The Complete EPF Employer Guide for Malaysia 2026: Rates & Foreign Worker Rules
Winnie Lu
July 2, 2026
If you run payroll in Malaysia, EPF (KWSP) is the one statutory contribution you cannot afford to get wrong — and 2026 brings the biggest change in years: EPF is now mandatory for foreign workers too. Whether you're hiring your first employee or reviewing your payroll process, the rates differ by age, wage level and citizenship, and a single misclassification can trigger late-payment penalties. This guide breaks down every 2026 EPF rate an employer needs, how to calculate contributions correctly, and when to pay — so you stay compliant without second-guessing.
For Malaysian employees below 60, the standard EPF contribution is 11% from the employee and 13% from the employer (for monthly wages up to RM5,000) or 12% (for wages above RM5,000). Employees aged 60–75 contribute 0% while employers pay 4%. Since 1 October 2025, EPF is mandatory for foreign workers, with employer and employee each contributing 2% of monthly wages.
What is EPF (KWSP) and who must contribute?
EPF = mandatory retirement savings under EPF Act 1991; all employers with Malaysian/PR employees must contribute; since Oct 2025 also for foreign workers under 75. Registration within 7 days of hiring first employee.
EPF contribution rates in 2026 (by age and wage)
Employee category
Employer
Employee
Malaysian / PR, below 60 — wages RM5,000 & below
13%
11%
Malaysian / PR, below 60 — wages above RM5,000
12%
11%
The 2026 foreign worker change every employer must action
Since 1 October 2025, EPF contributions are mandatory for non-Malaysian employees under age 75 (previously voluntary). Both employer and employee contribute 2% of monthly wages. Employers who hire foreign workers must register them and start deducting — failing to do so is now a compliance gap, not an option.
How to calculate EPF correctly — the Third Schedule
For employees earning RM20,000 or below per month, EPF is not a plain percentage of exact salary — you must use the fixed contribution amounts in the Third Schedule of the EPF Act 1991 (which rounds wages into bands). Only wages above RM20,000 use exact-percentage calculation. Worked example with a RM3,000 salary showing Third-Schedule lookup vs naive %. (How to register your company with EPF, SOCSO and LHDN)
EPF payment deadlines and employer responsibilities
EPF contributions must be paid on or before the 15th of the following month (e.g. August wages → paid by 15 September). Late payment incurs dividend + late-payment charges. List: register within 7 days of first hire, deduct employee share, submit via i-Akaun, keep records.
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FAQ
What is the EPF employer contribution rate in Malaysia for 2026?
For Malaysian employees below 60, employers contribute 13% for monthly wages up to RM5,000, and 12% for wages above RM5,000. The employee contributes 11%. Employees aged 60–75 have a 4% employer rate and 0% mandatory employee rate.
Do employers pay EPF for foreign workers in 2026?
Yes. Since 1 October 2025, EPF is mandatory for non-Malaysian employees under age 75. Both employer and employee contribute 2% of monthly wages. This was previously voluntary.
When must EPF contributions be paid?
EPF must be paid on or before the 15th of the following month. For example, contributions for August wages are due by 15 September. Late payment attracts dividend and late-payment charges.
How is EPF calculated for salaries below RM20,000?
Use the fixed amounts in the Third Schedule of the EPF Act 1991, not a direct percentage. Only wages above RM20,000 per month are calculated by exact percentage.
Is EPF compulsory for employees aged 60 and above?
For Malaysian employees aged 60 to 75, the employee rate is 0% (voluntary) while the employer contributes 4%. Contributions stop at age 75.
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