The Employer's Guide to EPF Contributions and Responsibilities

The Employer's Guide to EPF Contributions and Responsibilities
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Disclaimer: This article should not be considered legal advice, and the EPF is not liable for any actions taken based on this article. 

Employers play a crucial role in ensuring the financial well-being of their employees by contributing to the Employees Provident Fund (EPF). By making these contributions, employers not only fulfill their legal obligations but also foster a sense of confidence and peace of mind among employees, ensuring a reliable safety net for retirement.  

Employers' efforts in contributing to the EPF also demonstrate their commitment to employee welfare, which can enhance long-term motivation, loyalty, and productivity within the organisation.

Who needs to contribute to EPF?

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EPF contributions are mandatory for Malaysian citizens working in the private sector and non-pensionable public sector individuals, with optional participation for non-Malaysian citizens. 

There are however a few exceptions, including foreign workers in Malaysia, MyKas holders, domestic helpers and individuals who are imprisoned. For a detailed list of exempted employees from contributing, refer to the First Schedule of the EPF Act 1991

Employer’s responsibilities under EPF monthly contribution

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Employers need to ensure that monthly EPF contributions are implemented effectively. This involves several important steps, such as the following:

  • Registration as an EPF employer
    It’s mandatory for all SSM registered companies or registered businesses such as enterprises or partnerships to register as EPF employers within 7 working days upon hiring their first employee.
  • Employee Registration
    Employers must register employees as EPF members (if they are first-time workers) and ensure their information is always up to date.
  • Monthly Payroll Statement
    Employers must provide monthly payroll statements or pay slips to each employee indicating the EPF deductions made by the employer and their salary.
  • Deductions and Payment of Contributions
    Employers must deduct EPF contributions for both the employee and employer's portions from the employee’s salary and remit them to the EPF every month, on or before the 15th day of the following month. 

The Employees Provident Fund Act 1991

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According to the EPF Act 1991, employers registered in Malaysia are legally obligated to contribute to the EPF for their employees, with certain exceptions specified in the EPF Act 1991.

“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.”

This provision underscores the importance of understanding EPF contribution eligibility, ensuring that both employers and employees are aware of their rights and responsibilities under Malaysian law. 

Automate employee salary payments with e-Payroll

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The EPF e-payroll system is a free online platform that provides a comprehensive solution for employers to easily manage the payroll process. Through this platform, employers can streamline various tasks, from calculations to EPF contribution payments.


The system automatically calculates EPF contributions based on employee data, ensuring accuracy and compliance with EPF guidelines. It also generates detailed reports and statements for quality record-keeping and auditing, enhancing confidence and accountability in payroll management. 

Accessible through the i-Akaun (Employers) portal, this system streamlines the employee payment process, facilitating fast, efficient transactions and reducing human errors. Additionally, it aids in managing salary records and EPF contribution payments, simplifying employers' administrative tasks.

Streamline salary payment processes seamlessly with the EPF e-Payroll

By understanding and efficiently managing EPF contributions, employers not only fulfill their legal obligations but also demonstrate a genuine commitment to their employees' financial stability and retirement welfare. This cultivates a positive relationship between employers and employees, fostering mutual trust and support.