# EPF for Employers: Why the Third Schedule Is a Table, Not a Percentage

> How to compute and remit EPF correctly — including the rule that percentage arithmetic is not permitted below RM20,000 in monthly wages.

- Category: employment
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/employment/epf-employer-guide

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Ask a Malaysian payroll administrator what the EPF employer rate is and you will
be told 13 per cent. Ask them to compute the contribution on a salary of
RM3,250 and most will multiply. That multiplication is not permitted, and it
gives the wrong number.

The EPF's instruction is stated plainly on its own employer page: employers are
**not allowed** to calculate the employer's and employee's share based on exact
percentage, except for salaries exceeding RM20,000. Everything below that
figure comes off a table.

This is the single most consequential thing an employer can get wrong about EPF,
and it is buried or omitted in most published guidance — which tends to open
with a tidy 13/11 rate box and never mention the Schedule at all.

## Why does the table give a different answer from the percentage?

Because the Third Schedule sets contributions by **wage band**, and the amount
for each band is struck on the top of the band rather than the employee's actual
wage.

Bands are RM20 wide from zero up to RM5,000, then RM100 wide from RM5,000 to
RM20,000. An employee earning anywhere below the top of their band therefore
attracts slightly more than a straight percentage of their own salary.

The EPF publishes the comparison itself. For a Malaysian citizen under 60
earning RM3,250 a month:

| Approach | Employer | Employee | Total |
| --- | --- | --- | --- |
| Correct — Third Schedule Part A | RM424 | RM359 | RM783 |
| Wrong — percentage arithmetic | RM423 | RM358 | RM781 |

Two ringgit. Per employee. Per month. It looks trivial until you notice that it
is not a rounding preference but a contravention of s.43(1), repeated across
every employee and every wage month, and that it compounds as salaries rise. On
wages of RM6,710.80 the Schedule gives RM816 and RM748 — RM1,564 in total —
where percentages give RM1,543.49, a gap of over RM20.

The practical consequence: if your payroll system is configured with a
percentage rule rather than the Schedule table, it is producing short
contributions on essentially every employee below RM20,000.

## Which Part of the Third Schedule applies?

The Schedule is divided into Parts by citizenship, residence status and age. Get
the Part wrong and the rate is wrong regardless of how carefully you read the
table.

| Employee | Under 60 | Aged 60 and over |
| --- | --- | --- |
| Malaysian citizen | **Part A** — employer 13 per cent up to RM5,000 in wages, 12 per cent above; employee 11 per cent | **Part E** — employer 4 per cent; employee nil |
| Permanent resident, or non-citizen who elected before 1 August 1998 | **Part A** — as above | **Part C** — employer 6.5 per cent up to RM5,000, 6 per cent above; employee 5.5 per cent |
| Non-citizen registered from 1 August 1998 | **Part F** — employer 2 per cent, employee 2 per cent | **Part F** — employer 2 per cent, employee 2 per cent |

Two structural points that trip people up.

**The 13 to 12 per cent step happens at RM5,000, not RM20,000.** Under Part A the
employer share is equivalent to 13 per cent on monthly wages of RM5,000 and
below and 12 per cent above it, while the employee share stays at 11 per cent
throughout. The Schedule expresses this as a visible discontinuity: the band
ending at RM5,000 carries an employer amount of RM650, and the very next band —
RM5,000.01 to RM5,100 — carries RM612. The employer contribution goes *down* as
the salary crosses RM5,000.

**RM20,000 is where the method changes, not the rate.** Above RM20,000 you stop
reading the table and start calculating: 12 per cent employer, 11 per cent
employee, on actual wages. Part A directs that the total contribution including
cents is rounded up to the next ringgit. The EPF's example: wages of RM21,250
give RM2,550 and RM2,337.50, totalling RM4,887.50, remitted as RM4,888.

The same rounding-up rule applies to Part C above RM20,000 at 6 and 5.5 per cent,
and to Part E at 4 per cent employer with nil employee.

### Parts B and D no longer exist

If you are working from an older schedule, note that **Parts B and D were deleted
by Act A1760/2025**. They contained the old elective regime for non-citizens who
registered from 1 August 1998, under which the employee contributed a percentage
and the employer paid a flat RM5 per month regardless of salary.

That RM5 figure still appears in a great deal of published guidance and in
payroll systems that have not been updated. It is gone. Non-citizens now sit
under Part F at 2 per cent from each side, mandatory rather than elective, from
the October 2025 wage month. See
[EPF for foreign workers](/en/employment/epf-foreign-workers-malaysia).

Separately, Part C(a) — which used to cover Malaysian citizens aged 60 and over —
was deleted by P.U. (A) 370/2018, and that population moved to Part E. A guide
that puts 60-plus Malaysian citizens at 6.5 per cent is reading a schedule that
is eight years out of date.

## How do you actually remit?

Contributions for a wage month are due **on or before the 15th day of the
following month**. Wages for January are the February contribution month,
payable by 15 February.

The employer pays both shares to the EPF and may deduct the employee's share
from salary. Contributions must be paid in ringgit denominations without any
cent value.

Submission runs through i-Akaun (Employer), the e-Payroll facility, or the
i-Akaun (Employer) app.

### Age boundaries

The minimum age to register and contribute as an EPF member is **14**. The
maximum age of contribution is **75**. Between 60 and 75, contributions continue
but at the reduced Part C or Part E rates; above 75 the liability ends.

## Worked examples from the EPF itself

These are the EPF's published illustrations, reproduced because they are the
cleanest available demonstration that the table and the percentage disagree.

| Scenario | Wages | Correct (table) | By percentage |
| --- | --- | --- | --- |
| Malaysian citizen, under 60, Part A | RM3,250 | RM424 + RM359 = RM783 | RM781 |
| Malaysian citizen, under 60, Part A | RM6,710.80 | RM816 + RM748 = RM1,564 | RM1,543.49 |
| Malaysian citizen, 60+, Part E | RM3,250 | RM131 + RM0 = RM131 | RM130 |
| Permanent resident, 60+, Part C | RM3,250 | RM212 + RM180 = RM392 | RM390 |
| Malaysian citizen, under 60, Part A | RM21,250 | 12% + 11%, rounded up = RM4,888 | (percentage is correct here) |

The pattern holds across every Part: below RM20,000 the table wins, above it the
percentage is the law.

## Common mistakes

**Configuring payroll with a percentage rule.** The most expensive and most
common error. A 13 per cent rule under-contributes on nearly every salary below
RM20,000. Test your system against three sample wages before trusting it.

**Applying the RM5,000 step to the employee share.** It applies only to the
employer share, which moves from 13 to 12 per cent. The employee share is
11 per cent on both sides of the line.

**Still using the flat RM5 employer contribution for foreign workers.** Deleted
along with Parts B and D by Act A1760/2025. The figure is 2 per cent now, from
both sides.

**Putting Malaysian citizens aged 60 and over on Part C.** They moved to Part E
in 2018. Part E is 4 per cent employer and nil employee — a materially different
number.

**Rounding down, or remitting cents.** Contributions are paid in whole ringgit,
and where the percentage method applies the total is rounded **up** to the next
ringgit.

**Assuming the Third Schedule is stable.** The EPF maintains a dated archive of
schedules precisely because employers settling late contributions must apply the
schedule in force for that wage month, not the current one. If you are
regularising arrears, pull the schedule for the correct effective period.

## What's next

Check your payroll output against the Third Schedule for a low, a middle and a
high salary — under RM5,000, between RM5,000 and RM20,000, and above RM20,000.
Those three tests exercise every mechanic on this page.

If you employ non-citizens, read
[EPF for foreign workers](/en/employment/epf-foreign-workers-malaysia)
next, because Part F is new enough that most systems do not yet implement it.
For the other four monthly streams sharing the same 15th deadline, see the
[payroll compliance calendar](/en/employment/payroll-compliance-malaysia).

## Sources

- Employer Mandatory Contribution — https://www.kwsp.gov.my/en/employer/responsibilities/mandatory-contribution (KWSP)
- EPF Act 1991 Third Schedule — https://www.kwsp.gov.my/en/epf-act-1991-third-schedule (KWSP)
- Third Schedule effective 1 October 2025 — https://www.kwsp.gov.my/documents/d/guest/third_schedule_from_-1-october-2025 (KWSP)
- Contribution For Non-Malaysian Citizen Employees — https://www.kwsp.gov.my/en/employer/responsibilities/non-malaysian-citizen-employees (KWSP)

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