EPF: Types of Contribution

A thread

EPF (Employees Provident Fund) or KWSP (Malay: Kumpulan Wang Simpanan Pekerja) is a 'federal statutory body under the purview of the Ministry of Finance'.

EPF manages the compulsory retirement savings and retirement plans for al working Malaysians in the private sector.

The types of contributions are:

- Mandatory Contribution
- Voluntary Contribution

MANDATORY CONTRIBUTION

Full time employees in the private sector are under mandatory contribution. Mandatory contributions are made up of both employers and employees %)

Employee's Contribution (deducted from monthly salary)
11%-old share percentage
7%-new share percentage

Employer's Contribution (paid by company/employer)
13%-for monthly salaries of RM5,000 and below
12%-for monthly salaries of more than RM5,000

Mandatory contributions are made up of both shares and paid by your employers on a monthly basis.

For example, if your fixed salary is RM2,500/month, your monthly EPF contributions are:

Employee's contribution of 11%-RM275
Employer's contribution of 13%-RM325
Total Monthly Contribution-RM600

Your employer will make the contribution of RM600/month into your EPF account.

VOLUNTARY CONTRIBUTION

The types of voluntary contributions are:
1) self contribution
2) i-Saraan
3) i-Suri
4) Top-up Savings Contribution

There is no limit to how much you can contribute as it is considered a voluntary contribution. There is, however, a maximum amount to how much you can contribute in a year.

All voluntary contributions are capped at RM60,000 yearly.

1) Self-Contribution
Requirements: Malaysian citizen & registered EPF member

Tip: for those under mandatory contribution, you can also do voluntary self contribution every month to your EPF account

If you are an online seller/small business owner, you can also make use of this

but, there is a new incentive by EPF called i-Saraan.

2) i-Saraan
a retirement incentive introduced to self-employed individuals who are not earning a regular income. The incentive allows them to make voluntary contributions for their retirement fund.

online sellers and small business owners can sign up for i-Saraan account and build their retirement fund.

Some benefits of the i-Saraan incentive:
-any amount can be contributed (max: RM60k/year)
-EPF dividend
-receive 15% (max RM250) government contribution yearly

Requirements for i-Saraan

1) Malaysian citizen under the age of 55
2) Registered EPF member
3) Self-employed and do not earn a regular income

All voluntary contributions can be done online through Internet Banking, or cash/cheque through EPF Counters and Bank Agent Counters.
Maximum: RM60,000/year

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