Members who have not opted for Simpanan Shariah will have their savings managed under Simpanan Konvensional. The annual dividends received annually from these savings are derived from a mixed investment portfolio comprising both shariah-compliant and shariah non-compliant investments. Dividends derived from shariah non-compliant investments cannot be utilised and must be purified in accordance with the resolution of the 87th Muzakarah (Conference) of the Fatwa Committee National Council of Islamic Religious Affairs Malaysia:

“In Islam, property obtained through syariah non-compliant means, such as usury, ambiguous transactions, gambling, fraud, robbery, plunder, corruption, etc., is considered illegal and cannot be used for personal gain. Such property must be purified using one of the following methods: 

(a) it can be channeled to Baitulmal for the general public interest of Muslims, such as funding the construction or maintenance of bridges, roads, toilets, etc.; or

(b) it can be given to the poor and needy.”

The decision to purify the dividend is at the discretion of individual members and should be based on their conscience. Members are also advised to seek the views of the Islamic Religious Council in their respective states.

The 87th Muzakarah (Conference) of the Fatwa Committee National Council of Islamic Religious Affairs Malaysia has resolved that:

“In Islam, property obtained through shariah non-compliant means, such as usury, ambiguous transactions, gambling, fraud, robbery, plunder, corruption, etc., is considered illegal and cannot be used for personal gain. Such property must be purified”. 

Dividends derived from shariah non-compliant investments are also considered a form of property obtained through shariah non-compliant mean.

Since the member has just switched to Simpanan Shariah, purification of dividends only needs to be carried out for the Simpanan Konvensional dividends credited to members account prior to the election of Simpanan Shariah.

For example, if a member has been an EPF member since 2017 and elected for Simpanan Shariah on 3 October 2025, which only takes effect on 1 November 2025, then dividend purification must be carried out for the Simpanan Konvensional dividends received from 2017 to 2024, as well as the Simpanan Konvensional dividends received for the period from 1 January 2025 to 31 October 2025.

Dividend purification can be done either by using EPF savings that is eligible for withdrawal (if any) or using other financial resources owned by the member.

The decision to purify the dividend is at the discretion of members and should be based on their conscience. Members are also advised to seek the views of the Islamic Religious Council in their respective states.

EXEMPTION FOR SIMPANAN KONVENSIONAL DIVIDEND PURIFICATION: 

Any dividends received prior to the introduction of the Simpanan Shariah, i.e. 2016 dividend and earlier, are not subject to dividend purification as the Shariah Advisory Committee of the EPF (SAC) has resolved that members did not have Haq Tasarruf, which is the right to opt for their savings to be managed in accordance with syariah principles (no option for syariah-compliant account).

The purification rate for 2025 Simpanan Konvensional dividend is 60% of the total dividend credited to the member’s account. Meanwhile, the historical purification rate prior to the 2025 dividend can be referred to the following table:

i.    At present, the EPF does not pay business zakat or zakat on EPF savings on behalf of members.

ii.    The EPF does not take into account any zakat payment when crediting the dividend to the member's account. Muslim members are liable to pay zakat (2.50%) on (i) EPF savings that has been withdrawn without the need of completing a one year cycle (haul); and (ii) EPF savings that are eligible to be withdrawn and used without any restriction which exceeded a one year cycle (haul) and Nisab (the minimum amount equivalent to the prevailing value of 85 grams of gold) as determined by the relevant states’ Zakat authority.

iii.    Types of withdrawal that are subject to zakat are:- 

a.    Akaun Fleksibel Withdrawal;
b.    Age 50 Withdrawal from Akaun Sejahtera;
c.    Age 55 Withdrawal from Akaun Persaraan, Akaun Sejahtera and Akaun Fleksibel;
d.    Age 60 Withdrawal from Akaun Emas;
e.    Leaving Country Withdrawal; 
f.    Pensionable Employees Withdrawal And Optional Retirement Withdrawal; and
g.   Withdrawal Of Savings Of More Than RM1 Million.

Members are also advised to refer to the respective states’ Zakat authorities for matters related to zakat

Payment of zakat and purification of dividends are two separate matters.

Zakat is imposed on halal assets that fulfill the conditions for zakat obligation, while purification of assets is applicable for assets obtained through shariah non-compliant means that cannot be utilised and must be channeled to Baitumal or the poor and needy.

If members did not switch to Simpanan Shariah, the dividends earned from shariah non-compliant investment will form part of members’ EPF savings. Therefore, Muslim members are advised to separate these savings from the amount that needs to be purified according to the rate of dividend purification each year before determining the amount of savings that are subject to zakat.

Muslim members do not need to purify the Government Share dividends that have been channeled to KWAP.

Members are only responsible for purifying the Simpanan Konvensional dividends (Employee Share) that have been paid to the members (if any) subject to the details explained in Question 3 above.

The Simpanan Konvensional dividend credited to members’ accounts was generated from investments in both shariah-compliant and shariah non-compliant assets in Simpanan Konvensional portfolio. 

The shariah non-compliant investments include assets and instruments that do not adhere to the shariah principles; some of which involve riba (interest) such as investments in Malaysian Government Securities, bonds, and companies which involved in the conventional financial sector or those that utilise conventional financial instruments beyond the permissible threshold. 

Only the dividend generated from the shariah non-compliant assets in Simpanan Konvensional Portfolio needs to be purified.

Appendix 1 - How to Calculate Dividends for Akaun Emas

The dividend calculation for Akaun Emas starts AFTER the transfer to Akaun 55 (the member has reached the age of 55). The example below shows that dividend calculation commences for the contribution month of August 2025.

(a)    Sample of the 2025 Member Statement with Akaun Emas

Example of Dividend Calculation of Akaun Emas

Appendix 2 - How to Calculate Dividends for Age 55 Full Withdrawal

Member makes Age 55 Full Withdrawal on 13 December 2025 then received full dividends based on the 2024 Dividend Rate which is 6.30% (Simpanan Shariah)

(a)    Sample of the 2025 Member Statement with Age 55 Full Withdrawal

(b)    Example of Dividend Calculation for Age 55 Full Withdrawal

Appendix 3 - How to Calculate Dividends for Age 55 Withdrawal (Combination)

Example of Dividend Calculation for Age 55 Withdrawal (Combination)

Appendix 4 - How to Calculate Dual Dividend (Simpanan Konvensional and Simpanan Shariah)

Member elected Simpanan Shariah on 3 May 2025. The effective date of Simpanan Shariah is on 1 June 2025. Dividend rate for Simpanan Konvensional is 5.50% and dividend rate for Simpanan Shariah is 5.00%.

Example of Dividend Calculation for Simpanan Konvensional and Simpanan Shariah