Employees’ EPF Contribution To Be Reduced From 11 To 7 Per Cent Effective April 2020

Among the things that caught our attention (besides the RM100 domestic travel digital voucher) was the deduction of the Employee Provident Fund (EPF) contribution from employees.

Effective April 2020, all employees will be subjected to a 7 per cent statutory contribution to their EPF account. The contribution was previously set at 11 per cent.

According to EPF, the new rate will only be applied until December 2020.

“The new statutory contribution rate for employees will affect April 2020’s wage (May 2020’s contribution) up to December 2020’s wage (January 2021’s contribution) subject to the Third Schedule of the EPF Act 1991,” according to a statement by EPF.

“The new statutory contribution rate for employees applies to those below 60 who are required to make the contribution.”

Don’t Agree With The New Rate?

We understand that some of you (including us) may not be too comfortable with the new reduced rate.

So, is there any way to stop it from happening?

Well, according to The Star’s report, “employees may choose to maintain the current contribution rate of 11 per cent by completing Borang KWSP 17A (Khas 2020) that would be made available on epf.gov.my at a later date.”

The form must be submitted via your employer to EPF and will only come into effect the following month.

It is unclear when the form will be made available online, considering that April is just a few weeks away.

There might be a possibility that your EPF contribution will deducted at a 7 per cent rate in April and you can only reverse it starting in May.