Last updated : 19 Sep 2023 
As an employer, your responsibilities include paying EPF contributions in respect of any person you have engaged to work under a Contract of Service or Apprenticeship. You have to ensure accurate monthly contributions are deducted from your employees’ salary and remitted to EPF. Access to internet banking makes EPF contribution payments much easier now.
Subject to the provisions of section 52, every employee and every employer of a person who is an employee within the meaning of this Act shall be liable to pay monthly contributions on the amount of wages at the rate respectively set out in the Third Schedule.
Section 43(1), EPF Act 1991
These are the three main elements which determine the obligation to contribute to EPF.
You need to register with the EPF if you fulfill the following elements.
An employer is defined as a person(s) with whom an employee has a contract of service or apprenticeship with.
Employers are:
responsible for the payment of wages to an 'employee'
whether statutory or non-statutory or incorporated
as specified in the Second Schedule to the EPF Act 1991
An employee is defined as a person who is employed under a contract of service or apprenticeship. The contract of service or apprenticeship can be written or oral, expressed or implied.
"Contract of Service" is an agreement in which a person agrees to employ another person as an employee and the other person agrees to serve his employer as an employee.
"Contract of Apprentice" means a written contract made by a person with an employer who pledge to employ the person and train or cause him to be systematically trained for a work during a specified period of time approved by the employer who in the course of the exercise the apprentice is bound to working in the service of the employer.
(Apprenticeship definition reference – Employment Act 1955)
Minimum age: Employment age is subject to Children and Young Persons (Employment) Act 1966.
Maximum Age: 75 years
Persons stipulated in the First Schedule of the EPF Act 1991 who are exempted from making a contribution are as follows:
Except for the persons mentioned in the first Schedule of the EPF Act 1991, you are liable to pay EPF contributions in respect of any person whom you have engaged to work under a Contract of Service or Apprenticeship.
Wages are all remuneration in money due to your employee under his contract of service or apprenticeship whether it was agreed to be paid monthly, weekly, daily or otherwise.
For further information, refer to EPF Act 1991.
There are seven types of payments that are exempted from EPF contribution.
Any payment due from an employer to an employee for work carried out in excess of the normal working hours of such employee and includes any payment paid to an employee for work carried out on public holidays and rest days.
Any payment paid by an employer to an employee upon completion of service or voluntary resignation as a recognition of such employee's service.
Any payment that has been made to the employee for when they voluntarily retire or have reached retirement age.
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"Retirement Benefits" means any payment paid to an employee for retirement whether compulsory or optional or for health reasons as specified under the contract of employment of the employee.
An employer may, with the approval of an employee, transfer to the employee's EPF account any funds being the retirement benefits of the employee or any funds from any other retirement scheme or plan relating to the employee. Such a transfer can be made through Form KWSP 16F by individual or group.
The general terms for remittance of Retirement Benefits to the EPF are: -
Any payment made by an employer due to the reduction or termination of employees.
Any payment paid by an employer to an employee for the purpose of travelling and transportation expenses.
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