How to maintain the EPF Employee Contribution rate at 11% in 2021

As announced during the Budget 2021, the Employees Provident Fund (EPF) employee contribution rate will be reduced from 11% to 9% for the period between January to December 2021. If you do not wish to reduce your contribution, members are required to opt-out by submitting a form to their respective employers.

Contribution Rate will be reduced automatically

According to the government, the reduced contribution rate by 2% is expected to free up potential cash flow of up to RM9.3 billion. This will enable members to enjoy a slightly higher take home pay as their salary deduction for EPF is reduced.

To recap, the current reduced contribution rate of 11% to 7% which started on 1st April will end on the 31st December 2020. If you’ve submitted the KWSP 17A (Khas 2020) form previously, you’ll need to submit a new form again for 2021.

The automatic reduction for the contribution rate will only affect members who are aged below 60 years old. Members aged 60 years old and above will remain at the existing rate.

Take note that the employer’s contribution remains unchanged and the rate reduction only applies to employee’s salary deduction for EPF. For members who self contribute, EPF says the new statutory rate does not apply and it is still subject to a maximum of RM60,000 per year.

How to maintain 11% rate for 2021?

If you don’t need the extra cash and would prefer to save more for your future retirement fund, you can choose to opt-out by submitting a form. Here’s what you need to do:

  1. Download the Borang KWSP 17A (Khas 2021) form.
  2. Borang KWSP 17A (Khas 2021) must be filled up by employees who wish to maintain the 11% rate. For convenience, all employees in a company can fill up a single excel form.
  3. Employers are required to enter the employee’s application online via i-Akaun (Employer). Employers are only allowed to key in starting 14th December 2020.
  4. Employers must keep the completed Borang KWSP 17A (Khas 2021) form as record.

For more info, you can check out the official FAQ for the Reduction of Statutory Contribution Rate for Employees. To find out your account status and statement, you can check via the i-Akaun KWSP app or through the official portal.


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Alexander Wong