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Employees Provident Fund is a compulsory savings scheme in Malaysia. Its primary aim is to provide a measure of security for old age retirement to its members. It also provides supplementary benefits to members to utilize part of their savings for house ownership and other withdrawal schemes.

EPF is the abbreviation for Employees Provident Fund. Employees Provident Fund is commonly known in the Malay term as KWSP or Kumpulan Wang Simpanan Pekerja.

Employees Provident Fund Act 1991 is the act governing the Employees Provident Fund in Malaysia. This Act is administered by the Employees Provident Fund, Malaysia.


All employees in Malaysia who have reached the age of 16 and employed under a contract of service whether express or implied, and whether oral or in writing must be registered as a member of the Employees Provident Fund.

An employer will contribute 12% of the employee's wages and the employee contributes 11% of the monthly wages towards the employee's account.

Prior to 1st August 1998, expatriates and foreign workers were not required to contribute to the EPF although they may elect to do so.

However, with effect from 1st August 1998, all foreign workers and expatriates earning less than RM2,500 per month are also required to contribute to EPF with the exception of certain categories.

Those who are exempted from making the compulsory contribution are

  • employees or workers holding Employment Pass or expatriates holding Visit Pass (Temporary Employment) whose monthly wages is not less than RM2,500
  • Thai workers who enter Malaysia with a Territorial Pass
  • Seamen
  • Foreign domestic maids
  • Self-employed persons
  • Out-workers who do cleaning and alteration repair works
  • Persons detained in custody, in prison, Henry Gurney School and mental hospital
  • Pensioners

Nevertheless, the above can choose to contribute to the fund.

Where a member continues employment after withdrawing the contributions upon retirement, such member may opt to continue contributing to the EPF by submitting the KWSP 20/20A Form.

The statutory rates of contributions are as follows :

  % of contributions of employees' wages
  Employer Employee
All except expatriates and foreign workers 12% 11%
Expatriates and foreign workers
(except those excluded)
RM5 per person 11%

Employers and employees are, however, allowed to elect to contribute at higher rates.


Employers must register their employees with the EPF within 7 days of employment under law.

Under section 41(2) of the EPF Act 1991, an employer who contravenes the above shall be found guilty of an offence and shall be liable, on conviction to imprisonment for a term not exceeding 3 years or fine not exceeding RM10,000 or to both.

An employer shall register the company or firm with the EPF by submitting the KWSP 1 Form. This can be obtained from the nearest EPF branch office.

Thereafter, for each employee, the employee and the employer is required to complete the KWSP 3 (AHL) Form. Generally, an employee will also be required to submit the Nomination Form KWSP 4 (AHL) which is attached together with the KWSP 3 (AHL) Form.

Once the application is approved, the employee will be sent a Membership Card.

The EPF contribution by employer and employee shall commence on the first month of salary payment pursuant to section 45(2) of the EPF Act 1991.

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