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Financial news: Employers should contribute 20 pct for employee’s EPF?

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Financial news: Employers should contribute 20 pct for employee’s EPF?

Minimum wage, Living Wage and EPF contributions are the three important things for the employees

“Malaysia increased the national minimum wage in May 2022 by 25 percent from 1,200 ringgit (US$273) to 1,500 ringgit (US$341), however, employers with less than five employees were granted an exemption to the hike until January 1, 2023, before being extended again to July 2023.” (Full article here:

“The government is studying a proposal by Bank Negara Malaysia (BNM) to implement a living wage, says human resources minister V Sivakumar. Sivakumar said the BNM 2017 annual report had proposed a living wage of RM2,700 for single persons living in urban areas, RM4,500 for couples without children, and RM6,500 for couples with two children.” Full article here:

Minimum wage means all employers must pay this to their employees. The amount is now RM1,500 per month.Meanwhile Bank Negara Malaysia in a study has proposed a living wage of RM2,700 for single persons living in urban areas. There is a big gap between the minimum and the living wage. I think this will continue to take a lot of study, discussion before any further changes to this gap can be addressed.

Meanwhile, there is now a proposal for employers to contribute 20 percent towards employee’s EPF. Yes, you read correct. 20 percent.

Article in Datuk Seri Anwar Ibrahim said that the proposal by employees for employers to contribute 20% towards the Employees Provident Fund (EPF) will be discussed.

“We have received such a request but have yet to discuss it. It will be brought to the Cabinet for discussion.”

Presently, employees contribute 11% of their monthly salary to the EPF, while employers contribute another 12% or 13% of the person’s salary according to the statutory rate.

Anwar was asked to comment on Union Network International-Malaysia Labour Centre’s 12-point request, which included the raising of employers’ EPF contributions and the retirement age. Article in

20 percent contribution is possible IF all Malaysians are talents the employers need for their globalised business

The world is today a small place because it is not interconnected and today we could make payment to anyone in the world within a short period of time. (depending on which country you send to). We could buy something online from a country we have never been before within minutes. This is why the talent workforce woul be anyone who could do the role and not necessarily someone within a certain country. Thus, employers would want the best talents possible as they navigate the world to expand their business. The question is always are we ready?

If we are not ready and we push the current local employers to pay an amount they could not, this will just cause them to close down thier business. People lose jobs. The global employers who are here today, are they prepared to do so? If they do not have any other choice, they will have to pay until they have another better choice. When that happens, people lose jobs. What about potential new employers intending to set up base in Malaysia? If they have a better choice elsewhere, they will not come. People do not have more jobs to choose from. I hope this explains super briefly.

Upgrade the workforce. The salary will soon follow without the need to compel. Think about it. If we are a talent and our employer does not appreciate us, we can just leave for another job. Happy understanding.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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