What is Employees Provident Fund (EPF)

EPF stands for Employees Provident Fund. It is a type of long-term savings vehicle that helps with retirement savings. The government regulates pension fund and provides oversight for private sector companies to establish SAFEPASS or EPF schemes, among other requirements. Employees can contribute up to 12% of their salaries annually toward their EPF account, while employers are required to contribute 13%. Employees are also allowed a number of withdrawal options including an emergency loan and partial withdrawals prior to retirement age, which varies depending on the lifetime balance in the account. Withdrawals after retirement are only available in full at retirement age or when the employee dies. Employers are required by law to contribute a certain amount to the fund each month. This amount is known as the rate of contribution, and can be from 1% to 2% depending on the industry. The rate of contribution for employers is determined by the government and changes every few years. As a result, an employee’s monthly salary is lower than it would otherwise be in order to account for their EPF contributions. Employees can withdraw their whole EPF balance. The withdrawal limit is generally RM100,000, although there are exceptions. For those who are younger than 55, the withdrawal limit is half of their EPF balance. These limits increase as the age of retirement increases. After retirement, an employee can only withdraw from their EPF balance if there is no other source of income or for medical reasons.