Do You Pay Zakat on EPF Savings? What the Fatwas Say

Under the position of Malaysia's National Fatwa Committee, zakat on EPF savings becomes due when the money is withdrawn, not while it sits in your account. The rate is 2.5% of the amount withdrawn, and contributors are encouraged to pay it straight away if the amount meets the nisab, without waiting a year.

However, zakat is administered state by state, and state fatwa positions are not all the same. The ruling that applies to you is your own state's.

Here's what the national position says, where states differ, and how the maths works.

Why EPF isn't zakatable every year

Zakat on savings normally requires two conditions: the wealth reaches the nisab and a full lunar year (haul) passes while you fully own it. EPF money is yours, but you cannot freely withdraw it before the ages and purposes the EPF allows. Because of that restriction, the national position treats EPF money as zakatable when it comes into the contributor's hands, although state authorities may apply different positions.

The National Fatwa Committee first ruled on EPF zakat in November 1982. At its 74th meeting in July 2006, it amended that ruling to say contributors are encouraged to pay zakat immediately on receiving or withdrawing EPF money if it meets the nisab, without waiting for a year to pass. JAKIM's fatwa portal records this decision, and the Selangor Fatwa Committee reached the same position in 2007.

How to calculate it

The basic formula used by state zakat authorities is simple:

Amount withdrawn × 2.5% = zakat payable

Examples:

• You withdraw RM100,000 at age 55: RM100,000 × 2.5% = RM2,500.
• Your withdrawal includes RM10,000 of dividends on RM100,000 of savings: zakat is calculated on the full RM110,000, which is RM2,750.

On dividends, Lembaga Zakat Selangor's published fatwa says zakat is calculated on the whole amount (principal, dividend and bonus) and that you do not need to separate out any non-Shariah-compliant portion of the dividend. The reason given is that contributions are compulsory, so savers should not bear the burden of a government decision outside their control.

What if the withdrawal is below the nisab?

Smaller withdrawals, such as those from Akaun Fleksibel, may fall below the nisab on their own (the 2026 Federal Territories nisab is RM33,996). Some zakat guidance says a below-nisab withdrawal should be combined with your other zakatable savings or income to test against the nisab, rather than ignored, but practice varies. Check how your own state treats partial withdrawals.

Where the states differ

• Penang (Zakat Pulau Pinang) sets out two approaches. One treats EPF as fully owned, so the employee's own contributions are zakatable every year once they meet the nisab and haul. The other applies zakat at 2.5% only when money is withdrawn.
• Pahang (Pusat Kutipan Zakat Pahang) says zakat on a withdrawal is due immediately. Money that remains a year later is then treated as ordinary savings and becomes subject to zakat on savings if it still meets the conditions.
• Kedah (LZNK) says EPF savings that meet the nisab and haul, as shown on the annual statement, are zakatable, with payment made when the money is received.

These positions lead to different results for some people, particularly on whether zakat is due every year or only on withdrawal. Check your own state zakat authority's ruling before you pay.

EPF paid out on death

Pusat Kutipan Zakat Pahang states that EPF money withdrawn because of a member's death is not subject to this zakat, because it becomes part of the estate (harta pusaka). How that money is then shared is a separate question; for Muslims, the EPF nominee acts as an administrator who distributes it by faraid. See faraid, wasiat or hibah.

Practical tips

1. Pay soon after you withdraw. The fatwa encourages it, and you avoid spending the money before the zakat is set aside.
2. Keep the receipt. Zakat on EPF paid to an official authority qualifies for the income tax rebate under Section 6A(3), limited to your tax charged for that year. The rules are explained in how to calculate zakat on your salary.
3. Plan for it in retirement. A 2.5% zakat on a large withdrawal is a real sum. Build it into your plans; the EPF Calculator estimates what you might withdraw, and the Zakat Calculator checks it against the nisab.

For the principles behind zakat, see Zakat: The Pillar of Purifying Wealth.

This guide summarises published fatwas and zakat authority guidance as of September 2026. It is not a religious ruling; your state zakat authority's position governs.

References

• JAKIM e-SMAF, Bayaran Zakat Kumpulan Wang Simpanan Pekerja (KWSP) (National Fatwa Committee decision, 74th meeting, 2006)
• Lembaga Zakat Selangor, Zakat KWSP
• Pejabat Mufti Negeri Selangor, e-Musykil answer on EPF zakat
• Zakat Pulau Pinang (MAINPP), Zakat KWSP
• Pusat Kutipan Zakat Pahang, Zakat KWSP
• Lembaga Zakat Negeri Kedah, Zakat KWSP