Managing payroll in Malaysia requires accuracy, timing, and a clear understanding of statutory contribution rules. For employers, one of the most important monthly payroll responsibilities is EPF contribution, also known as KWSP contribution. In 2026, Malaysian employers must pay close attention to EPF rates, payment deadlines, employee categories, and the major mandatory change involving non-Malaysian citizen employees.
This employer’s guide to EPF 2026 explains the latest contribution rates, key deadlines, mandatory changes, payroll responsibilities, and simple action points for HR teams, payroll officers, finance departments, business owners, factory administrators, and companies managing local and foreign employees in Malaysia.
EPF is not only a payroll deduction. It is part of employee retirement savings and a legal employer responsibility. Employers must deduct the employee’s share from wages, add the employer’s share, and remit the total contribution to EPF every month. According to KWSP, employers must ensure accurate monthly contributions are deducted from employees’ salaries and remitted to EPF, with contributions payable according to the rates set out in the Third Schedule of the EPF Act 1991.
1. EPF 2026 at a Glance
The table below gives employers a simple overview of EPF contribution rules for 2026 payroll planning.
| Item | 2026 Employer Guide |
|---|---|
| EPF payment deadline | On or before the 15th of the following month |
| Employer registration deadline | Within 7 days from the date the employer becomes liable to contribute |
| Malaysian employees below 60, wages RM5,000 and below | Employee 11%, employer 13% |
| Malaysian employees below 60, wages above RM5,000 | Employee 11%, employer 12% |
| Malaysian employees age 60 and above | Employee 0%, employer 4% |
| Permanent residents and non-Malaysians registered before 1 August 1998, age 60 and above | Employee 5.5%, employer 6.5% or 6% depending on wage level |
| Non-Malaysian citizen employees from October 2025 wages | Employee 2%, employer 2% |
| Domestic servants | Excluded from mandatory non-Malaysian employee EPF rule |
| Key employer action | Update payroll software, employee categories, and foreign worker records |
KWSP states that employers must make monthly EPF payment on or before the 15th of the month, and the employer must pay both the employer’s share and the employee’s share to EPF. The employer may deduct the employee’s share from the employee’s salary.
2. What Is EPF Contribution?
EPF contribution is a mandatory retirement savings contribution for eligible employees in Malaysia. The contribution is paid monthly by both employer and employee, depending on the employee’s category, age, wage level, and citizenship status.
For employers, EPF contribution is a legal payroll obligation. Once an employer hires an employee and becomes liable to contribute, the employer must register with EPF, calculate the monthly contribution correctly, deduct the employee portion from wages, pay the employer portion, and submit the full contribution to EPF.
This process must be handled carefully because EPF affects employee savings, payroll accuracy, compliance records, and company reputation. Wrong contribution rates, late payments, incorrect employee classification, or missing foreign worker registration can create payroll problems and compliance risk.
3. EPF Employer Registration Deadline 2026
Every employer should know this number:
7 days
KWSP states that an employer shall register with EPF within 7 days from the date the employer becomes liable to contribute, which means as soon as an employee is employed.
| Employer Situation | Required Action |
|---|---|
| Company hires first employee | Register as EPF employer within 7 days |
| Company already has EPF employer number | Continue using existing employer number |
| Company hires foreign workers | Check employee registration and contribution requirements |
| Company hires both Malaysian and non-Malaysian employees | Existing employer number can be used |
This is especially important for new businesses, startups, retail outlets, factories, service companies, and companies hiring staff for the first time. EPF registration should not be delayed until month-end payroll. It should be done as soon as the company becomes liable to contribute.
4. EPF Payment Deadline 2026
Every payroll team should remember this number:
15th day of the following month
For example:
| Salary Month | EPF Contribution Month | Payment Deadline |
|---|---|---|
| January 2026 salary | February 2026 contribution | On or before 15 February 2026 |
| February 2026 salary | March 2026 contribution | On or before 15 March 2026 |
| March 2026 salary | April 2026 contribution | On or before 15 April 2026 |
| October 2026 salary | November 2026 contribution | On or before 15 November 2026 |
KWSP explains that salary for January is treated as the February contribution month and must be paid before or on 15 February.
If the 15th falls on a public holiday or weekend, KWSP states that payment made on the next working day will not be imposed with a Late Payment Charge.
5. EPF 2026 Contribution Rates for Malaysian Employees Below 60
For Malaysian employees below 60 years old, the common EPF rates are based on monthly salary level.
| Employee Category | Monthly Salary | Employee Share | Employer Share |
|---|---|---|---|
| Malaysian employee below 60 | RM5,000 and below | 11% | 13% |
| Malaysian employee below 60 | More than RM5,000 | 11% | 12% |
KWSP lists the contribution rate for Malaysian employees, permanent residents, and non-Malaysians registered as EPF members before 1 August 1998. For the RM5,000 and below salary category, the employee share is 11% and employer share is 13%. For more than RM5,000, the employee share is 11% and employer share is 12%.
Simple example for understanding:
| Monthly Wage | Employee Share | Employer Share | Payroll Note |
|---|---|---|---|
| RM3,000 | 11% | 13% | Common rate for wages RM5,000 and below |
| RM5,000 | 11% | 13% | Still within RM5,000 category |
| RM5,500 | 11% | 12% | More than RM5,000 category |
| RM8,000 | 11% | 12% | More than RM5,000 category |
Important payroll note: EPF contribution should follow the official Third Schedule wage range or percentage calculation method where applicable. KWSP specifically shows that for certain wage ranges, the correct approach is to refer to the wage ranges in the Third Schedule, not simply multiply wages by percentage.
6. EPF 2026 Rates for Employees Age 60 and Above
For Malaysian employees who have reached age 60, the common contribution treatment is different.
| Employee Category | Employee Share | Employer Share |
|---|---|---|
| Malaysian employee age 60 and above | 0% | 4% |
This means the employee does not contribute from salary, but the employer still contributes 4%. KWSP’s contribution rate table shows Malaysian employees at age 60 and above under the employer share of 4% and employee share of 0%.
Employers must be careful when an employee reaches 60 years old. Payroll software should automatically update the contribution category at the correct time, or HR must manually review it. If the system continues using the below-60 rate, the payroll deduction may be wrong.
7. EPF 2026 Rates for Permanent Residents and Certain Existing Non-Malaysian Members
For permanent residents and non-Malaysian employees who were registered as EPF members before 1 August 1998, the contribution rate remains under the existing status quo category.
| Employee Category | Age | Monthly Salary | Employee Share | Employer Share |
|---|---|---|---|---|
| Permanent resident or non-Malaysian registered before 1 August 1998 | Below 60 | RM5,000 and below | 11% | 13% |
| Permanent resident or non-Malaysian registered before 1 August 1998 | Below 60 | More than RM5,000 | 11% | 12% |
| Permanent resident or non-Malaysian registered before 1 August 1998 | 60 and above | RM5,000 and below | 5.5% | 6.5% |
| Permanent resident or non-Malaysian registered before 1 August 1998 | 60 and above | More than RM5,000 | 5.5% | 6% |
KWSP’s non-Malaysian citizen employee guide states that permanent residents and non-Malaysians registered before 1 August 1998 remain under the status quo rate, including 13% or 12% employer share and 11% employee share below 60, and 6.5% or 6% employer share with 5.5% employee share after reaching 60.
8. Mandatory Change: EPF for Non-Malaysian Citizen Employees
The biggest EPF payroll change affecting 2026 is the mandatory contribution for non-Malaysian citizen employees.
KWSP announced that mandatory contributions for non-Malaysian citizen employees took effect beginning with wages for October 2025, corresponding to the contribution month of November 2025. Under this policy, both employers and non-Malaysian employees are required to contribute 2% of monthly wages.
| Item | Mandatory EPF Rule for Non-Malaysian Employees |
|---|---|
| Effective salary month | October 2025 wages |
| First contribution month | November 2025 |
| Employer contribution | 2% |
| Employee contribution | 2% |
| Applies to | Non-Malaysian citizen employees working in Malaysia with valid passport and work pass |
| Excludes | Domestic servants |
| Age condition | Below 75 years of age |
KWSP’s dedicated page states that employers are required to register and contribute for non-Malaysian citizen employees starting 1 October 2025. The same page states that the contribution rate is employer share 2% and employee share 2%.
For 2026, this change is no longer “coming soon.” It should already be built into payroll settings.
9. Which Foreign Workers Are Covered?
Employers must check whether their non-Malaysian workers fall under the mandatory EPF rule.
| Covered | Not Covered Under Mandatory Rule |
|---|---|
| Non-Malaysian citizen employees working in Malaysia | Domestic servants |
| Employees with valid passport and work pass | Non-Malaysian employees over 75 |
| Employees with pass issued by Immigration Department of Malaysia | Workers without required employment eligibility |
| Visitor’s Pass Temporary Employment or Employment Pass holders, subject to EPF terms | Cases specifically excluded by EPF policy |
KWSP states that mandatory contributions are expanded to all non-Malaysian citizen employees working in Malaysia, excluding domestic workers, who have a valid passport and pass permitting them to work issued by the Immigration Department of Malaysia.
This change is important for factories, construction companies, cleaning companies, logistics companies, plantations, security firms, restaurants, retail groups, and any business that employs foreign workers.
10. Simple EPF 2026 Rate Table for Payroll Teams
The table below is a practical summary for fast payroll review.
| Employee Type | Age | Wage Level | Employee Rate | Employer Rate |
|---|---|---|---|---|
| Malaysian citizen | Below 60 | RM5,000 and below | 11% | 13% |
| Malaysian citizen | Below 60 | Above RM5,000 | 11% | 12% |
| Malaysian citizen | 60 and above | No limit | 0% | 4% |
| PR / non-Malaysian registered before 1 Aug 1998 | Below 60 | RM5,000 and below | 11% | 13% |
| PR / non-Malaysian registered before 1 Aug 1998 | Below 60 | Above RM5,000 | 11% | 12% |
| PR / non-Malaysian registered before 1 Aug 1998 | 60 and above | RM5,000 and below | 5.5% | 6.5% |
| PR / non-Malaysian registered before 1 Aug 1998 | 60 and above | Above RM5,000 | 5.5% | 6% |
| Non-Malaysian citizen employee under new mandatory rule | Below 75 | Monthly wages | 2% | 2% |
This table is designed for easy understanding. For final payroll processing, employers should always follow the official EPF Third Schedule, KWSP guidance, and updated payroll system settings.
11. EPF 2026 Payroll Example
Here is a simple example for Malaysian employees below 60.
| Employee | Monthly Wage | Employee Share | Employer Share | Payroll Category |
|---|---|---|---|---|
| Employee A | RM3,500 | 11% | 13% | Malaysian below 60, RM5,000 and below |
| Employee B | RM5,000 | 11% | 13% | Malaysian below 60, RM5,000 and below |
| Employee C | RM5,001 | 11% | 12% | Malaysian below 60, above RM5,000 |
| Employee D | RM7,000 | 11% | 12% | Malaysian below 60, above RM5,000 |
Here is a simple example for foreign employees under the new mandatory rule.
| Employee | Monthly Wage | Employee Share | Employer Share | Payroll Category |
|---|---|---|---|---|
| Foreign Employee A | RM1,700 | 2% | 2% | Non-Malaysian employee |
| Foreign Employee B | RM2,500 | 2% | 2% | Non-Malaysian employee |
| Foreign Employee C | RM4,000 | 2% | 2% | Non-Malaysian employee |
For foreign employees, employers should also ensure the worker’s EPF registration details, passport details, work pass details, and membership number are properly checked.
12. What Employers Must Update in 2026
The new foreign worker EPF rule means employers cannot depend on old payroll templates. HR and payroll teams should review the full payroll setup.
| Area to Check | Employer Action |
|---|---|
| Employee citizenship | Confirm Malaysian, PR, or non-Malaysian status |
| Age category | Check below 60, 60 and above, or below 75 for foreign employee rule |
| Wage level | Confirm RM5,000 and below or above RM5,000 where relevant |
| EPF membership number | Verify and update employee records |
| Payroll software | Update latest EPF rate settings |
| HRMS employee master data | Ensure passport, pass, IC, and employee status are accurate |
| Monthly payroll report | Review employer and employee share before submission |
| Payment deadline | Submit on or before the 15th of the following month |
A small incorrect employee category can create repeated monthly errors. Companies should run a full employee master data review before processing 2026 payroll.
13. Common EPF Payroll Mistakes Employers Should Avoid
EPF mistakes usually happen when payroll settings are not updated or employee information is incomplete. Employers should avoid these common errors:
| Mistake | Why It Is a Problem |
|---|---|
| Using old foreign worker contribution settings | Foreign employees may be excluded from mandatory EPF contribution |
| Applying Malaysian rates to all employees | Non-Malaysian employees may have different rates |
| Forgetting the RM5,000 wage difference | Employer rate may be wrong for Malaysian employees below 60 |
| Not updating employee age category | Employees reaching 60 may be deducted incorrectly |
| Paying after the deadline | Late payment charges may apply |
| Not registering employer within 7 days | Employer may fail registration responsibility |
| Using simple percentage for all wage ranges | EPF may require Third Schedule wage range method |
| Missing employee membership verification | Contribution may not be credited correctly |
14. EPF 2026 Monthly Payroll Checklist
To keep payroll organized, employers can use this simple monthly checklist.
| Step | Payroll Action |
|---|---|
| 1 | Confirm all active employees are listed |
| 2 | Check new joiners and resignations |
| 3 | Verify Malaysian, PR, and non-Malaysian employee categories |
| 4 | Review age category and employees reaching 60 |
| 5 | Confirm monthly wages subject to EPF |
| 6 | Apply correct employee and employer rates |
| 7 | Check Third Schedule calculation where required |
| 8 | Review EPF contribution report |
| 9 | Submit contribution before or on the 15th |
| 10 | Keep payment proof and payroll report for audit |
This checklist helps employers reduce errors and build a more reliable payroll process.
15. Why HRMS Payroll Software Is Important for EPF Compliance
EPF contribution is simple when a company has only one or two employees. However, it becomes more complicated when a business grows. A company may have local employees, foreign workers, permanent residents, older employees, overtime, allowances, unpaid leave, shift workers, and multiple branches.
A good HRMS payroll system helps employers manage EPF more accurately by:
- Storing employee master data in one place
- Applying correct contribution rates by category
- Updating payroll settings when rules change
- Connecting attendance, leave, overtime, and salary calculation
- Generating EPF contribution reports quickly
- Reducing manual Excel calculation errors
- Keeping records for management and audit
- Helping HR submit payroll on time
For Malaysian businesses, digital payroll is not only about convenience. It helps protect the company from repeated calculation mistakes and gives employees confidence that their salary deductions are handled properly.
16. EPF 2026 Employer Action Plan
Here is a simple action plan for companies preparing their payroll in 2026.
| Priority | Action |
|---|---|
| High | Update payroll software with 2026 EPF rates |
| High | Add mandatory 2% + 2% contribution for eligible non-Malaysian employees |
| High | Verify foreign worker passport and work pass details |
| High | Confirm payment schedule before the 15th of every month |
| Medium | Review employee age category monthly |
| Medium | Train HR and payroll staff on new EPF rule |
| Medium | Check employer registration and employee registration status |
| Low | Keep internal EPF payroll guide for managers and finance team |
This action plan is useful for business owners, HR managers, payroll executives, and finance teams that want a practical compliance workflow.
17. Final Summary: EPF 2026 Made Simple
For 2026 payroll, employers in Malaysia should remember these key numbers:
| Number | Meaning |
|---|---|
| 7 days | Employer registration deadline after becoming liable to contribute |
| 15th | Monthly EPF payment deadline |
| 11% | Common employee share for Malaysian employees below 60 |
| 13% | Employer share for Malaysian employees below 60 with wages RM5,000 and below |
| 12% | Employer share for Malaysian employees below 60 with wages above RM5,000 |
| 4% | Employer share for Malaysian employees age 60 and above |
| 2% + 2% | Mandatory EPF rate for eligible non-Malaysian citizen employees |
The biggest mandatory change for employers is the EPF contribution expansion to non-Malaysian citizen employees. Since the rule took effect from October 2025 wages, every employer with foreign workers should already be processing the 2% employer share and 2% employee share in 2026 payroll.
EPF compliance becomes easier when companies maintain accurate employee records, use updated HRMS payroll software, review statutory settings regularly, and submit contributions on time. A structured payroll system helps businesses avoid errors, reduce administrative workload, and build employee trust.
For Malaysian employers, EPF is not just a statutory deduction. It is part of responsible business management. By understanding the latest EPF 2026 rates, deadlines, and mandatory changes, companies can manage payroll with better confidence, stronger compliance, and smoother monthly operations.
Smart Touch technology pte ltd , www.smartouch.com.sg +65-63964767, sales@smartouch.com.sg , www.smartouch.com.my +607-3889903 sales@smartouch.com.my