- Domestic servants or government workers who are employed by private individuals or bodies
The application for the EPF can be obtained and submitted at the KWSP website here, the form will have to be downloaded and filled in before submitting a physical copy to one of the KWSP offices either in person or through a verified agent on your behalf.
Below is the address for the main headquarters of the KWSP/EPF office:
Jalan Raja Laut
50350 Kuala Lumpur
Fax No: 03-26948433
If you still have any doubts or questions about the KWSP proceedings, feel free to ask any member or our friendly customer service staff to help you.
Frequently Asked Questions
Is it compulsory to apply for the KWSP/EPF?
Yes, if you are an employer of anyone who works in the private sector who is of Malaysian Nationality, it is compulsory. If you or your candidate does not fulfill the condition above, applying for this is up to the candidate’s discretion.