EPF launches facility to deduct zakat from Simpanan Shariah dividends

KUALA LUMPUR, 12 OCTOBER 2026 —

The Employees Provident Fund (EPF) has launched a new facility allowing Muslim members to have their annual zakat payments deducted directly from their Simpanan Shariah dividends, a move designed to simplify the fulfillment of religious obligations on retirement savings.

This development follows a specific resolution by the 125th National Council for Islamic Religious Affairs Malaysia (MKI) Muzakarah Committee Meeting, which determined that Simpanan Shariah savings are subject to annual business zakat obligations. By institutionalizing this deduction, the EPF addresses the complexity previously faced by members who had to independently calculate and arrange payments for their zakat liabilities.

The initiative reflects the fund’s broader commitment to strengthening the Simpanan Shariah account through solutions supported by sound Shariah governance, ensuring that religious compliance is integrated seamlessly into the financial lifecycle of the savings.

Under the voluntary facility, the mechanics of the deduction are precise and standardized. Zakat will be calculated collectively using the adjusted working capital method at a rate of 2.577% for each financial year ending December 31. This total obligation is then apportioned among Muslim members on a pro rata basis. Individual deductions are determined using a Member Zakat Rate, which is based on the annual Simpanan Shariah dividend distribution.

Once the annual dividends are declared, the EPF will deduct the calculated amount and remit the payments to the relevant state zakat authorities, with the specific authority determined by the state where the member works.

EPF Chief Executive Officer Ahmad Zulqarnain Onn emphasized that the facility provides a more convenient pathway for members to fulfill their religious duties without the burden of manual calculation or payment arrangement. “For members who choose to participate, EPF takes care of the assessment and payment process under the facility, providing greater clarity and convenience while allowing members to remain focused on building their savings for retirement,” Onn said.

He noted that the initiative underscores the fund’s dedication to enhancing the Simpanan Shariah product through robust governance frameworks that align with Islamic principles.

The facility is strictly voluntary, and the EPF clarified that Muslim members who choose not to participate may continue to fulfill their zakat obligations individually through existing channels. Non-Muslim members are not subject to zakat and are therefore excluded from this specific facility. This distinction ensures that the system remains compliant with Islamic jurisprudence while respecting the religious diversity of the fund’s membership base.

The optionality of the facility allows members to retain control over their financial and religious practices, with the EPF serving as a facilitator rather than a mandatory enforcer for those who opt in.

A key aspect of the new arrangement is the treatment of savings already eligible for withdrawal. The EPF stated that savings in accounts such as Akaun Fleksibel, which are eligible for withdrawal, would not require separate zakat payments by members participating in the facility. These amounts are covered under the collective zakat assessment, preventing double taxation or redundant payments.

This integration simplifies the compliance landscape for members who have diversified their savings across different EPF accounts, ensuring that their zakat obligations are met comprehensively through a single, automated process.

Members interested in opting into the Simpanan Shariah Business Zakat facility can do so through several accessible channels. The EPF has enabled enrollment via the KWSP i-Akaun (Member) digital platform, self-service terminals located at various points, and physical EPF offices nationwide. This multi-channel approach ensures that members of all technological proficiencies can access the facility.

Further information regarding the facility, including detailed guidelines and FAQs, is available on the EPF website, providing transparency and clarity to those considering participation.

The launch of this facility represents a significant step in the digitalization and streamlining of Islamic financial services in Malaysia. By automating the zakat deduction process, the EPF reduces the administrative burden on millions of Muslim members, potentially increasing compliance rates and ensuring that zakat funds are consistently channeled to state authorities.

The initiative also highlights the evolving role of public financial institutions in accommodating religious requirements through technological and procedural innovation, setting a precedent for how other financial products may handle similar compliance obligations in the future.