The EPF contribution rate for employee’s share will fall from 11% to 9%.
What is the Employee Provident Fund (EPF)?
As laid out in the Employee Provident Fund Act 1991, the EPF is an employee retirement saving scheme. The savings are a combination of the employee and employer’s monthly contributions and yearly dividends earned. The money contributed is managed and invested under Simpanan Konvensional or Simpanan Shariah.
Can members maintain their current contribution rate?
Members who wish to maintain the contribution rate of 11% may do so.
Employers can apply to maintain an employee’s contribution rate beginning December 14, 2020, using Borang KWSP 17A (Khas 2021) form. This will be available on the EPF website from December 1, 2020.
All submissions for this purpose are to be completed through the i-Akaun (Employer) portal only, starting December 14, 2020. Employers are also required to keep all correspondence for the records.
To whom will the new EPF statutory contribution rate apply?
The new statutory contribution rate for employees applies only to members under 60 years old, who are liable for contributions and will affect their wages from January 2021 (February 2021 contribution) until December 2021 (January 2022 contribution).
For members aged 60 years old and above, the statutory contribution rate for employees remains unchanged.
Additional reading:
EPF ANNOUNCEMENT ON THE STATUTORY RATE REDUCTION TO 9% FOR 2021
EPF ANNOUNCEMENT ON FORM SUBMISSION TO MAINTAIN EMPLOYEES’ CONTRIBUTION RATE AT 11%
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