What is the difference between EPF Account 1 and Account 2?

Account 1 (70% of contributions) is for retirement and can only be withdrawn at age 55. Account 2 (30% of contributions) can be used before retirement for approved purposes like housing, education, and healthcare.

When can I withdraw my EPF?

Full withdrawal is available at age 55 (retirement age). Partial withdrawals are allowed for housing (age 50+), education, healthcare, and other approved purposes. Account 2 allows more flexibility for pre-retirement withdrawals.

Is EPF contribution tax-deductible?

Yes! Employee EPF contributions are tax-deductible up to RM4,000 per year under tax relief for EPF/approved schemes. Employer contributions are also NOT subject to income tax, and EPF dividends are tax-free.

How is EPF dividend calculated?

EPF dividend is calculated annually based on your account balance and declared dividend rate. The rate varies each year (average 5-6% over past 5 years). Dividends are credited directly to your EPF account and compound over time.

Can I contribute more than the minimum to EPF?

Yes! You can make voluntary contributions through i-Saraan (for self-employed) or by contributing more than the mandatory rate through your employer. Voluntary contributions also earn EPF dividends and are eligible for tax relief.

What happens to my EPF if I leave Malaysia?

Malaysian citizens can withdraw EPF when permanently leaving Malaysia, but must provide proof of emigration. For non-citizens, you can withdraw your EPF savings when leaving Malaysia permanently or when your work permit expires.

How do I check my EPF balance?

You can check your EPF balance online through the i-Akaun portal (KWSP website), EPF mobile app, or by visiting any EPF office with your IC. You'll receive annual statements showing your contributions, dividends, and total balance.

Can I withdraw EPF before 55?

Yes, partial withdrawals from Account 2 are allowed for housing, education, healthcare, and investment purposes. Full withdrawal before 55 is only permitted in cases of permanent disability, death, or permanent departure from Malaysia.

EPF Calculator Malaysia 2025

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EPF Contribution Breakdown

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What is EPF (Employees Provident Fund)?

EPF, or the Employees Provident Fund (known as KWSP - Kumpulan Wang Simpanan Pekerja in Malay), is Malaysia's primary mandatory retirement savings and social security institution. Established in 1951, EPF helps employees build retirement savings through systematic monthly contributions from both employee and employer throughout their working years.

EPF is one of the world's largest provident funds, managing over RM1 trillion in savings for more than 15 million members. The fund not only provides retirement security but also offers dividends that have consistently outperformed inflation, making it a crucial pillar of Malaysia's social security system.

How Does EPF Work?

Every month, a percentage of your salary is automatically deducted as your EPF contribution. Your employer also contributes a percentage on your behalf. These combined contributions are deposited into your EPF account, where they earn annual dividends declared by the EPF Board. The dividend rates have averaged around 5-6% over the past decade, providing tax-free compound growth for your retirement savings.

EPF contributions are split between two accounts:

Account 1 (70%) - Reserved primarily for retirement, withdrawable at age 55
Account 2 (30%) - Can be used for pre-retirement purposes like housing, education, and healthcare

Who Needs to Contribute to EPF?

EPF contribution is mandatory for all Malaysian citizens and permanent residents working in the private sector. For employees earning RM5,000 or less, the employer must register them with EPF within 7 days of employment. Self-employed individuals can join voluntarily through the i-Saraan scheme.

Since 2025, non-Malaysian employees are also required to contribute to EPF at a rate of 2% (employee) and 2% (employer), ensuring retirement protection for foreign workers in Malaysia.

💡 Pro Tip: Use our EPF Calculator above to see exactly how much you and your employer contribute each month, and project your savings growth until retirement. Understanding your EPF helps you plan better for your financial future.

EPF Contribution Rates 2025

EPF contribution rates vary based on employee age, salary level, and citizenship status. Below are the official KWSP contribution rates for 2025:

Category	Employee Rate	Employer Rate	Total
Malaysian (Under 55) Standard rate for most employees	11%	12% or 13%*	23-24%
Malaysian (Age 55-60) Reduced rate for pre-retirement	5.5%	5.5%	11%
Malaysian (Above 60) Optional contribution	0%	0%	0%
Non-Malaysian New rate effective 2025	2%	2%	4%

*Employer Contribution Note: Employers contribute 13% if employee salary is RM5,000 or below, and 12% if salary exceeds RM5,000. This applies to Malaysian employees under 55 years old.

🎯 Account 1 (70%)

Reserved for retirement. Full withdrawal available at age 55. Can be used for partial housing withdrawal at age 50.

💼 Account 2 (30%)

Flexible account for pre-retirement needs: housing, education, healthcare, and approved investments.

EPF Account 1 vs Account 2: What's the Difference?

Your EPF savings are automatically split into two accounts with different purposes and withdrawal rules. Understanding the difference helps you make better financial decisions and plan withdrawals strategically.

Account 1

70% of contributions

Simpanan Semasa (Current Savings)

Primary retirement fund. Withdrawable at age 55 with full access to your savings for retirement.

Withdrawal Options:

Age 55: Full withdrawal for retirement
Age 50: Housing withdrawal (partial)
Permanent disability
Death (to beneficiaries)

Account 2

30% of contributions

Simpanan Sejahtera (Flexible Savings)

Flexible account for approved pre-retirement needs. More withdrawal options before age 55.

Approved Uses:

Housing purchase/construction
Education (self/children)
Healthcare expenses
Unit trust investments
Hajj pilgrimage

Strategic Tip: While Account 2 offers flexibility for pre-retirement needs, leaving funds untouched allows maximum compound growth through EPF dividends. Consider your long-term retirement needs before making early withdrawals.

EPF Withdrawal Guide: When Can You Access Your Savings?

EPF offers various withdrawal options depending on your age, needs, and account type. Understanding these options helps you plan your finances effectively.

Age-Based Withdrawals

Age 55 - Full Retirement Withdrawal

Withdraw your entire EPF savings (both Account 1 & 2) upon reaching age 55. This is the primary retirement benefit. You can choose lump sum or periodic withdrawals.

Age 50 - Housing Withdrawal

Withdraw from Account 1 for housing purposes (purchase, construction, or loan reduction). Requires submission of property documents and approval.

Before Age 50 - Account 2 Withdrawals

Use Account 2 for housing, education, healthcare, unit trust investments, and Hajj. Each purpose has specific eligibility requirements and documentation.

Special Circumstances Withdrawals

Permanent Disability: Full withdrawal if certified medically unfit to work
Critical Illness: Partial withdrawal for serious medical conditions
Leaving Malaysia: Full withdrawal for permanent emigrants (with proof)
Death: Beneficiaries can claim full EPF savings of deceased member
Unemployment: Partial withdrawal if unemployed for certain period (Account 2)

How to Apply for EPF Withdrawal

You can apply for EPF withdrawal through:

Online: i-Akaun portal (fastest method, requires i-Akaun activation)
EPF Office: Visit any KWSP branch with required documents
Employer: Through employer for age 55 retirement withdrawal

Important: EPF withdrawals are tax-free. However, consider the long-term impact on your retirement savings before making early withdrawals. Lost compound growth can significantly reduce your retirement nest egg.

EPF Dividends: Tax-Free Returns on Your Savings

One of EPF's most attractive features is the annual dividend paid on your savings. EPF dividends are declared yearly based on the fund's investment performance, and they're completely tax-free. This means your retirement savings grow faster through the power of compound interest.

Historical EPF Dividend Rates

Year	Dividend Rate	Notes
2024	5.8%	Estimated (pending official announcement)
2023	5.7%	Strong fund performance
2022	5.5%	Post-pandemic recovery
2021	6.1%	Market rebound year
2020	4.8%	COVID-19 pandemic impact

📈 5-Year Average

5.58%

Consistently beats inflation and fixed deposit rates

💰 Tax-Free Growth

100%

All dividends are tax-exempt, maximizing your returns

How EPF Dividends are Calculated

EPF dividends are calculated based on your monthly average balance for the year. The more consistent your savings, the higher your dividend earnings. Dividends are credited annually, typically in February/March for the previous year.

Example Calculation:

If you have RM100,000 in your EPF account and the dividend rate is 5.5%, you'll earn RM5,500 that year, credited directly to your account. This compounds year after year, significantly growing your retirement savings.

5 Tips to Maximize Your EPF Savings

Make Voluntary Contributions

Increase your contributions beyond the mandatory 11%. Voluntary contributions also earn EPF dividends and qualify for tax relief up to RM4,000/year.

Delay Account 2 Withdrawals

While Account 2 allows pre-retirement withdrawals, leaving funds untouched maximizes compound dividend growth over time.

Join i-Saraan if Self-Employed

Freelancers and business owners can build retirement savings through i-Saraan, with government co-contributions of up to RM250/year.

Start Early & Stay Consistent

The power of compound interest means starting early, even with small amounts, yields significantly larger retirement savings.

Monitor Your Account Regularly

Use i-Akaun to track contributions, dividends, and projections. Regular monitoring helps you stay on track for retirement goals.

Frequently Asked Questions About EPF

EPF (Employees Provident Fund) or KWSP (Kumpulan Wang Simpanan Pekerja) is Malaysia's mandatory retirement savings scheme. It's a social security institution that helps employees save for retirement through monthly contributions from both employee and employer. Your savings earn annual tax-free dividends and are withdrawable at age 55.

For Malaysian citizens under 55, the standard employee contribution is 11% of monthly salary. Employers contribute 12% (if salary > RM5,000) or 13% (if salary ≤ RM5,000). Total contribution is 23-24% of your salary. You can also make voluntary contributions through i-Saraan or by increasing your contribution rate to save more for retirement.

Account 1 (70% of contributions) is for retirement and can only be withdrawn at age 55 or for partial housing withdrawal at age 50. Account 2 (30% of contributions) is more flexible and can be used before retirement for approved purposes like housing, education, healthcare, and investments. Both accounts earn the same annual dividend rate.

Full withdrawal is available at age 55 (retirement age). Partial withdrawals are allowed for housing (age 50 for Account 1, anytime for Account 2), education, healthcare, and other approved purposes from Account 2. Special circumstances like permanent disability, critical illness, or leaving Malaysia permanently also allow early withdrawal.

Yes! Employee EPF contributions are tax-deductible up to RM4,000 per year under tax relief for EPF/approved schemes (Category 6 in tax return form). Employer contributions are also NOT subject to income tax. Additionally, all EPF dividends are completely tax-free, making it one of Malaysia's most tax-efficient investment vehicles.

EPF dividend is calculated annually based on your monthly average balance for the year. The dividend rate is declared by the EPF Board (typically 5-6% in recent years) and applied to your average balance. For example, if your average balance is RM100,000 and the dividend rate is 5.5%, you earn RM5,500 tax-free that year. Dividends are credited in February/March.

Yes! You can make voluntary contributions through i-Saraan (for self-employed) or by requesting higher deductions through your employer (for employees). Voluntary contributions earn the same annual dividend and qualify for tax relief. Self-employed members contributing to i-Saraan also receive government incentive of up to RM250/year.

Malaysian citizens can withdraw EPF when permanently leaving Malaysia (emigration), but must provide proof like cancellation of citizenship or permanent resident status abroad. For non-Malaysian citizens, you can withdraw your EPF savings when permanently leaving Malaysia or when your work permit expires. Processing typically takes a few weeks after submitting required documents.

You can check your EPF balance online 24/7 through i-Akaun at kwsp.gov.my (requires one-time registration), the KWSP i-Akaun mobile app, SMS by texting KWSP to 15888, or by visiting any EPF office with your IC. The i-Akaun portal shows detailed breakdown of contributions, dividends, and transaction history.

Yes, partial withdrawals from Account 2 are allowed before 55 for housing, education, healthcare, unit trust investments, and other approved purposes. Account 1 allows housing withdrawal starting at age 50. Full withdrawal before 55 is only permitted for permanent disability, critical illness, death, or permanent departure from Malaysia. However, early withdrawals reduce your retirement savings and lost compound dividend growth.