Working at 60 and Above in Malaysia: What Happens to Your EPF, SOCSO, EIS, SKBBK, PCB and HRDF?
“I’m turning 60 soon. Will my EPF deduction stop? Do I still need to pay SOCSO and income tax?”
These are common questions among employees approaching retirement age. Employers also need to know what to change in payroll when an employee continues working after 60.
The answer is straightforward: some contributions change, but not everything stops. Each scheme has its own rules, and the treatment can differ depending on citizenship, permanent resident status and other eligibility conditions.
Here is a practical guide to what employees and employers should know.
This article mainly covers Malaysian citizens employed in the private sector. Different EPF rates apply to permanent residents and certain foreign employees.
At a Glance: What Changes After 60?
| Item | Employee’s share or deduction | Employer’s responsibility |
EPF / KWSP | Generally 0% compulsory contribution; voluntary contribution is available | Generally 4% for Malaysian citizens |
SOCSO / PERKESO | No employee share for basic Second Category employment injury coverage | Continue contributing under the applicable Second Category schedule |
EIS / SIP | Generally stops upon reaching 60 | Generally stops upon reaching 60 |
SKBBK / LINDUNG 24 Jam | Employee-funded contribution where participation applies | Check participation status and remit the applicable contribution |
PCB / MTD | Continues if required by the tax calculation | Continue calculating and deducting PCB where applicable |
HRDF / HRD Corp levy | No deduction from the employee’s salary | Continue assessing the levy for eligible employees |
The table is a general guide. Payroll teams should use the relevant contribution schedules and confirm the correct month for age-related changes.
1. EPF: Does Contribution Stop When You Turn 60?
For Malaysian citizens aged 60 and above, the standard statutory EPF contribution is generally:
- Employee: 0%
- Employer: 4%
In other words, your normal compulsory employee deduction generally stops, but your employer’s contribution continues while you remain within the applicable coverage.
KWSP’s contribution rules provide for a maximum contribution age of 75.
Can you choose to continue contributing?
Yes, you can. A 0% statutory employee rate does not mean you are prohibited from saving through EPF.
If you prefer to continue contributing from your salary, you can elect to contribute above the statutory rate through i-Topup, previously known as Voluntary Excess.
Inform HR and complete the prescribed election process. KWSP provides the KWSP 17A/18A (AHL) form and the applicable i-Akaun procedures for registration or cancellation. HR should obtain the proper election before making payroll deductions.
Alternatively, eligible Malaysian citizens and permanent residents below 75 can contribute directly through i-Simpan. The current combined annual limit for the specified voluntary contribution schemes is RM100,000.
Your decision to contribute voluntarily does not automatically increase your employer’s statutory share. The employer can separately choose to contribute more.
What if you have already withdrawn your EPF savings?
Withdrawing your retirement savings does not automatically end your employer’s contribution obligation if you continue working within the applicable coverage.
Are permanent residents treated the same?
No. Do not apply the Malaysian citizen rate to every employee aged 60 and above.
Permanent residents and qualifying non-Malaysian members registered before 1 August 1998 have different rates. Other covered non-Malaysian employees generally fall under the 2% employee and 2% employer arrangement introduced from October 2025.
HR should confirm the employee’s status before updating payroll. www.kwsp.gov.my
2. SOCSO: Does PERKESO Coverage Continue?
Yes. Reaching 60 does not mean that SOCSO protection ends.
Eligible employees generally move to Second Category contributions, which provide employment injury protection. The employer pays the contribution according to the applicable schedule, based on the 1.25% rate.
There is no employee contribution for this basic Second Category employment injury coverage.
This is different from the First Category arrangement, which includes invalidity coverage.
Why might there still be a PERKESO-related deduction?
This is where employees sometimes get confused.
Although there is no employee share for the basic Second Category contribution, SKBBK is a separate employee-funded component where participation applies.
Therefore, do not assume that every PERKESO-related deduction must become zero after 60. Check the breakdown on your payslip with HR.
PERKESO’s contribution ceiling is RM6,000 per month. Payroll must follow the applicable wage band and contribution schedule rather than simply multiply the employee’s full salary by a percentage. www.perkeso.gov.my
3. EIS: Do Contributions Continue After 60?
EIS, also known as SIP, generally stops upon reaching 60. HR should confirm the correct transition month when updating payroll.
EIS has different eligibility rules from SOCSO. Continuing SOCSO employment injury coverage does not mean EIS contributions must also continue.
There is also an earlier exclusion for employees aged 57 and above who had no contributions payable before reaching that age. This is particularly relevant when hiring someone who is entering covered employment later in life. www.perkeso.gov.my For employees, the practical point is to check EIS separately instead of treating it as part of one combined “SOCSO deduction”.
4. SKBBK: Can Employees Above 60 Still Participate?
Yes. Turning 60 does not automatically end SKBBK participation.
SKBBK, commonly known as LINDUNG 24 Jam, provides protection for qualifying accidents outside employment, subject to the scheme’s conditions and exclusions.
PERKESO’s circular includes employees who have reached 60 and are still working under the Second Category arrangement covering employment injury and SKBBK.
Who pays for SKBBK?
The contribution is fully borne by the employee, with the employer remitting it through the applicable process.
PERKESO currently publishes a first-phase rate of 0.75%, with later phased rates. The actual contribution amount should follow the relevant schedule.
Is participation compulsory?
PERKESO’s current guidance states that participation is voluntary for local employees, while it remains mandatory for foreign employees, subject to applicable coverage. perkeso.gov.my For local employees, HR should check the recorded participation status and any effective changes. Do not automatically stop or start deductions simply because the employee has turned 60.
5. PCB: Is Your Salary Tax-Free After 60?
No. Being 60 or retired does not automatically make your salary tax-free.
If you continue working or join another company after retirement, your employment income remains subject to the applicable tax rules.
HASiL identifies employment income as one of the income categories that can remain taxable for retirees. The possible exemption of a pension is a separate issue from the tax treatment of salary. www.hasil.gov.my
Your PCB calculation will depend on your remuneration, tax residence status, relevant deductions and other applicable information.
Some employees may have no PCB payable after the calculation. However, HR should not switch off PCB just because an employee has reached 60.
What if you retire and start a new job?
If you worked for another employer earlier in the same calendar year, provide your new employer with the relevant previous employment information through TP3.
For example, if you retire from one company in June 2026 and join another in July 2026, your earlier 2026 employment information remains relevant. Do not assume your annual tax calculation starts from zero when you change employers.
6. HRDF: Does the Employer Still Pay Levy?
There is no automatic HRD Corp levy exemption simply because an employee turns 60.
HRD Corp’s published employee definition focuses on Malaysian citizenship and qualifying employment under a contract of service. It does not establish a general age-60 exclusion.
An eligible employee who continues working should therefore not be removed from the levy calculation solely because of age. supportcentre.hrdcorp.gov.my
Is HRDF deducted from your salary?
No. The HRD Corp levy is paid by the employer.
The published rates are generally:
- 1% for employers registered under the mandatory category.
- 0.5% for employers registered under the optional category.
The employer must apply its correct registration category and levy wage definition. hrdcorp.gov.my
What Should HR Do Before an Employee Turns 60?
A practical approach is to start the review about three months before the employee’s 60th birthday. This is an internal planning recommendation, not a statutory notice period.
HR should:
- Review the employment arrangement. Confirm the applicable retirement terms and discuss whether the employee will retire, continue working or be re-employed.
- Document the agreed terms. Clarify salary, benefits, leave, working hours and notice requirements where arrangements change.
- Check insurance coverage. Confirm medical and other insurance age limits with the insurer.
- Review each payroll item separately. Check EPF, SOCSO, EIS, SKBBK, PCB and HRD levy treatment.
- Confirm the effective payroll month. Avoid applying every change using one assumed date.
- Explain payslip changes. Let the employee know which deductions will change and whether voluntary EPF contribution is available.
If employment is ending, HR should separately assess final payment, retirement benefits and applicable tax notification or clearance requirements.
Common Mistakes to Avoid
Assuming all contributions stop at 60
Different schemes have different rules. An employee may stop contributing to EIS while the employer continues EPF and SOCSO contributions.
Continuing employee EPF deductions without checking the election
For Malaysian citizens moving to the 0% statutory employee rate, HR should confirm and process any voluntary contribution election.
Applying Malaysian citizen EPF rates to permanent residents
Citizenship and PR status matter. Age alone is not enough to select the correct rate.
Overlooking SKBBK
Second Category SOCSO treatment does not automatically mean that no employee-funded SKBBK deduction applies.
Treating salary as an exempt pension
Continued employment income must be assessed separately.
Removing older employees from HRD levy calculations
An employee’s 60th birthday alone does not establish an exemption.
Check Your Payslip and Ask Early
Working beyond 60 can bring changes to your take-home pay and retirement savings. Before the first affected payroll, ask HR to explain the changes and let them know if you wish to continue contributing voluntarily to EPF.
For employers, a proper review helps prevent incorrect deductions and unnecessary adjustments later.
CentralHR supports Malaysian businesses with payroll processing, statutory administration and age-related payroll changes. Explore our payroll outsourcing services or contact our team to discuss your requirements.
Reviewed on 30 October 2026. This article provides general guidance for employment under a contract of service. Special categories, exemptions and contribution transition periods should be checked against the relevant agency’s current requirements.
