Prepared by:

Mizar Mustafa 2009481448

Nur Hazwani Bt Abd Hamid 2008349171
Noor Zakiah Bt Khairuzzaman 2008280242
Norsalmiah Bt Kamaruddin 2009208448
Fatin Najiha Bt Mohd Napiah 2008743521

Prepared For:
Miss Afzan Nor Bt Hj Talib
What is EPF ?
Employees Provident Fund (EPF) is a compulsory
savings scheme in Malaysia.
The objective is to provide saving for old age
retirement to its members.
It is commonly known as KWSP or Kumpulan Wang
Simpanan Pekerja.
Act related with EPF is Employees Provident Fund
Act 1991 - the act that governing the Employees
Provident Fund in Malaysia.
Definition of Wages under
EPF Act
All remuneration in money, due to an employee
under his contract of service or apprenticeship and
includes any bonus or allowance payable by the
employer to the employee but does not include:
Service charge
Overtime payment
Any gratuity
Any retirement benefit
Any retrenchment or termination benefit
Any travelling allowance
The Purpose of The Law
To provide financial relief or social security protection for
workers through compulsory savings
Provides retirement benefits for members through
management of their savings in an efficient and reliable
manner
To help employees from both private and non-pensionable
public sectors save a fraction of their salary in a lifetime
banking scheme
To preserving and growing the saving of its members in a
prudent manner in accordance with best practices in
investment and corporate manner
Employee
EPF Act Section 2:
Employees :
 sixteen years
 employed under a contract of service or apprenticeship,

 whether written or oral and

 whether expressed or implied, to work for an employer

 All employees in Malaysia should registered under EPF

Who are Liable to Contribute?
Directors who receive salary/wage.
Part time, temporary and probationary employees.
Employees who are 75 years old and still working
regardless whether they have or have not made the full
withdrawal / part of it after attaining the age of 55 years
old.
Employees who are 55 years and above, and have never
been a member of the EPF.
Employees who have withdrawn their savings under
the Pensionable Employees Withdrawal, and work with
employers other than the Federal or State Governments,
or any statutory bodies or local authorities.
Who Is Not Mandatory To Contribute But Can
Contribute?
Persons Who Are Not Employees
Payments Which Are Mandatory
For EPF Contribution 
Salary/Wage;
Bonuses;
Allowances;
Commission;
Accrued salary/wage;
Salary/wage for maternity leaves;
Salary/wage for study leaves;
Salary/wage for half-pay leaves;
Directors salary/wage; and
Wages
Section 2 of EPF Act 1991:

All remuneration in money

Employee under contract of service or apprenticeship.
to be paid monthly, weekly, daily or otherwise,
any bonus or allowance payable by the employer to the
employee
does not include—
(a) service charge;
(b) overtime payment;
(c) gratuity; or
(d) retirement benefit.
Rate of contribution for the month
Employer contribution= 12%
Employee contribution= 11% (latest=8%)

Amount of wages for Rate of contribution for the month

the month
By the By the Total
employer employee contribution
From (8%) 2,000.01 2,020.00 243 162 405
From (11%) 2,000.01 2,020.00 223 182 405

Amendment of Third Schedule of the EPF Act 1991

 Section 43.(1)
Part C, Third Schedule of the  EPF Act 1991

the contribution rate for members

Part D, Third Schedule of the  EPF Act 1991

the rate of  contribution  for the  foreigners 

Contributions received on employee behalf from employer
will be credited into the two accounts:
Types Of Withdrawal
 Age 50 Years Withdrawal
 Age 55 Years Withdrawal
 Withdrawal to Reduce / Redeem Housing Loan
 Incapacitation Withdrawal
 Leaving Country Withdrawal
 Education Withdrawal
 Pensionable Employees Withdrawal And Optional Retirement Withdrawal
 Members’ Savings Investment Withdrawal
 Withdrawal to Purchase a House
 Withdrawal to Build a House
 Withdrawal Of Savings Of More Than RM1 Million
 Housing Loan Monthly Instalment Withdrawal
 Death Withdrawal
 Flexible Housing Withdrawal *NEW*
 Health Withdrawal
 Withdrawal Of Contributions
 Section 54 (1)
 54. (1) No sum of money standing to the credit of a member of the
Fund may be withdrawn except with the authority of the Board and,
subject to any regulations and rules made under this Act, such
authority shall not be given unless the Board is satisfied that—
 
(a) the member of the Fund has died;
(b) the member of the Fund has attained the age of fifty-five years;
(c) the member of the Fund is physically or mentally incapacitated
from engaging in any further employment; or
(d) the member of the Fund is about to leave Malaysia with no
intention of returning thereto or of residing in the Republic of
Singapore.
Withdrawal
Pensionable Employees Withdrawal
Employed in the Public Service and
contributed to the EPF until the Public
Service Department (PSD) emplaced
you in the pensionable establishment;
OR
Employed with the Ministry of
Defence/Military Service and
contributed  to the EPF and have been
emplaced in the pensionable
establishment by the PSD.
Optional Retirement Withdrawal
You have chosen optional retirement
from the Public Service and  no longer
employed;
OR
You have chosen optional retirement
from the Public Service and re-
employed with a different employer or
self-employed;
OR
You have served in a government
agency and have opted for retirement
under a privatisation or corporatisation
exercise but continue to work with the
same agency.
Offences And Penalties
If employer fails to deduct your wages for EPF
contributions at the time your wages are paid
employer would have committed an offence under the
Act and if found guilty, employer may be imprisoned up
to six (6) months or fined up to RM2,000 or both
• If employers fail to register their employees with the
EPF within 7 days of employment under law.
– section 41(2) of the EPF Act 1991
 imprisonment for a term not exceeding 3 years or
fine not exceeding RM10,000 or to both
 Returning The Savings Withdrawn
If employees their withdrawn savings to buy or build a house,
use all the savings withdrawn for that purpose only. Otherwise,
return the amount withdrawn to the EPF within six months
from the date of withdrawal. Failure to do so is an offence
punishable under 
Section 58A of the EPF Act 1991.
 If
convicted, you can be imprisoned for up to six
months or fined up to RM2,000 or both.
 Fraudulent Withdrawal Of EPF Savings
If employees attempt to withdraw or have their withdrawn
savings fraudulently, they have committed an offence under: 
Section 59 of the EPF Act 1991.
 The penalty under this Section is imprisonment for a
term of up to three years or a fine up to RM10,000 or
both.
Section 61 of the EPF Act 1991
 ifyou or any other parties collaborate to withdraw the
savings of EPF Members fraudulently. 
Employer’s Legal Obligation
Under The Law
a) Duty of employer to register with the Board.
b) Duty to register the employee
c) Duty of employer to contribute on behalf of
employees
d) Duty of employer to contribute for employees
e) Duty to cooperate with the inspector
Definition of Employer
Employers is someone who is said to be the one who
made an agreement with an employees for the service
rendered and the agreement is normally called as
contract of service.

Who control the employees?

Who provide the facilities and equipment?
Who are paying for employees’ wages and salaries?
Section 2 : "employer" means the person with whom
an employee has entered into a contract of service
or apprenticeship and includes—
(a) a manager or agent
(b) any body of persons
(c) any Government, department of Government,
statutory bodies, local authorities or other
bodies.
a) Duty of Employer to Register With The Board.
Upon the day of paying the wages and salary of employees,
the employer have a duty to register with the board about
their existence.

In the case of the employer are no longer being an

employer, he need to inform the Board within 3o days.

Disobey of the employer to do so may cause them to be

imprisonment about <3 years or fines <RM10,000 or both.
41. (1) Every employer shall, unless he is already
registered with the Board, before the end of the first
week in the first month in which he is paying wages in
respect of which he is required to pay contributions
under this Act, register with the Board in the manner
as may be prescribed by the Board.

41.(3) Where any person ceases to be an employer,

within the meaning of this Act, he shall, within thirty
days of such cesser, notify the Board of the same in
the manner as may be prescribed by the Board.
b) Duty To Register The Employee

It is the responsibility of employer to enroll the

employee as a EPF subscriber.

Provide the information detailed about the

employees regarding the names, age, status, and etc.

Help the inspector to make any inspection.

c) Duty of Employer to contribute on behalf of
employees

The EPF Act 1991 requires all employers to pay on

behalf of employees their monthly contributions to
EPF before or on the 15th day of every month.

Failed to comply with the act will caused the

employers to be fined.
d) Duty of employer to contribute for employees
EPF Act 1991 stated that each employers are responsible
to contribute a proportion of amount to EPF account

Failed to comply with the act will caused the employers

to be fined.

 2007, the EPF contribution is up to 11% of employee’s

monthly salary on the part of employees, while the
employer is obligated to additionally fund at least 12% of
employee's salary to the savings at the same time.
45. (1) …the employer shall, in the first instance, be
liable to pay both the contributions payable by
himself and also, on behalf of and to the exclusion of
the employee…
c) Duty of employer to prepare and furnish statement
of wages.
Employer are accountable to prepare a statement of
wages showing the detailed amount of deduction and
total salary received by employees.

Any incorrect declaration, failure to furnish or return

documents is said to be guilty may be liable to:
a) imprisonment < 3 years; or
b) a fine < RM10,000; or
c) Both.
• 42.(1) Every employer shall prepare and furnish
statement of wages to each and every employee and
the statement of wages shall contain such information
as may be prescribed by the rules.
d) Duty to cooperate with the inspector

Inspector include of the General Manager, Deputy

General Managers and Assistant General Managers.

They are the person who have power to exercise any

action necessary to ensure the Act is carried out.

Employer need to cooperate with the inspector to

provide or produced detailed of any information that
can help him in exercising his duties.
 36. (1) No person shall—
(a) refuse any Inspector exercising his powers to access to any premises or
part thereof;
(b) assault, obstruct, hinder or delay such Inspector in effecting any
entrance which he is entitled toeffect;
(c) fail to comply with any lawful demands of an Inspector in the
execution of his powers, functions and duties under section 35;
(d) refuse to give to an Inspector any information which may reasonably
be required of him;
(e) fail to produce to, or conceal or attempt to conceal from, an Inspector,
any property, book, other document, or article in relation to which
the Inspector has reasonable grounds for suspecting that an offence
has been or is being committed under this Act; or
(f) furnish to an Inspector as true, information which he knows or has
reason to believe to be false.
Withdrawal & Benefit Scheme
Retirement Withdrawals
When a member reach the retirement age of 55 years, he/she can
choose to do any of the followings:-
a)Withdraw all the savings in a lump sum.
b)Withdraw all the savings in monthly instalments or part
of the savings in a lump sum and the balance periodically
on the following conditions:
The member must have, at least, RM12,000 in his account
for the periodical withdrawal payments covering a period
of at least five years.
c)Withdraw the dividend annually, leaving the principle
with the Fund.
Pre Retirement Benefits

a) Housing
 A member can withdraw has savings in Account II for the

purpose of purchasing/building a house.

 The amount he can withdraw is the difference between

the cost of the house and the housing loan plus 10% of
the cost or the balance in Account II, whichever is lower.

 Withdraw = Cost – ( Housing loan + 10% of cost)

b) Redemption/ Reduction/ Mortgage Loan

 Housing Loan
A member can withdraw his savings in Account II to
reduce outstanding housing loan annually subject to :
 amount of not less than RM500
 it also can be withdrawn before the employees reach 55
years.

 Education
Members are allowed to withdraw their savings to
finance their education at diploma level or higher for
themselves and their children.
Age 50 Years
A member can withdraw his savings in Account II
when he attains age 50 years to make preparation
for retirement (30%).

Health
Members may withdraw their savings in Account II
to pay for the cost of their medical treatment or
their parents, spouse or children’s critical illness.
However, members will not be eligible to withdraw
for this purpose if the cost is fully borne by their
employers.
Leaving The Country Withdrawal

Members who are foreign citizens, intending to leave the

country may withdraw their entire savings under this
withdrawal.

However, members who are Malaysian citizens intending

to leave the country with no intention to return, may
withdraw all savings provided they revoke their Malaysian
citizenship.
• Other Withdrawals

a) A member can withdraw all his savings on being

incapacitated mentally or physically. In addition he will
also receive an incapacitation benefit of RM5,000 if he is
below 55 years of age.
b)A member can withdraw all his savings, when he leaves
Malaysia permanently. As proof of his intention to leave
the country permanently he needs to renounce his
citizenship.
c) On a member’s death, his nominee/next of kin may
withdraw all his savings. In addition, the member’s next of
kin will also be paid the death benefit of RM2,500 if the
deceased members has not attained 55 year age.
c) Dividend

 Returns on investments is distributed to members as

dividends annually. The amount to be appropriated as
dividend is the income less operating expenditure and
payments of Death and Incapacitation Benefits. The EPF
guarantees an annual dividend of at least, 2.5%.
d) Tax Incentives

The employee’s share of the contributions

together with life insurance premium is tax
deductible up to RM6,000. In addition EPF’s
investment income is not taxed and this incentive
is enjoyed by members in the form of higher
dividends. Lastly, both pre and retirement
withdrawals are also not taxed.
Analysis of The EPF
 Any
Questions?
THE END