If you’re still budgeting payroll around a 9% or 11% flat EPF rate, it’s time for an update. EPF contribution rates in Malaysia now vary by age, wage level, and, since October 2025, citizenship status, with mandatory contributions extended to foreign workers for the first time. Here’s exactly what applies in 2026.
Current EPF Contribution Rates (2026)
For Malaysian citizens and permanent residents under 60:
- Employee contributes 11% of monthly wages
- Employer contributes 13% for wages up to RM5,000, or 12% for wages above RM5,000
For employees aged 60 to 75:
- Employee contribution drops to 0% (voluntary contribution still allowed)
- Employer contributes a flat 4%, regardless of wage level
What Changed: Mandatory EPF for Foreign Workers (Since October 2025)
This is the biggest EPF change in recent years. Since 1 October 2025, EPF contributions are mandatory for non-Malaysian employees under 75; this was previously voluntary. Both employer and employee now contribute 2% of monthly wages each.
If you employ foreign workers and haven’t updated your payroll setup since this change, this is worth checking immediately. Failing to register and contribute for eligible foreign employees is an offence under the EPF Act, with fines of up to RM20,000 or imprisonment of up to 3 years, or both.
How Contributions Are Actually Calculated
This trips up a lot of employers: for wages below RM20,000 a month, EPF contributions must be calculated using the fixed amounts in the Third Schedule of the EPF Act 1991, not a straight percentage calculation. Only wages of RM20,000 and above use the exact percentage method. Getting this wrong, even by a small rounding difference, can flag your payroll as non-compliant during an audit.
Payment Deadline
EPF contributions 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 both dividend charges and late-payment penalties, so this isn’t a deadline worth pushing.
Frequently Asked Questions
What is the EPF contribution rate in Malaysia for 2026?
11% from the employee and 13% (or 12% for wages above RM5,000) from the employer, for Malaysian citizens and PRs under 60.
Is EPF now mandatory for foreign workers?
Yes. Since 1 October 2025, foreign workers under 75 are subject to mandatory EPF contributions at 2% from both employer and employee.
Do EPF rates change after age 60?
Yes. Employee contribution drops to 0% (voluntary top-ups still allowed), while employer contribution becomes a flat 4%.
When are EPF contributions due?
On or before the 15th of the month following the wage month.
What happens if an employer doesn’t contribute EPF for a foreign worker?
It’s an offence under the EPF Act, carrying fines of up to RM20,000, imprisonment of up to 3 years, or both.
Related Reading
- HR & Payroll Compliance Checklist for Malaysian SMEs
- Employment Act Malaysia: Key Updates Employers Need to Know
Keeping EPF Compliant Every Month
Between age-based rates, the new foreign worker rules, and the Third Schedule calculation method, EPF compliance has more moving parts than it used to. If you’d rather have this checked and applied correctly every payroll cycle, talk to Righthouse’s EPF compliance team.
