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

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.

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 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.