According to the official website of the Employees Provident Fund Board (KWSP), the monthly EPF contribution rate for employees has officially been revised from 9% to 11%, with this measure taking effect from July 2022.
If your monthly income is RM5,000 or below, the employee’s monthly contribution rate is 11% and the employer’s contribution rate is 13%. For those earning more than RM5,000 per month, the employee will still be required to pay 11% and the employer 12%.
For working people aged 60 years or above, there is no compulsory monthly contribution rate for employees and employers are still required to pay 4% for employees.
Did you actually know? The EPF contribution rate is not calculated directly from monthly income, but rather the EPF Board divides the employee’s income into various groups and the employee and employer are required to contribute to the EPF based on that group. The EPF has also compiled a form called the Third Schedule, which is used by employees and employers to make CPF contributions.
Here is an example of a monthly salary of RM6,250, at 11%, many people will think that they need to contribute RM688, but in fact the employee needs to contribute RM693.
RM6250 X 11% = RM688 (this calculation is incorrect)
RM6250 X 12% = RM750 (this calculation is incorrect)
This employee earns RM6250 per month and is classified as RM6,200 to RM6,300 in the EPF’s Third Schedule, so the employee’s contribution is RM693 and the employer’s contribution is RM756.
This means that in the Third Schedule, the highest salary in that group is calculated, i.e. RM6,300, not directly at RM6,250.
