As announced during the Budget 2021, the Employees Provident Fund (EPF) employee contribution rate will be reduced from 11% to 9% that will be in effect for an entire year from January 2021 until December 2021. The reduced contribution rate will enable EPF members to enjoy a higher take home pay by 2%.
The new statutory contribution rate of 9% for employees will only apply only to members under 60 years old who are liable for contributions. However, for members aged 60 years old and above, it will remain at the existing rate.
Take note that the employer’s contribution remains unchanged and the new rate reduction will only apply to employee contribution. But, for members who self contribute, the new statutory rate does not apply and it is still subject to a maximum of RM60,000 per year.
However, if you do not wish to reduce your EPF contribution from 11% to 9% you are required to opt-out by following the procedures mentioned below:
Members who prefer to save more for their future retirement fund by maintaining the 11% rate can choose to opt-out by submitting a form to their respective employers.
- Simply download the Borang KWSP 17A (Khas 2021) form that is available on the EPF website.
- Then, the completed form must then be submitted to their respective employers for online registration via i-Akaun (employer) which will begin starting December 14.
- Employers however are advised to keep the completed Borang KWSP 17A (Khas 2021) form for their record.
For more information regarding the new employee’s contribution rate, you can go to EPF website.
Read also Budget 2021: Up To RM6,000 Withdrawal From EPF Account 1 & Other Incentives For The Rakyat
